Legislative Activity

Senate Appropriations Committee Passes Bill That Would Decrease FCC’s Budget

On Thursday, July 23, the Senate Committee on Appropriations (Senate Appropriations Committee) approved the Fiscal Year 2016 (FY16) Financial Services and General Government Appropriations Bill (Appropriations Bill). The Federal Communications Commission (FCC) would receive $320 million, a cut of $20 million (roughly 6%) below the enacted level for Fiscal Year 2015. The bill provides funding for the FCC’s moving expenses as its leases expire. However, that funding may only be utilized if the FCC substantially reduces the size of its leased space. The legislation contains a number of riders. First, it prohibits the FCC from regulating prices or related terms in the FCC’s implementation of its 2015 Open Internet Order. Second, the bill restricts the use of money from the Universal Service Fund (USF) to expand access to broadband. An amendment from Sen. Jon Tester (D-MT) instructs the FCC to work with the Rural Utilities Service (RUS) to promote broadband deployment in rural parts of the country. The bill also exempts existing joint sales agreements (JSAs), the financial arrangements between local television broadcasters that govern the sale of advertising between stations, from recent FCC JSA rules that would require all such arrangements to be unwound by 2016. The approval of the Appropriations Bill by the Senate Appropriations Committee completes committee-level action on the bill.

Senators Call For FCC to Extend Consumer Privacy Rules to Broadband

On July 22, a group of nine Senators wrote a letter to FCC Chairman Tom Wheeler urging the FCC to extend the FCC’s protection of customer proprietary network information (CPNI) to broadband consumers. In the letter, the Senators applauded the FCC’s 2015 Open Internet Order, in which it reclassified broadband as a telecommunications service regulated under Title II and chose to apply Section 222 of Title II, regarding the privacy of customer information, to broadband providers. The Senators urged the FCC to undertake a rulemaking in order to adapt and expand existing privacy protections to encompass broadband providers. Among a variety of suggestions to be considered in the rulemaking, the Senators highlighted that broadband consumer information should not be shared beyond the extent necessary for the Internet service provider (ISP) to deliver the requested service to the consumer. In addition, the Senators requested the FCC to consider implementation of robust data security and breach notification procedures in the event of a network or database breach. Chairman Wheeler has indicated that the FCC will likely commence work on broadband privacy issues this coming fall.

This Week’s Hearings:

  • Tuesday, July 28: The Subcommittee on Communications and Technology of the House Committee on Energy and Commerce will hold a hearing entitled “Continued Oversight of the Federal Communications Commission.” FCC Chairman Tom Wheeler and Commissioner Ajit Pai will testify at this hearing.
  • Wednesday, July 29: The Subcommittee on Courts, Intellectual Property, and the Internet of the House Judiciary Committee will hold a hearing entitled “Internet of Things.”

Regulatory Activity

FCC Approves AT&T’s Acquisition of DIRECTV with Conditions

On July 24, the FCC announced that it had approved AT&T’s proposed $48.5 billion acquisition of DirecTV, subject to certain conditions. Although the Order approving the transaction has not yet been released, an FCC news release stated that the conditions imposed by the FCC will “address potential harms” presented by the merger of “AT&T, one of the nation’s largest telephone and Internet service providers” with “DIRECTV, the nation’s largest satellite video provider.” Specifically, the FCC is requiring AT&T-DIRECTV to:

  • Expand fiber to the premises (FTTP) (e., fiber optic service) to 12.5 million customer locations.
  • Offer gigabit service to any E-rate eligible school or library where AT&T-DIRECTV deploys FTTP service.
  • Refrain from “imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet access service.”
  • Submit its interconnection agreements to the FCC for review to determine whether “AT&T-DIRECTV is denying or impeding access to its networks in anticompetitive ways.” Interconnection agreements are contracts for the exchange of traffic between service providers.
  • Make available “an affordable, low-price standalone broadband service to low-income consumers in its broadband service area.”
  • Retain an “internal company compliance officer and an independent, external compliance officer” to monitor and report on the combined entity’s “compliance with all conditions of the merger.”

According to the news release, these conditions will “generally” remain in effect for four years following the close of the transaction.

Comment Dates Established for Lifeline Reform Proposals

On June 22, the FCC released a Second Further Notice of Proposed Rulemaking, Order on Reconsideration, Second Report and Order, and Memorandum Opinion and Order implementing various reforms to the Lifeline program intended to expand access to broadband services to low-income consumers, as well as seeking comment on other proposals to further access. The item is discussed in our blog post here. The proposals on which the FCC is seeking comment include whether to: (1) establish minimum service levels for voice and broadband Lifeline service; (2) set a permanent program support amount of $9.25; (3) establish a third-party “national verifier” for consumer eligibility; (4) establish a budget for the program; and (5) encourage participation by states and providers to increase competition in the program. Pursuant to the publication of the item in the Federal Register, comments on the FCC’s proposals are due August 17, and reply comments are due September 15.

FCC Seeks Comment on Updates to its Radiofrequency Authorization Rules

On July 21, the FCC released a Notice of Proposed Rulemaking seeking comment on proposals designed to “update” the agency’s rules governing evaluation and approval of radiofrequency (RF) devices. Specifically, the FCC is seeking comment on proposals to: (1) combine the Declaration of Conformity and verification programs into one product self-approval program; (2) “codify and clarify” the provisions for certification of modular transmitters; (3) “clarify responsibilities” for compliance when a final product may be composed of one or more modular transmitters; (4) codify “existing practices” for protecting the confidentiality of market-sensitive information; (5) “codify and expand” existing guidance for electronic labeling; (6) eliminate “unnecessary or duplicative rules[;]” and (7) discontinue the requirement that importers file FCC Form 740 with Customs and Border Protection for RF devices that are imported into the United States.

NTIA Commerce Spectrum Management Advisory Committee Meeting August 26

On August 26, the National Telecommunications and Information Administration (NTIA) will hold a meeting of its Commerce Spectrum Management Advisory Committee (CSMAC). According to its charter, CSMAC was created to advise the NTIA on “needed reforms to domestic spectrum policies” to “maximize” public benefits of spectrum and “keep wireless technologies . . . open to innovation” and “available to all Americans.” At the meeting, CSMAC will consider reports from its Subcommittees on General Occupancy Measurements and Quantification of Federal Spectrum Use, Spectrum Sharing Cost Recovery Alternatives, and Industry and Government Collaboration, according to the meeting notice here. The meeting, which is open to the public, will be held August 26 from 1:00 pm to 4:00 pm at the Boeing Regional Headquarters at 929 Long Bridge Drive, Arlington, VA 22202.

FCC to Host a Supplier Diversity Conference and Workshop for Small, Minority- and Women-Owned Business

On August 20, the FCC’s Office of Communications Business Opportunities (OCBO) will host a Supplier Diversity Conference and Workshop “focusing on private sector business opportunities for minority and women-owned businesses[,]” according to a Public Notice released July 22. The event will be held at the FCC”s headquarters on August 20 from 9:30 a.m. until 4:30 p.m. in the Commission Meeting Room. Representatives from “private industry, specifically telecommunications and technology firms . . . [will] discuss their organizations’ contracting procedures and [] provide insight on how small businesses should navigate the procurement process generally.” Panel discussions in the morning will address how “small businesses can distinguish themselves in the race for lucrative opportunities[,]” and FCC Chairman Tom Wheeler and the Commissioners are invited to offer remarks. In the afternoon, OCBO will coordinate confidential meetings with small business owners to provide “individualized advice on supplier strategies and information on current contracting opportunities.” Registrants for the afternoon meetings are asked to submit a “company profile” to the FCC by Friday, August 14 via email at ocboinfo@fcc.gov or by hardcopy to the FCC.

FCC Fines GPSPS $9.065 Million for Illegally Billing and Switching Customers’ Phone Companies

On July 23, the FCC announced that it had fined GPSPS, Inc., an Atlanta telephone company, $9,065,000 for switching customers’ long distance carriers without their authorization (slamming), billing customers for unauthorized charges (cramming), and submitting falsified evidence to government regulatory officials as “proof” that consumers had authorized the company to switch their providers, according to an FCC Forfeiture Order and accompanying news release. According to the news release, the FCC “reviewed more than 150 complaints against GPSPS” detailing that the company had “switched [customers’] long distance service provider[s] without their authorization even though they had never heard of or spoken to the company before discovering GPSPS’s charges on their telephone bills. In many cases, GPSPS refused to refund all of the unauthorized fees it charged consumers.  Instead, the company misrepresented to consumers that they or someone in their household had authorized GPSPS’s service, and that GPSPS possessed an audio recording evidencing the authorization.” According to the FCC, GPSPS “fabricated” those audio recordings. FCC Commissioner Pai issued a statement calling on the FCC to initiate a proceeding to change the FCC’s slamming rules to make the “preferred carrier freeze . . . not an option, but the default.” The preferred carrier service is an elective service that enables customers to prevent their phone carriers from changing their long distance provider without express consent.

FCC Seeks Comment on AT&T Petitions on Text Telephony, Real-Time Text

On July 24, the FCC released a Public Notice seeking comment on two petitions filed June 12 by AT&T Services, Inc. (AT&T). In a Petition for Rulemaking, AT&T “requests that the [FCC] initiate a rulemaking proceeding to authorize the substitution of real-time text (RTT) for text telephony (TTY) in the IP-based environment[,]” according to the Public Notice. RTT is a text that is transmitted instantly as it is typed or created. TTY technology is typically used by individuals who are deaf or hard of hearing to communicate by typing messages on TTY devices that are transmitted over telephone lines. In a Petition for Waiver, AT&T asks the FCC to “waive, on a temporary basis, the [FCC’s] requirements to support TTY technology for devices and services ‘during the pendency of the rulemaking and until RTT is fully deployed to allow [AT&T] to offer [Voice over Internet Protocol] services that do not reliably support TTY[,]’” according to the Public Notice. The FCC states that AT&T’s petitions “request that the [FCC] recognize RTT as an alternative accessibility solution to TTY technology, and as a technology that will provide ‘superior functionality to TTY and deliver enhanced, interoperable disability access.’”