With speculation running rampant that Chairman Pai intends to bring a remand order from ACA International v. FCC in January 2019, the FCC took a related step to reduce misdirected calls. At the December Open Meeting, the FCC approved a Second Report and Order (“R&O”) to create a single, nationwide database for reporting number reassignments that will allow callers to verify whether a phone number was permanently disconnected before calling the number. The item is meant to reduce “wrong number” calls to mobile phones, i.e., where a caller has a legitimate reason for trying to reach a consumer but doesn’t realize that the number they have has been reassigned to someone else. The new rule would help eliminate a scenario where the new holder of the number receives an unwanted call and the prior holder never receives the call intended for them. The R&O is part of a broader effort by the FCC to address and stem the volume of unwanted phone calls in the United States.
The FCC plans to take aim again at unwanted texts and robocalls at its next meeting scheduled for December 12, 2018. Unwanted robocalls and texting consistently top the list of complaints received by the FCC and that has driven much regulatory attention by the agency in recent years. Specifically, at its December meeting, the FCC intends to classify most text messaging as an “information service” to preserve service providers’ ability to block robotexts and other unsolicited messages. The FCC’s anticipated action comes after years of debate regarding the proper regulatory treatment for text messaging and could have far-reaching impacts by exempting such services from the standard “common carrier” rules applicable to most legacy telecommunications. The FCC also plans to order the creation of a reassigned numbers database that would allow robocallers and others to check in advance whether a particular number still belongs to a consumer that has agreed to receive prerecorded calls. Rounding out the major actions, the FCC released draft items that would: (1) set the stage for the next Spectrum Frontiers auction of high-band spectrum; (2) offer additional funding to rural broadband recipients of Connect America Fund money if they increase high-speed offerings; and (3) issue the FCC’s first consolidated Communications Marketplace Report, providing a comprehensive look at industry competition. The December items cover many priority Pai FCC topics and would affect service providers of all sizes while tackling longstanding consumer protection and broadband deployment issues. You will find more details on the significant December items after the jump:
In a move affecting nearly every type of dispute brought to the agency, the FCC adopted a Report and Order (“Order”) at its July meeting establishing a streamlined set of formal complaint rules. The new rules cover complaints against common carriers, pole attachment complaints, and complaints involving accessibility for people with disabilities. The revised procedures impose a uniform deadline for answering complaints, eliminate a number of procedural requirements, expand the discovery process, and establish a “shot clock” for FCC decisions. The reforms aim to lower the overall burden on complainants, potentially opening the door to the resolution of more disputes with the FCC instead of in court or elsewhere.
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.
E-Rate fraud is back in the spotlight following the indictment of a Dallas charter school CEO and the owner of a contracting company for an alleged kickback scheme resulting in over $300,000 in illegal subsidies. Federal prosecutors stated that the pair violated the E-Rate program’s competitive bidding requirements and submitted fraudulent invoices to the Federal Communications Commission (“FCC”). The indictment comes on the heels of major FCC settlements and enforcement actions against educational institutions and service providers for alleged E-Rate violations. FCC Chairman Pai has repeatedly criticized the administration of the E-Rate program and the indictment may spur further calls for action to combat fraud in the program.
At its last open meeting in 2017, the five FCC Commissioners unanimously voted to adopt a Notice of Proposed Rulemaking (NPRM) and Order regarding the Commission’s Rural Health Care (RHC) Program, a 20-year old initiative aimed at improving rural health care provider access to first telecommunications services and later an array of communications services, including Internet access, dark fiber, and business data services. This item is part of FCC Chairman Ajit Pai’s overall initiative to close the “digital divide,” and proposes to increase the $400 million spending cap for the first time since 1997. The NPRM also proposes to change how the FCC handles demand beyond the cap, from general proration to prioritization based on rurality or remoteness. As such, all interested stakeholders should carefully monitor and consider participating in the rulemaking process. Comments will be due 30 days after publication of the item in the Federal Register (which usually takes a few weeks) and reply comments will be due 60 days after publication.
Stressing the importance of receiving truthful and accurate information, the Federal Communications Commission (“FCC”) reached a $1.7 million settlement with inmate calling services provider Securus Technologies, Inc. and related entities (“Securus”) to resolve allegations that Securus submitted misleading information to the FCC in support of a pending transfer of control. Although the settlement cleared the way for the transfer’s approval, the FCC held up the deal for months while it investigated statements made by Securus representatives. As a result, the FCC’s action supports the adage that “haste often makes waste” in telecommunications-related deals and that submitting misleading information to the FCC can come with significant consequences.
Continuing its assault on unlicensed broadcast operations, the Federal Communications Commission (“FCC”) issued a unanimous Notice of Apparent Liability for Forfeiture (“NAL”) at its September meeting proposing the statutory maximum fine of $144,344 against a pirate radio operator as well as the owners of the property housing the unlicensed station. The action represents the first time the FCC has found landowners apparently liable for pirate radio operations on their property and the first Commission-level NAL issued against a pirate radio operation. Imposing penalties on property owners that support pirate operations has been a longstanding goal for Commissioner O’Rielly, and Chairman Pai signaled that cracking down on pirate stations remains a key enforcement priority for the FCC.
As part of its August 2017 Open Meeting, the Federal Communications Commission (“FCC”) issued a Notice of Apparent Liability for Forfeiture (“NAL”) proposing over $82 million in fines against Philip Roesel and the insurance companies he operated for allegedly violating the Truth in Caller Act by altering the caller ID information (a/k/a “spoofing”) of more than 21 million robocalls in order to generate sales leads and avoid detection by authorities. The FCC separately issued a Citation against Mr. Roesel and his companies for allegedly violating the Telephone Consumer Protection Act by transmitting the robocalls to emergency, wireless, and residential phone lines without consent. The NAL and Citation represent just the latest salvos in the FCC’s continuing assault on robocalling in general and deceptive uses of spoofing in particular. With $200 million in proposed fines in only two cases, it is clear that such issues will remain an enforcement priority under Chairman Pai.
In the first action of its kind, on June 7, 2017, the Federal Communications Commission (“FCC”) issued an amendment to a Notice of Apparent Liability for Forfeiture and Order (“NAL”), for alleged violations of the rules governing the Universal Service Rural Health Care Program (“RHCP”). The FCC found that the fine proposed in the initial NAL was not based on the correct violations and included violations beyond the agency’s one-year statute of limitations. However, by changing the type of conduct found to violate the RHCP rules and increasing the proposed fine, the FCC’s amendment presents its own statute of limitations concerns and raises questions about the use of amendments in enforcement actions. The amendment also is the first foray by Chairman Pai into Universal Service enforcement matters since he assumed the chairmanship in January of this year.