Thursday, April 28, 2016

TLP's Michael Lazarus Quoted in Law360 Article Regarding Charter-Time Warner Cable Deal

TLP's Managing Partner, Michael Lazarus, was quoted in a Law360 Article regarding the Charter-Time Warner Cable Deal. Charter will be buying Time Warner Cable and Bright House Networks, forming the second-largest cable company in the United States. The new company will be known as New Charter. 

Conditions on the merger have been approved by the FCC and Department of Justice. These conditions will prevent New Charter from charging customers usage-based prices for the next seven years, among other things. 

In the article, TLP's Michael Lazarus explains "Charter doesn’t have that sort of visceral reaction that people have to Comcast." "There was a lot more hate attached to the Comcast deal." Mr. Lazarus also stated, in connection with the conditions, "that 'overbuilding' is the kind of move Charter may not have committed to on its own but was willing to do in order to make the deal. The conditions are also in line with Wheeler’s goals, considering the chairman's focus on online video and broadband deployment." "I think in order to get this particular deal through that would create the second-largest cable provider, the chairman had to be able to tout what he would call public interest benefits."

If you would like to read more, you can access the article here. Please do not hesitate to contact us if you have any questions.

Monday, April 25, 2016

Extension Sought for Comments in Privacy Proceeding

A group of industry associations have filed a motion asking the FCC to delay the Notice of Proposed Rulemaking (“Notice”) comment deadlines in the privacy proceeding.  The group requests a 45-day extension of time for filing comments and a reply comments. 

The group argues that the Notice currently only provides 57 days for comments and 30 days for reply comments “for an extremely complex and far-reaching Notice with over 500 questions that has ramifications for the entire online ecosystem.”  The group highlights that through this proceeding, the FCC “seeks to impose comprehensive an onerous requirements on a service that never before was subject to FCC privacy data security, or data breach rules, let alone a set of rules as prescriptive and burdensome as those proposed in the Notice” and as a result, additional time should be provided to ensure that the record is complete.  The group also argues that the current pleading cycle overlaps with several other significant rulemaking comment cycles, which may impose significant hardships on stakeholders, particularly small and mid-sized entities.

The group consists of the American Cable Association, Consumer Technology Association, CTIA, Internet Commerce Coalition, NCTA, U.S. Telecom Association, and WISPA.  As you may be aware, another organization, the Association of National Advertisers (“ANA”), also previously filed a comment extension request seeking an addition 60 days.

Please let us know if you have any questions or would like additional information.

FCC Releases Agenda for April Open Meeting

The following Agenda has been released for this month’s FCC Open Meeting, scheduled to begin at 10:30 am on Thursday, April 28, 2016:
  1. Transition from TTY to Real-Time Text Technology: The Commission will consider a Notice of Proposed Rulemaking that seeks comment on proposals to support real-time text communications over Internet Protocol communications networks, to improve the accessibility of these networks for consumers who are deaf, hard of hearing, deaf-blind, and speech disabled.
  2. Business Data Services in an Internet Protocol Environment: The Commission will consider a Tariff Investigation Order and a Further Notice of Proposed Rulemaking proposing a new regulatory framework for the provision of business data services.
  3. Amendment of the Rules Re: Commercial Operations in the 3.5 GHz Band: The Commission will consider an Order on Reconsideration and a Second Report and Order that will finalize rules for the innovative spectrum sharing regime it created for making 150 megahertz available in the 3.5 GHz band.
The Commission will also consider several Media and Enforcement actions as consent agenda.  

Please contact us if you have any questions.

Friday, April 22, 2016

FCC Approves Sprint/Shentel/NTELOS Transaction

The Commission has released a Memorandum Opinion and Order granting consent, with conditions, to the application of Sprint, Shentel, and NTELOS (“applicants”) for the transfer and control and assignment of a number of AWS-1, PCS, BRS, and EBS spectrum licenses from NTELOS to Shentel and Sprint.  The applicants sought approval of the assignment or lease of a maximum of 135 MHz of spectrum covering 153 counties in all or parts of thirty-eight CMAs in portions of Kentucky, Maryland, North Carolina, Ohio, Pennsylvania, Virginia, and West Virginia.  The proposed initial assignment covers approximately 5.5 million people or approximately 2 percent of the population of the United States.

In its review, the Commission applied its two-part screen, and found that the Herfindahl-Hirschman Index (“HHI”) screen was triggered in 12 of the thirty-eight CMAs.  When applying the total spectrum screen, on a county-by-county basis, the Commission found that Sprint newly triggered 29 counties in all or parts of 9 of the thirty-eight markets.  The Commission also asserted that Sprint owns 200.5 megahertz of spectrum in Perry County covering approximately 20 percent of the market’s population, and would increase its holdings further to 215.5 megahertz as a result of the transaction.  The applicants argued that in twelve of the thirty triggered counties, the screen is exceeded by 10 megahertz or less and that there would be no competitive harm.

The factors considered by the Commission in its analysis include but are not limited to:
  • the total number of rival service providers;
  • the number of rival firms that can offer competitive service plans;
  • the coverage by technology of the firms’ respective networks;
  • the rival firms’ market shares;
  • the combined entity’s post-transaction market share and how that share changes as a result of the transaction;
  • the amount of spectrum suitable for the provision of mobile telephony/broadband services controlled by the combined entity; and
  • the spectrum holdings of each of the rival service providers.


The Commission found that there was potential for certain competitive harms.  More specifically, Sprint’s spectrum aggregation raised some competitive concerns, particularly in a cluster of Virginia markets.  Of the 15 Virginia markets, six triggered the HHI and spectrum screens, two triggered the HHI screen, and one triggered the spectrum screen.  In the seven Virginia markets triggered by the spectrum screen, Sprint, post-transaction, would hold a maximum of 240.5 MHz of spectrum in total.  The Commission mitigated these concerns by requiring, as a condition, the applicants to divest some of the spectrum being acquired by Sprint from NTELOS in certain markets in Virginia.  The Commission also had concern about the exit of NTELOS as an independent facilities-based service provider in certain markets in Virginia and West Virginia.

The Commission applied its public interest “sliding scale approach”, under which, if potential harms appear “both substantial and likely, a demonstration of claimed benefits also must reveal a higher degree of magnitude and likelihood than we would otherwise demand.”  When the opposite case is true, the Commission accepts a lesser showing.  The applicants asserted that the public interest benefits, including enhanced wireless coverage through network densification and expansion, outweighed any harms.  After imposing the below deployment commitments as conditions to help ensure that the claimed public interest benefits are achieved, the Commission applied its sliding scale test and approved the transaction.

The applicants are required to meet the following conditions:
  • within six months of the transaction closing, file applications with the Commission to assign or transfer control of spectrum (identified in Appendix 1 of the Order);
  • during the five years immediately following the transaction closing, invest approximately $350 million in network-related capital improvements to reduce coverage gaps in the current NTELOS service area and to accelerate the on-going 4G LTE upgrade and expansion of the existing NTELOS network;
    • complete a network-wide deployment of 4G LTE service in Band Class 25 (1900 MHz), as well as commits to complete a network-wide deployment of 4G LTE and voice services in Band Class 26 (800 MHz) in the current NTELOS service area;
    • deploy 4G LTE service in Band Class 41 (2.5 GHz) in current NTELOS service areas with greater population density;
    • deploy 4G LTE service to improve wireless data speeds and capacity in NTELOS service areas that require additional 4G LTE capacity due to their greater population density, such as Charlottesville and Roanoke in Virginia, and Charleston and Morgantown in West Virginia;
  • within 36 months after the transaction closes, add approximately 150 new cell sites in the NTELOS service territory, which will result in a higher cell site density level and improve the customer experience;
  • upgrade the 857 existing NTELOS cell sites that were active as of December 31, 2015; and
  • substantially complete the 4G LTE upgrades for the 857 existing cell sites within twenty-four months after the transaction closes.

Please contact us if you have any questions or concerns.

Commissioner Pai Sends Lifeline Letter to USAC

The Commission has released a letter sent to the Universal Service Administrative Company (“USAC”) by Commissioner Pai, discussing the abuse and fraud riddling the USF Lifeline program.  In his letter, Commissioner Pai discusses the recent investigation of Total Call Mobile, recognizing the alleged fraudulent practices by Total Call Mobile, as well as other Lifeline wireless resellers named by Total Call Mobile, and requests that he be sent the following information by May 2, 2016:
  • For each of the four Lifeline wireless resellers named by Total Call Mobile sales agents:
    • A description of any investigations, audits, or reviews that USAC has conducted on the companies from October 2014 to the present, along with any reports of findings drafted or issued;
    • If USAC informed any of the carriers of duplicate enrollments, the number of duplicate enrollments involved and the date on which the carrier de-enrolled them;
    • For each study area of each company from October 2014 to the present, a table showing how many subscribers enrolled each month, how many were newly enrolled or transfers from other Lifeline carriers, how many subscribers were accrued as a result of an override of the NLAD’s safeguards, and among subscriber-overrides, how many were attributable to the third-party-independent-verification check, the postal-address check, and the independent-economic-unit check; and
    • To the extent USAC knows, how many subscribers relied on SNAP cards or temporary or blank SNAP cards for eligibility verification;
  • A list of any Lifeline wireless resellers that overrode the safeguards of the NLAD more than 500 times between October 2014 and the present; and
  • An explanation of USAC’s plan for reviewing, auditing, and investigating eligibility documentation retained by Lifeline wireless resellers since February 17, 2016, as well as the results of any such review, audit, or investigation.

Please let us know if you have any questions.

Monday, April 18, 2016

FCC Extends Deadline for SAS and ESC Proposals

The Commission has released a Public Notice extending the deadline for “first wave” proposals from prospective SAS Administrators and ESC operators until May 15, 2016.  According to the Public Notice, the Commission granted the extension in order to give parties sufficient time to address the issues raised in the 3.5 GHz Order and SAS/ESC Public Notice.

The Commission does note, however, that the filing window has been open since January 15, 2016, and that prospective SAS Administrators and ESC operators are free to submit proposals at any time.  The Commission also notes that parties that have already submitted a proposal may update the proposal to address recent/future developments.

Please let us know if you have any questions.

FCC Seeks Comment on Verizon and XO Communications Pending Transactions

The Commission has released a Public Notice establishing the pleading cycle for a proposed transaction between XO Communications and Verizon Communications.  The parties are seeking approval to transfer control of various licenses and authorizations held by XO Communications from XO Holdings to Verizon.

If approved, XO Holdings would sell all of its interests in XO Communications to Verizon, and XO Communications, along with its operating subsidies, would become a wholly owned, indirect subsidiary of Verizon.  The applicants assert that the transfer of control will serve the public interest, convenience, and necessity and that it would allow Verizon to enhance its reach and improve its services, especially in areas outside of Verizon’s incumbent LEC footprint.  The applicants also assert that the transfer will create more than $1.5 billion in operational and economic efficiencies by eliminating certain access costs currently paid to third parties.  The applicants claim that all of this would be accomplished without harm to competition or the marketplace.

The Commission did not conduct a preliminary review of the transaction.

Comments/Petitions:      May 12, 2016
Replies/Oppositions:      May 27, 2016


In a separate Public Notice, the Commission seeks comment on the long-term de facto lease between Nextlink and Verizon.  Nextlink Wireless, LLC, a subsidiary of XO Holdings, agreed to lease to Cellco Partnership d/b/a Verizon, and XO Holdings also agreed to provide Verizon Wireless an option to acquire control of, certain wireless local multipoint distribution service (“LMDS”) and 39 GHz licenses held by Nextlink.  

If approved, the lease agreement with give Verizon the authorization to use all of Nextlink’s LMDS and 29 GHz spectrum, except for discrete spectrum and geographic areas that are subject to existing leases to third parties or to contractual requirements to reserve spectrum for the use of third parties.  The proposed lease would terminate upon the later of: December 31, 2018, or the closing of the purchase by Verizon of the Nextlink interests.  

The applicants assert that the lease is in the public interest because it will help Verizon move forward with 5G research, development, and testing.

Petitions to Deny Due:         May 3, 2016
Oppositions Due:                 May 13, 2016
Replies Due:                         May 20, 2016

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

Friday, April 15, 2016

FCC Chairman Wheeler Releases Blog Post on April Items

FCC Chairman Wheeler has released a blog post titled, “Out with the Old, In with the New” addressing the two items placed on April’s tentative agenda: the Notice of Proposed Rulemaking addressing the transition from TTY to RTT technology and the Further Notice of Proposed Rulemaking proposing a new regulatory framework for the provision of business data services.

In the blog post, Chairman Wheeler states that the two items aim to “sweep away old, 20th-century regulations and replace them with new rules that reflect 21st-century technologies and markets.”

TTY to RTT NPRM

The Notice of Proposed Rulemaking addressing the transition from TTY to RTT technology will replace the outdated rules requiring that equipment manufacturers support TTY technology, with new rules requiring these entities to support real-time text over IP-based wireless services.  Chairman Wheeler highlights the benefits of RTT and notes that, not only is it designed for IP networks, but is also superior to TTY technology with respect to its speed, latency, reliability, features, and ease of use.

Chairman Wheeler hopes that, by adopting rules, “millions of Americans with disabilities who rely on text to communicate have accessible and effective telephone access as communications technologies make the transition from circuit-switched to IP-based technologies.”

Business Data Services FNPRM

The FNPRM addressing special access aims to meet the following goals:
  • identify those markets that are competitive, and those that are not, and to adopt a tailored regulatory framework to mirror those distinctions;
  • adopt technology neutral rules so that BDS services are governed by the same overarching legal principles; and
  • cease the tariffing of BDS in all markets for all BDS products.

Chairman Wheeler also states that the item will contain a Tariff Order proposing to bar certain specific contractual practices that slow down the switch from legacy TDM services to newer IP-based services.  Chairman Wheeler hopes that the Commission will be able to adopt a final Order in 2016.

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

FCC Form 499-Q Due May 2, 2016

This is a reminder of the upcoming deadline for filing the FCC Form 499-Q and supporting documentation.  All telecommunications carriers that provide interstate telecommunications services are required to electronically file an FCC Form 499-Q Telecommunications Reporting Worksheet on or before May 2, 2016.  Typically Form 499-Q is due on or before May 1, but since May 1 is a Sunday, the deadline will be pushed forward to the next business day.  Carriers must provide revenue information for January 1 through March 31 of the prior calendar year and projections for July 1 through September 30.  In addition, to the extent that interconnected VoIP and CMRS providers rely on a traffic study to report interstate revenues for the May filing of the Form 499-Q, the traffic study relied upon must be included with this filing. 

The Form and filing instructions may be found here.  If you require assistance in filing this form, please don't hesitate to contact us.

Thursday, April 14, 2016

FCC Announces Tentative Agenda for April Open Meeting

The FCC has announced the following tentative agenda for the next Open Meeting, scheduled for Thursday, April 28, 2016 at 10:30 am:

Transition from TTY to Real-Time Text Technology: The Commission will consider a Notice of Proposed Rulemaking that seeks comment on proposals to support real-time text communications over Internet Protocol communications networks, to improve the accessibility of these networks for consumers who are deaf, hard of hearing, deaf-blind, and speech disabled.

Business Data Services: The Commission will consider a Tariff Investigation Order and a Further Notice of Proposed Rulemaking proposing a new regulatory framework for the provision of business data services.

Please let us know if you have any questions or concerns. 

FCC Announces Total Call Mobile $51 Million NAL for Lifeline Overbilling

Last week, the Commission released a Notice of Apparent Liability for Forfeiture and Order finding Total Call Mobile (“TCM”) apparently liable for overbilling the Lifeline program by enrolling tens of thousands of duplicate and ineligible consumers into the program.  The Commission proposes a $51,070,322 forfeiture penalty, which reflects the seriousness, duration, and scope of TCM’s multiple apparent violations.  The categories of TCM’s apparent violations involve:
  • the filing of and failure to correct improper Form 497s; 
  • the lack of policies and procedures to ensure consumer eligibility; and
  • the enrollment of 2,587 duplicate consumers for several months after USAC specifically alerted TCM to these improper enrollments.  

Specifically, the Enforcement Bureau’s Universal Service Fund Strike Force’s investigation of TCM found that the company apparently engaged in systematic and egregious misconduct, involving over 800 TCM employees, including:
  • sales agents enrolled tens of thousands of duplicate consumers;
  • the company was aware of a systematic problem of duplicate enrollments as early as November 2013;
  • during the fourth quarter of 2014, 99.8 percent of TCM’s enrollments nationwide involved overriding the third-party verification system designed to catch duplicate enrollments;
  • sales agents shared eligibility documents, such as Supplemental Nutrition Assistance Program (SNAP) cards, in order to use the documents to conduct multiple enrollments;
  • employees staffing an internal sales agent help line advised agents on how to get around or disguise defective identification or eligibility documentation for applicants;
  • as early as May 2014, employees told TCM management that they were aware of increasing instances of eligibility fraud, but no meaningful changes to employee training or verification procedures were made; and
  • one sales agent used the identification from a stolen wallet to register 10 Lifeline cell phones in the name of the wallet’s owner without his/her permission.

From January 2014 through March 2016, TCM received a total of $60,865,254 in reimbursements from the Fund.  The Commission finds that the Fund has been harmed by an amount equal to at least 16 percent of TCM’s requests for reimbursement from the Fund during this time ($9,738,440.64).  In developing the forfeiture amount, the Commission relies on Section 503(b)(2)(B) of the Act, which authorizes the Commission to assess a forfeiture of up to $160,000 for each violation or each day of a continuing violation, up to a statutory maximum of $1,575,000 for a single act or failure to act.  In addition to base forfeitures for TCM’s apparent violations, the Commission also proposes several upwards adjustments for TCM’s egregious violations, notably, an upwards adjustment of $29,215,322, which is three times the amount of the loss to the Fund due to TCM’s actions.

TCM must pay the proposed forfeiture or file a written statement seeking reduction or cancellation of the proposed forfeiture.  TCM is also ordered to submit a report and explain why the Commission should not (1) order USAC to suspend all Lifeline reimbursements to TCM; (2) revoke approval of TCM’s ETC compliance plan; and (3) initiate proceedings against TCM to revoke its Commission authorizations.  TCM must respond within 30 days from the April 7th release of the NAL to this request.

The FCC has also released a News Alert concerning the NAL.

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

Tuesday, April 12, 2016

FCC Adopts NPRM on Customer Privacy

The FCC has adopted a Notice of Proposed Rulemaking (“NPRM”) outlining a proposed framework that would apply the traditional privacy requirements of Section 222 of the Communications Act to broadband Internet access service (“BIAS”) by focusing on transparency, choice, and data security.  A brief summary of the NPRM is provided below.

The proposed framework is based on a multi-level structure of customer opt-in and opt-out approval that depends on the type of customer information being used or shared.  The goal of this structure is to give customers more control over what information is shared or used by their BIAS provider.  All uses and sharing of consumer proprietary information, with two exceptions explained further below, would require opt-in approval on the part of the customer.  In the NPRM, the Commission also proposes a series of “clear and conspicuous” notice requirements aimed to educate consumers about the BIAS providers’ privacy policies, and to ensure that affected customers are notified in the event of an unauthorized breach.  The majority of the proposed requirements would only apply to BIAS providers, as they were defined by the 2015 Open Internet Order.  However, the policies related to breach are proposed to apply to all telecommunications carriers.  The Commission also seeks comment on whether any of the other policies should apply to additional groups of providers, such as Interconnected VoIP providers or voice communications providers.

FCC Commissioners Pai and O’Rielly both dissented from the NPRM.  Commissioner Pai stated that the NPRM “tilts the regulatory playing field by proposing to impose more burdensome regulation on Internet service providers, or ISPs, than the FTC imposes on so-called ‘edge providers.’”  Commissioner O’Rielly agreed and noted that “instead of taking the time to understand the current privacy landscape, including the FTC’s well-regarded standards and body of precedent, the [NPRM] falls back on the familiar cut and paste job, attempting to force Customer Proprietary Network Information (CPNI) rules and definitions onto broadband.”

Comments will be due by May 27, 2016.  Reply Comments will be due by June 27, 2016.

Please let us know if you have any questions.

Friday, April 8, 2016

AT&T Acquires Lower 700 MHz Spectrum in Alabama

The Wireless Bureau (the “Bureau”) has approved a transaction that will result in AT&T acquiring additional Lower 700 MHz spectrum.  Post transaction, AT&T would hold more than one third of the currently suitable and available below-1-GHz spectrum in the market area, therefore triggering the enhanced factor review.  The Bureau finds that the likelihood of competitive harm is low and that the public interest would be served. 

AT&T Inc. and New Cingular Wireless PCS, LLC/Farmers Telecommunications Corporation involves the assignment of one Lower 700 MHz C Block license covering one Cellular Market Area (CMA) in Alabama.  Through this license, AT&T would acquire 12 megahertz of low-band spectrum in 3 counties in this CMA.  Post-transaction, AT&T would hold 115 megahertz to 125 megahertz of spectrum in total, including 55 megahertz of below-1-GHz spectrum, in Alabama 2 - Jackson.  The transaction does not result in the acquisition of wireless business units and customers, so the Bureau does not apply the initial HHI screen in its analysis.  The total spectrum screen is not triggered by the transaction, either.

Market-Specific Review: Under the market-specific review, the following variables are considered to help predict the likelihood of competitive harm post-transaction:
  • the total number of rival service providers; 
  • the number of rival firms that can offer competitive service plans; 
  • the coverage by technology of the firms’ respective networks;
  • the rival firms’ market shares; 
  • the combined entity’s post-transaction market share and how that share changes as a result of the transaction; 
  • the amount of spectrum suitable for the provision of mobile telephony/broadband services controlled by the combined entity; and
  • the spectrum holdings of each of the rival service providers.

In its analysis, the Bureau finds that, with respect to below-1-GHz spectrum, Verizon holds 47 megahertz, Sprint holds 14 megahertz, and T-Mobile holds 12 megahertz, covering approximately 17 percent of the population of this CMA.  Cellular South d/b/a C Spire holds 12 megahertz covering approximately 83 percent of the population.  Post-transaction, AT&T would hold 55 megahertz of spectrum below 1 GHz, while the other three nationwide service providers hold 60 megahertz to 175 megahertz of spectrum.  Based on these holdings, and the fact that the CMA is a rural market, the Bureau determined that the likelihood of competitive harm is low.

Public Interest Benefits: The Bureau applies several criteria in deciding whether a claimed benefit should be considered and weighed against potential harms, and applies a “sliding scale approach” to evaluating benefit claims.  The Applicants assert that the proposed transaction would enable AT&T to enhance existing services, better accommodate its overall growth, and facilitate the provision of additional products and services.  AT&T also claims that it would use the Lower 700 MHz spectrum acquired to improve the quality of service and meet the growing demand for LTE services.  After finding that the ability of other providers to offer competitive services in response to AT&T is not lessened in this CMA, and that the public interest benefits outweigh any potential harm, the FCC approved the transaction.

Please let us know if you have any questions.