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On November 16, 2015, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) reached a Memorandum of Understanding (MOU) in which the two agencies agreed to engage in greater coordination and collaboration on consumer protection issues, with greater respect for each agency’s jurisdiction. The MOU comes at a time when both agencies are seeking to position themselves as protectors of consumers in the digital economy.
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Modern mobile devicesOn March 31st, a federal judge in California District Court issued an Order denying AT&T’s motion to dismiss the Federal Trade Commission’s (FTC’s) lawsuit against the company concerning its advertising and business practices for its mobile wireless data plans.  This case presented an increasingly common question concerning the dividing line between jurisdiction of the FTC and the Federal Communications Commission (“FCC”) over activities of telecommunications companies.  With the order, the FTC’s case against AT&T will now move forward on the merits. 
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 In a move that appears aimed to maximize options for new Chairman Tom Wheeler when he assumes office, the FCC turned its attention again to its rules to address unauthorized charges on telephone bills, known colloquially as "cramming."  The FCC is asking parties to refresh the record in its docket considering rules for landline and mobile carriers to address cramming.  Parties are asked to address recent filings by state commissions seeking additional rules, particularly with respect to the extent to which cramming is a problem on wireless bills.  

The FCC has an inconsistent history in addressing cramming — it still does not have any required verification rules for placing charges on telephone bills, for example.  Yet the FCC has taken occasional enforcement actions, proposing significant fines or settling cases for significant amounts.  This public notice provides an opportunity for the FCC to clarify, for carriers and third-party providers alike, the extent of a service provider’s duties with respect to charges billed on telephone invoices.


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Days before tomorrow’s Federal Trade Commission (FTC) Workshop on Mobile Disclosures, the FCC weighed in with a pair of releases on privacy and security issues raised by mobile devices.  In the first item released on Friday, the FCC is seeking to refresh its record regarding the privacy and data security practices of mobile wireless service providers in light of recent disclosures concerning software developed by CarrierIQ.  The FCC’s Public Notice seeks to update the record in a five-year-old rulemaking proceeding addressing carrier obligations in connection with devices that function on their networks.  In the second item released, the FCC released its staff report on location-based services (LBS).  Consistent with the approach of the Administration and the FTC (as was discussed at our 4th Annual Privacy Seminar), the FCC focused on ways carriers can protect information from misuse or mishandling, transparency in carrier disclosures and maximizing consumer choice in the use of LBS.

Collectively, the releases demonstrate that the FCC will continue to work cooperatively with the FTC and the Administration (including the NTIA) to address privacy issues in the mobile market. The FCC appears to believe it has sufficient statutory authority to act on mobile and device privacy, with its emphasis being on its jurisdiction over carrier practices in connection with both services and devices.

Josh Guyan contributed to this post.
 


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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.   


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Last month, the FTC issued an “Advance Notice of Proposed Rulemaking” seeking comments on whether and how to strengthen the Caller ID provisions of its Telemarketing Sales Rule. The Rule presently requires telemarketers to provide Caller ID information to allow consumers to screen out unwanted calls. The FTC seeks comments on how to make Caller ID more useful to consumers and combat technologies that hide telemarketers’ identities. Currently, the Caller ID regulations give telemarketers flexibility in determining what telephone numbers to transmit, and in determining whether the name of the telemarketer, or the name of the seller or charity, is displayed on Caller ID services.


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Two developments last month portend a more difficult time for entities "spoofing" caller ID information.  On December 22, President Obama signed into law the Truth in Caller ID Act of 2009 [sic], which makes it unlawful for a person to transmit misleading or inaccurate caller ID information with an intent to defraud.  In addition, the FTC is seeking comment on rule changes to strengthen the caller ID provisions of its Telemarketing Sales Rule (TSR). 

Descriptions of both developments are provided below.


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This entry was drafted by Telecom Partner John Heitmann

Yesterday, the FTC testified before a Senate Subcommittee and recommended that proposed data security legislation introduced by Senators Pryor (D., AR) and Rockefeller (D., WV) (The Data Security and Breach Notification Act of 2010, S.3742) be modified so that its requirements and the FTC’s enforcement authority thereunder be extended to telecommunications common carriers.  

The FTC’s testimony – available here – is the latest in a series of FTC actions signaling the agency’s concern regarding the amount of personal information telecom common carriers handle and the FTC’s ability – or inability – to take enforcement action against such carriers.


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Late last week, the FCC sent inquiry letters to a number of prepaid calling card providers concerning their marketing practices.  This action represents the first significant entry by the FCC into prepaid calling card marketing practices.  Prior to this action, prepaid card enforcement activities have been conducted in private litigation brought by a large prepaid carrier, before a handful of state attorneys general and, in the case of non-carrier distributors, before the Federal Trade Commission.  However, the FTC is barred from taking action against common carriers.  The FCC’s action suggests that the Commission is attempting to close the gap in compliance within the prepaid industry by acting directly against carriers that offer prepaid cards.

Details about the FCC requests are available after the jump.


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