Tuesday, June 30, 2015

Chairman Wheeler Discusses Proposed DE Policies and Incentive Auction

Last week, FCC Chairman Tom Wheeler posted a blog discussing potential changes to spectrum auction competitive bidding policies and the Incentive Auction rules.  The Chairman has circulated his proposals to the other Commissioners and anticipates that the Commission will vote on several items concerning these proceedings during the July Open Meeting on July 16th.  The Sunshine period will begin a week before the meeting, on July 9th. 

Competitive Bidding Policies/DE Reform 
According to the fact sheet, the reforms proposed by the Chairman aim to ensure that bidding credits are given to their intended recipients and do not allow large corporations to “game the system”.  Most notably, these reforms include establishing a new rural business bidding credit; establishing the first-ever bidding credit cap; prohibiting joint bidding arrangements; and eliminating the rule that requires small businesses to offer facilities-based wireless service before qualifying for bidding credits. 

Cap on Bidding Credits: The Chairman proposes capping the total value of bidding credits a small business or rural provider is eligible to receive.  The cap will vary on a service-by-service basis.  For the incentive auction, there will be a $150 million cap for small businesses and a $10 million cap for rural providers.  The Chairman also proposes a $10 million ceiling on the amount of bidding credits that any entity can use in the smallest markets.

Stronger Attribution Rules: The Chairman proposes strengthening the attribution rules by retaining the 5-year unjust enrichment period and the graduated repayment schedule.  The Chairman also proposes limiting the amount of spectrum that a DE can lease to any of its non-controlling disclosable interest holders (i.e. investors) during the 5-year period.

Joint Bidding Arrangements: The Chairman proposes to prohibit strategic joint bidding arrangements, but will permit operational arrangements (e.g. roaming, leasing, etc.) if they are disclosed.  The Chairman also intends to permit DEs to participate in consortiums with other DEs; to permit non-nationwide providers to participate in joint ventures with other non-nationwide providers; and to generally prohibit multiple applications by one party or by parties with common controlling interests.

Creation of Rural Credit: The Chairman proposes to offer a rural bidding credit of 15%.  This credit will be available to rural carriers with less than 250,000 subscribers in primarily rural areas. 

Modernization of Eligibility Rules: The Chairman proposes to reform the eligibility requirements for designated entities by eliminating the rule that requires small businesses to provide facilities-based service before qualifying for bidding credits, and by eliminating the assumption that a lease of more than 25% capacity to a large business requires revenue attribution.  Instead, the Chairman proposes to evaluate eligibility on a license-by-licenses basis. 

Small Business Definition: The Chairman proposes to increase the revenue threshold for “small” businesses to account for inflation.  The proposed thresholds are as following: $4 million (35% credit), $20 million (25% credit), and $55 million (15% credit).

Incentive Auction Rules 
During the July Meeting, the FCC will also vote on a separate item that preserves the current reserve size of 30 megahertz.  According to the Chairman, this reserve size “balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.”

The Commission will also be considering a Public Notice establishing the bidding procedures for the Incentive Auction.  The update by the Chairman follows an earlier blog, in which he discussed the progress being made on the Incentive Auction.

Please contact us if you have any questions.

FCC Releases Tentative Agenda for July Open Meeting

The Tentative Agenda for the July 16th Open Meeting has been released.  The Meeting is scheduled to begin at 10:30 am. 

Incentive Auction Procedures: The Commission will consider a Public Notice that establishes the final procedures for the Incentive Auction, which is scheduled to commence in the first quarter of 2015.  This Public Notice establishes procedures for setting an initial spectrum clearing target and discusses the mechanisms for becoming qualified for participation in the incentive auction. 

Mobile Spectrum Holdings: The Commission will consider an Order on Reconsideration addressing petitions for reconsideration of the Mobile Spectrum Holdings Report and Order. 

Competitive Bidding: The Commission will consider a Report and Order, Order on Reconsideration, Third Order on Reconsideration, and a Third Report and Order that modifies the Commission’s competitive bidding rules.  The rules aim to prevent unjust enrichment and potential gaming of the bidding credit program.

The meeting may be streamed at fcc.gov/live. 

Please don't hesitate to contact us if you have any questions. 

FCC Announces Update to Text-to-9-1-1 Registry

Last week, the FCC released a Public Notice announcing that it is updating its Public Safety Answering Point (PSAP) Text-to-911 Readiness and Certification Registry (Text-to-911 Registry), which provides a list of the PSAPs ready to receive text-to-911 messages and the deadline for compliance.  The Public Notice serves as a notice to CMRS providers and other providers of interconnected text messaging services that they must begin routing 911 text messages to the requesting newly-listed PSAPs within six months of this notice date (as will be indicated in the Text-to-911 Registry).  The FCC also reminds providers to review the text readiness of PSAPs in their areas and to help coordinate implementation of the text-to-911 service. 

Please contact us if you have any questions.

FCC Seeks Comment on Small Business Exemption to Enhanced Transparency Rule

The FCC has released a Public Notice seeking comment on the small business exemption to recently adopted (but not yet effective) enhanced transparency rules under the 2015 Open Internet Order.  In the 2015 Open Internet Order, the Commission temporarily exempted providers with 100,000 or fewer broadband subscribers (based on the most recent Form 477) from compliance with the enhanced transparency requirements.  The Public Notice clarifies that the exemption from the enhanced transparency requirements currently applies to providers with 100,000 or fewer broadband connections, not subscribers (in an effort to be consistent with the Form 477 metrics).

The Commission seeks comment on whether the enhancements to the transparency rule impose significant compliance burdens that justify making permanent the small business exemption.  The Commission highlights the fact that several of the originally proposed enhancements were not adopted and therefore the need for an exemption may no longer be justified.  More specifically, the FCC seeks comment on the extent of the burden of the enhanced transparency disclosures to smaller providers, the disproportionate effects of adopting or not adopting an exemption, and whether an exemption should be temporary or long-term.  The FCC also seeks comment on whether the small provider threshold of 100,000 of fewer broadband connections is an appropriate threshold.

Per the 2015 Open Internet Order, the Consumer and Governmental Affairs Bureau must determine whether or not to maintain an exemption by December 15, 2015.

Comment Date: 30 days after publication in the Federal Register
Reply Comment Date: 60 days after publication in the Federal Register

Please contact us if you have any questions. 

Wednesday, June 24, 2015

TLP Sponsors Gifts for the Homeless Charity Event

Last week, TLP served as a sponsor of Banding Together 2015, a Washington, D.C. charity eventThe event was hosted by Gifts for the Homeless and raised an astonishing $271,094 for the charity.  Gifts for the Homeless raises money to purchase winter items for the D.C. homeless.  The money raised last Thursday will go directly toward purchasing things like winter coats, hats and gloves for those in need.

TLP's Managing Member, Mike Lazarus, and his band "One for the Governor" also participated in the event. 

More information about the event or about Gifts for the Homeless can be found here

TLP's Mike Lazarus Leads Panel on the FCC Enforcement Process

TLP’s Managing Member, Mike Lazarus, attended the American Conference Institute’s “FCC Boot Camp” as a speaker this week.  Mike participated on the panel: “How to Respond to FCC: Best Practices, Tips, Tricks, and Pitfalls to Avoid.”  As a speaker, Mike used his expertise and experiences to provide an overview of the FCC’s enforcement process.  Mike also discussed how to respond if you receive a LOI or NAL, recent Enforcement Bureau trends, and what individuals and entities may expect in the future.  The conference was held Monday, June 22 to Wednesday, June 24, 2015 in San Francisco, CA.   

Please don’t hesitate to contact us if you have any questions about the FCC Boot Camp, or the FCC enforcement process.

Tuesday, June 23, 2015

FCC Fines AT&T $100 Million for Violating Transparency Rule

The Commission has released a Notice of Apparent Liability and Forfeiture Order issuing a record-breaking forfeiture of $100,000,000 against AT&T for its apparent, willful and repeated violation of Section 8.3 of the Commission’s rules, known as the 2010 Open Internet Transparency Rule.  This release further demonstrates the new Enforcement Bureau Chief Travis LeBlanc’s commitment to provide “vigorous enforcement” and serves as a good reminder for all companies to review their policies and assess their compliance with the Open Internet rules currently in effect. 

AT&T’s violation concerns the Transparency Rule that went into effect in 2011 per the 2010 Open Internet Order.  AT&T’s violation does not fall under the adopted Enhanced Transparency Rule adopted this year that is still subject to OMB approval.  The Commission’s 2010 Transparency Rule requires providers of broadband Internet Access Services, including mobile broadband Internet access providers, to effectively disclose their network management practices, network performance, and commercial terms of service, among other things.

The Commission finds that AT&T violated the rule by:
  • using the misleading and inaccurate term “unlimited” to label a data plan that was in fact subject to significant speed restrictions after a customer used a set amount of data; and
  • failing to disclose the express speed reductions that it applied to “unlimited” data plan customers once they hit a specified data threshold. 
In addition to paying the $100 million fine, AT&T is required to come in to compliance with the 2010 Transparency Rule.  AT&T must correct any misleading and inaccurate statements about its unlimited data plan, issue a new disclosure statement, and allow customers currently under the contract to cancel their plans without penalty. 
If you have any questions regarding the scope of these rules, please do not hesitate to contact a member of the TLP Team.

FCC Releases NPRM Addressing Vacant Channels for White Space Devices

Last week the Commission released a Notice of Proposed Rulemaking tentatively concluding that it will preserve at least one vacant UHF television channel in each area of the United States, for use by white space devices and wireless microphones, following the Incentive Auction.

This NPRM seeks comment on the procedures for ensuring that one channel remains available, asking what should be required of affected LPTV, TV Translator, and BAS applicants to protect such a channel.  Specifically, the FCC tentatively concludes that these applicants be required to submit a demonstration that their proposed new/modified facility will not eliminate the last available vacant channel.

The FCC seeks further comment on: 
  • which broadcast applicants proposing operations in the repacked UHF television band should be required to make the above-referenced required demonstration; and
  • the procedures for identifying which channels and which specific areas the FCC should use to ensure the availability of at least one vacant channel. 
The proposals in the NPRM would apply following the incentive auction, and “none of the proposals will act as a constraint in the repacking process or limit the spectrum that is made available in the forward auction.”

Comments will be due 30 days from publication in the Federal Register. 
Reply comments will be due 60 days from publication in the Federal Register. 

Please do not hesitate to contact us with any questions.

FCC Makes Decision on “Highly Confidential” Roaming Information

The FCC released a Letter Order and Protective Order concerning a roaming complaint proceeding between Verizon and NTCH (EB Docket No. 14-212).  Most notably, this Letter Order denies a challenge filed by NTCH, and confirms that Verizon’s designation of certain roaming information as being “highly confidential” is appropriate.

Verizon originally requested that certain roaming information submitted in its Response to Interrogatories be deemed “highly confidential,” which, in part, means that only Outside Counsel and Outside Consultants to the Reviewing Party (along with FCC staff and consultants) may review such material.  This information includes: 
  • information about the rates and rate structure for Verizon’s LTE in Rural America (“LRA” program); 
  • information about the rates, terms, and conditions in an agreements with a Verizon reseller; and 
  • information about roaming rates, traffic volume, and pricing terms and conditions with dozens of other carriers. 
NTCH objected to this request, arguing that if access to that was not made available to its internal personnel with expertise in this area, NTCH will not be able to fully prosecute its complaint by comparing the roaming rates offered by Verizon to NTCH to rates offered to other parties.  NTCH also argued that the rate information in this case does not typically receive the enhanced protection afforded to “highly confidential” material.

Verizon argues that its business would be impaired by the disclosure of its roaming and resale rate information to NTCH , and that NTCH would be given a significant competitive advantage by gaining access to this information. In the Letter Order, the Commission agreed with Verizon based on the facts:
  • Verizon competes for roaming and wholesale business in all of the markets where NTCH currently operates;
  • NTCH employees “cannot simply ‘forget’ Verizon’s roaming and resale rate information”;
  • the rate and traffic volume information designated by Verizon could give NTCH a competitive advantage by giving it “information that could potentially assist it in pricing its resale and/or roaming rates to undercut Verizon’s in markets where NTCH and Verizon compete for wholesale and/or roaming business.” 
The Commission further notes that if NTCH requires expertise beyond that of its Outside Counsel, the Protective Order permits the use of an “Outside Consultant”.

In addition to the above, the Letter Order adopts a Protective Order consented to by the Parties and also a 10-day extension for NTCH to file discovery requests.  Please contact us if you have any questions.

FCC Releases Public Notice Regarding ASR System Rules

The FCC has released a Public Notice reminding antenna structure owners of their obligation to comply with the Antenna Structure Registration (ASR) rules.  In order to bring attention to potential violations, the Public Notice provides a list of the types of defects owners should be mindful of, for example, failing to obtain an FAA No Hazard Determination prior to construction, failing to notify the Commission within five days of completion of construction, or failing to obtain a new registration prior to the alteration of an antenna structure.  With respect to the last example, the Commission has amended its rules to define what constitutes an alteration requiring registration, and this change will become effective after approval by OMB.  The Notice also warns applicants against prematurely certifying that the structure would not have a significant environmental impact.

The Commission also uses the Public Notice to caution antenna structure owners that violations of the rules may result in an enforcement action.

Please contact us if you have any questions. 

Tuesday, June 16, 2015

Incentive Auction Eligible Station List Released

The FCC has released the eligible station list for the incentive auction.  These stations are eligible for protection in the repacking process or for relinquishment in the reverse auction.

The accompanying Public Notice announces that any licensee with a station listed in the Appendix must file an FCC Form 2100, Schedule 381 (“Pre-Auction Technical Certification Form”), through which it will verify and certify to the accuracy of the authorization and underlying Database Technical Information for each eligible facility by July 9, 2015. 

The Pre-Auction Technical Certification Form includes two questions. The first question requires licensees to certify that they have reviewed the authorization for each eligible facility listed in the Appendix and to indicate whether the underlying Database Technical Information for their eligible facility is correct.

"Database Technical Information" means all underlying technical data that sets forth the operational parameters of the facility, including but not limited to the technical information that may be found in the Commission’s Consolidated Database System (as well as the successor Licensing Management System) and Antenna Registration System.

The second question requires licensees to provide additional information concerning their eligible facility, including information regarding the eligible facility’s transmitter, antenna, and antenna support structure. The Commission will use this information to help facilitate the repacking process.

Please don't hesitate to contact us if you have any questions, or would like assistance with filing this certification.

ETC Annual Report Due July 1

The FCC Form 481 – the Annual Report for High Cost and/or Lifeline programs – is due July 1, 2015. 

ETCs seeking USF support in either the Lifeline/Tribal or High Cost programs must submit the financial and operations information required by this form.  Please note that this filing must be submitted to the FCC and USAC, along with any relevant state commission or Tribal governments, as appropriate. 

The Form 481 may be submitted to USAC using the USAC E-File System (http://www.usac.org/about/tools/e-file.aspx) and may be submitted to the FCC via ECFS (http://apps.fcc.gov/ecfs/) in WC Docket No. 14-58.  Parties seeking confidential treatment of portions of their submission should file with the FCC pursuant to section 0.459 of the FCC’s rules.  For more information please reference the Form 481 Instructions and FAQs, provided by USAC.

Please don't hesitate to contact us if you have any questions or need assistance with the filing of this report.

D.C. Circuit Court of Appeals Denies Petitions of Review

Last Friday, the Court of Appeals for the D.C. Circuit denied petitions of review of the FCC’s Incentive Auction Order, submitted by the National Association of Broadcasters and Sinclair Broadcast Group. Inc. 

Specifically, the Petitioners sought review of the Commission’s approach for determining the geographic area and customer base served by each broadcast licensee.  The Spectrum Act grants the Commission authority to reassign channels as it sees fit when reallocating broadcast spectrum to other uses (see 47 U.S.C. § 1452(b)).  The Spectrum Act also states, however, that when doing so the Commission “shall make all reasonable efforts to preserve, as of February 22, 2012,  the coverage area and population served of each broadcast television licensee, as determined using the methodology described in OET Bulletin 69 of the Office of Engineering and Technology of the Commission.”

 The Petitioners sought review of the Commission’s interpretation and application of that language. In its opinion, the court determined that although the “methodology” to be used is ambiguous, the Commission made a reasonable interpretation.  Thus, the Commission was not foreclosed from use of the improved TVStudy program or the updated data inputs, rather than the specific computer software and data inputs the Commission would have used to make those determinations, on February 22, 2012, when determining a broadcaster’s coverage area and population served for purposes of the reverse auction. 

FCC Chairman Tom Wheeler issued a statement responding the court’s decision.  The Chairman stated, “[w]e are gratified that the Court agrees with the Commission’s balanced, market-based approach to freeing up more valuable spectrum for innovative wireless broadband services. This decision provides the Commission and all stakeholders with the certainty necessary to proceed apace toward a successful auction in the first quarter of next year.”

Please do not hesitate to contact a member of the TLP Team if you have any questions.