On January 20, 2017, Politico Pro reported that President Trump selected Republican Federal Communications Commission (FCC) Commissioner Ajit Pai to serve as the next permanent FCC Chairman.  According to the report, Commissioner Pai will not need to go through Senate confirmation in order to become Chairman.  Instead, he will simply need the Senate to reappoint

A May 2013 California Public Utilities Commission decision requires most companies holding a California CPCN or wireless registration (“WIR”) to submit a $25,000 continuous performance bond. The decision also revises application/registration requirements, increases filing fees and sets a minimum annual User Fee.   In addition, the CPUC will convene a workshop to consider whether to require VoIP providers to register with the Commission.

The primary impact of this decision for most providers in California will be the new performance bond requirement.  The CPUC’s bond requirement takes effect on August 21, 2013.  Thereafter, entities failing to obtain a performance bond may be subject to revocation proceedings.

Continue Reading California Requires Most Carriers to Post a Performance Bond

After six NALs and an Enforcement Advisory, the FCC is not finished with prepaid calling card marketing practices. On February 7th, the Enforcement Bureau issued a Notice of Apparent Liability against a prepaid card provider for failing to respond to the Bureau’s investigation.  This action serves both as a reminder to carriers of the importance of responding fully to FCC investigations and as a warning to prepaid card carriers that, despite the previous actions, the FCC’s investigations are likely to continue.  Any provider that receives or has received an inquiry from the FCC Enforcement Bureau should carefully consider its response. 

Continue Reading FCC Prepaid Card Investigations Continue; Bureau Proposes $25,000 Fine for Non-Response

Back in 2007, in response to the pretexting controversy, the FCC strengthened its CPNI rules to require telecommunications carriers to authenticate a subscriber’s identity before providing call detail information.  The FCC rules required carriers to authenticate customers with a password or some other information that does not rely upon "readily available biographical information" before

In 2011, the FCC was extremely active in the prepaid calling card area, proposing $25 million in fines and investigating several other prepaid card providers.  While the FCC has exclusive jurisdiction over prepaid cards when provided by common carriers, the Federal Trade Commission also has jurisdiction over non-carrier marketers of prepaid calling cards.  This case is a reminder of the shared jurisdiction between the agencies.   

Continue Reading Prepaid Card Provider Settles Failure to Disclose Action for $2.3 Million

Yesterday, the FCC proposed another $5 million fine for insufficient disclosures on prepaid calling cards.  This action is best understood as an echo to the FCC’s action in September, when it proposed four similar $5 million fines against other prepaid calling card providers.  In fact, I believe that this NAL has been circulating at the FCC since shortly before the other four NALs were released.

2011 has been highlighted by an active FCC using Section 201(b) of the Act to engage in consumer-focused enforcement.  Although the FCC’s authority to use 201(b) in this way is in doubt, the lesson for carriers is clear, especially in the prepaid market.  Carriers should clearly and conspicuously disclose all material terms and conditions of their services.  Failure to do so risks claims of deceptive marketing or cramming. 

Continue Reading FCC Proposes Another $5 Million Prepaid Card Fine

Late yesterday, the FCC released its latest NPRM on high cost USF and ICC reform (see our 2/8 post).  The 289 page item, available here,  sets forth staggered comment dates triggered by federal register publication.  The first — 30 days after Federal Register publication — is for comments on intercarrier compensation for VoIP traffic, rules to address

As expected, late yesterday, the FCC announced that it would again attempt to tackle its "holy grail" of regulatory action:  reforming carrier-to-carrier compensation mechanisms and the high-cost program of the Universal Service Fund.  The FCC has placed a Notice of Proposed Rulemaking addressing both intercarrier compensation and USF reform on its agenda for February 8.  The combined NPRM furthers the National Broadband Plan’s promise to refocus FCC policy to supporting broadband networks.

These two topics are at the core of what we cover in this blog.  The complicated mix of carrier-to-carrier compensation mechanisms, which make how a call is classified critical to determining its cost, has engendered significant litigation involving such issues as VoIP, prepaid calling cards, access charges, reciprocal compensation and many others.  Meanwhile, the funding and administration of the $7 billion per year Universal Service Fund is a constant source of audit issues, enforcement actions and rulemaking proposals.

Continue Reading Intercarrier Compensation, USF High Cost Fund Reform Top FCC Agenda

Long time readers of the blog will know that we’ve been following AT&T’s attempts to collect access charges for local calls delivered via intermediaries to prepaid card providers.  The background is available here: previous Telecom Law Monitor entry.  The AT&T litigation is proceeding, albeit slowly.

In June, the U.S. District Court overseeing the first

In a recent USF appeal, the FCC agreed with a prepaid card "platform provider" that each of its customers, not the platform provider, is the "carrier" for Universal Service purposes.  The FCC ruled, however, that the platform provider may owe USF on transport services it provided, unless it properly qualified the customers as resellers under the USF rules.  The case, Network Enhanced Telecom LLP, is discussed after the jump.

Prepaid card providers should take note.  This decision carries implications for all "carrier" responsibilities, including 214 authorizations, tariffing, CPNI obligations and responsibility for marketing claims, not just for USF contributions.

Wholesale carriers and resellers also should take note.  This represents the first time since Global Crossing that the FCC has addressed the obligations of wholesale carriers to qualify their resellers — a persistent point of contention in USF auditing and reporting. 

Continue Reading FCC Clarifies “Carrier” Definition In Prepaid Context