Disability Issues Dominate FCC’s July Open Meeting
01 September 2005
Article by Charles H. Kennedy
Disability Issues Dominate FCC’s July Open Meeting
http://www.mondaq.com/i_article.asp?articleid=34618
Marking the 15th Anniversary of the Americans with Disabilities Act on July 26th, the FCC recently established three new rules that expand its interpretation of "functionally equivalent" access to the nation’s telecommunications system. The FCC also initiated a review of its closed captioning rules by seeking comment about various aspects of closed captioning .
First, the FCC developed speed of answer requirements for Video Relay Service ("VRS"). VRS is a form of telecommunications relay service ("TRS") that enables an individual with a hearing or speech disability to communicate by telephone or other device through the telephone system with a person without such a disability. Instead of relying on TTY or text-based calls, however, VRS allows communications using sign language through a communications assistant ("CA"), who facilitates the call by a video link. The new rules establish mandatory speed of answer requirements for VRS, require VRS to be offered twenty-four hours per day, seven days a week, and permit VRS providers to be compensated for messages they leave for hard-of-hearing persons who are not able to take the call.
The FCC also determined that two-line captioned telephone service ("CTS") is eligible for support from the TRS Fund, to which all interstate carriers contribute. In so doing, the FCC expanded its interpretation of "functional equivalency" for millions of Americans who are hard of hearing. CTS uses a special telephone that has a text display. Using a single phone line, the user (typically a person who has the ability to speak and some residual hearing) is allowed to both listen to what is said over the telephone and simultaneously read captions of what the other person is saying. Two-line CTS permits the user to simultaneously listen and read what the other person is saying but also allows deaf and hard-of-hearing customers the ability to access services previously unavailable to them, such as *69, call waiting, and call forwarding. Two-line service also makes it possible for users to access 9-1-1 emergency services directly (in the same way hearing users do) and simultaneously receive captions on the second telephone line. Two-line CTS also allows more than one person to be on a call. The FCC also adopted the allocations methodology proposed by the National Exchange Carrier Association, the administrator of the Interstate TRS Fund, for determining the number of two-line CTS calls that should be compensated from the TRS Fund.
Third, the FCC also reversed last year’s decision to exclude some forms of non-shared language VRS from TRS Fund reimbursement. Acknowledging that Spanish speakers are the fastest growing minority group in the deaf school age population in the United States, the FCC concluded that Spanish-translation VRS (i.e. wherein what is signed in American Sign Language ("ASL") is translated into spoken Spanish, and vice versa) is a form of TRS compensable from the TRS Fund. While allowing TRS Fund compensation from VRS, the FCC did not mandate that providers offer Spanish translation VRS.
Finally, the FCC initiated a rulemaking proceeding to assess how its closed captioning rules are working to ensure that video programming is accessible to deaf and hard-of-hearing Americans. The FCC requested comments on several compliance and quality issues. Specifically, the FCC asked, among other things, whether the FCC should require video programming distributors to file compliance reports, whether the band on counting electronic newsroom technique captioning be extended beyond the top 25 markets, whether there is a need to adopt non-technical standards for accuracy of transcription, whether there should be different standards for pre-produced and live programming, whether technical procedures need updating, and whether the existing complaint procedures should be changed. Comments are due 45 days after publication of the Notice of Proposed Rulemaking in the Federal Register (as of the time this article went to press, the Notice had not been published in the Federal Register).
FCC Implements Treasury Directive on Credit Card Payments
The FCC issued a public notice in late July stating that the U.S. Treasury is rejecting the processing of credit card transactions that exceed $99,999.99. This limit applies to individual transactions, and to transactions on a single card in a single day that exceed this limit in the aggregate. Accordingly, entities that need to remit $100,000.00 or more to the FCC will need to pay by check, wire transfer, or other means.
FCC Initiates Inquiry into International Carrier Practices
In August, the FCC released a notice of inquiry ("NOI") regarding possible modification of the FCC's process to prevent harm to US consumers caused by anticompetitive conduct by foreign carriers. In particular, the FCC is concerned about situations in which foreign carriers might use circuit disruptions or other similar tactics (often called "whipsawing") to force US carriers into settlement rate increases. The NOI cites, in particular, the circuit disruptions caused by certain Philippines carriers two years ago, as well as more recent circuit blocking by carriers in Ecuador, Jamaica and Nicaragua. The FCC is concerned that its current procedures do not permit it to act quickly enough to protect US consumers.
When the FCC removed the international settlements policy from benchmark-compliant routes in 2004, it stated that it would consider circuit disruptions and similar conduct to be potentially anticompetitive and presumptively harmful to US consumers. In the face of such behavior, the FCC noted in 2004 that it could respond on its own motion or in response to complaints or petitions filed by US carriers or other affected parties. These complaints would be considered on a case-by-case basis after being placed on public notice. If the FCC found that whipsawing had occurred, the FCC has the authority to order US carriers to renegotiate, to withhold payment to the foreign carrier, or to bar US carriers from paying a specific rate. The FCC could also reimpose the international settlements policy on the affected route. The current rules also permit the FCC to impose temporary requirements on US carriers with respect to the affected route prior to making any final determination.
In the NOI, the FCC now seeks comment on ways to improve its responsiveness to these complaints. In particular, the FCC seeks comment on the following issues:
What constitutes a circuit disruption or blockage that would warrant FCC action;
The appropriate pleading cycle for such cases;
The procedures for imposition of interim measures when such allegations are made;
The appropriate form of interim relief to be imposed;
Whether US carriers have passed along the benefits of lower settlement rates to US customers;
Whether it is appropriate for a foreign country to use international settlement rates to fund universal service needs in those countries; and
How whipsawing is affecting or harming US consumers.
Comments will be due on the NOI 30 days after it is published in the Federal Register (which typically occurs within a few weeks), and reply comments will be due 50 days after publication in the Federal Register.
D.C. Circuit Court Upholds FCC Rules Authorizing MVDDS Use of the 12 GHz Band and Allowing Auction of Terrestrial MVDDS Licenses
On July 15, 2005, the D.C. Circuit Court denied challenges against the FCC’s decision to allow terrestrial multichannel video distribution and data services ("MVDDS") to share the 12.2-12.7 GHz band with direct broadcast satellite services and to auction MVDDS licenses. The court deferred to the FCC’s interpretation of "harmful interference" and found that the FCC reasonably concluded that MVDDS could share the 12 GHz band without causing harmful interference to DBS services. The court also upheld the FCC rules designed to protect DBS subscribers from harmful interference by MVDDS operations. Additionally, the court rejected arguments that the FCC’s decision to auction MVDDS licenses (1) violates the ORBIT Act’s ban against auctioning "spectrum used for … international or global satellite communications services"; (2) is arbitrary and capricious; and (3) exceeds the FCC’s auctioning authority because there is only one qualified MVDDS applicant under the LOCAL TV Act. The court concluded that none of those arguments precludes the FCC’s auction decision.
FCC Establishes Regulatory Fee Amounts and Payment Deadline
The FCC has announced the window for FCC licensees and regulatees to make their annual regulatory fee payments for the 2005 fiscal year. The window opened August 23 and closes at 11:59 PM on September 7, 2005. Any payments received after the window closes will be assessed a 25 percent late payment penalty. Regulatory fees recover the costs associated with the FCC’s enforcement, policy and rulemaking, user information, and international activities.
The 2005 assessments are expected to collect $280,098,000, which is an approximate $7 million increase from last year. Payments can be made by credit card, check, wire transfer and other means. However, as noted in a separate article, credit card payments are limited to transactions below $100,000.00. Although the 2005 regulatory fees did not significantly change from 2004, there are a few matters worth mentioning:
The FCC has increased this year’s regulatory fees for interstate telecommunications service providers from $0.00218 to $0.00243 per revenue dollar.
The FCC rejected petitions seeking reconsideration of its 2004 decision to use numbering resource utilization forecast ("NRUF") data to estimate the number of wireless handsets for which each carrier must pay regulatory fees. The FCC concluded that the reconciliation process between NRUF data and corrected data provided by carriers demonstrates that the NRUF data is an accurate measure. The FCC also rejected arguments that a new multi-step process implemented last year – consisting of sending an initial regulatory fee assessment letter to wireless carriers that the carriers can then return with correct data before a final assessment letter is sent – was unduly burdensome on providers. The FCC slightly lowered the regulatory fees for commercial mobile radio service providers from $0.25 to $0.22 per handset.
The FCC declined to modify the methodology for assessing regulatory fees on international carriers. A handful of parties had previously argued that the current fee structure, which is based upon the number of active 64 kbps circuits, reflects older, lower capacity systems and that the FCC should base fees on the number of cable landing licenses and international Section 214 authorizations. The FCC concluded that the parties did not provide sufficient information to warrant changing the methodology and that any benefits that might result from changing the methodology did not outweigh the costs of modifying the FCC’s processes. The FCC did lower the fee for international bearer circuits from $2.52 to $1.37 per 64 kbps circuit.
The FCC implemented various changes to its billing system for satellite space stations to correct certain errors that resulted from new fee filing procedures that had been adopted last year.
Philosophical Differences?
During WorldCom’s bankruptcy proceedings, Bankruptcy Judge Jed Rakoff appointed former SEC Chairman Richard Breeden to monitor corporate governance, ethics and executive compensation in the wake of WorldCom’s accounting scandal. Breeden was appointed in July 2002, and during his tenure at WorldCom (now MCI), he helped select a new Board of Directors for MCI and published a report on MCI entitled, "Restoring Trust," in which he exposed WorldCom’s corporate governance failures and set forth 78 principles for improving corporate governance, eliminating cronyism, ensuring an independent board of directors and increasing the relative power of the company’s shareholders and their access to the Board. These principles have been held up as a model for corporate governance, and include such requirements as having an independent board of directors (except for the CEO), separating the positions of Chairman of the board and CEO, a ten-year maximum term for directors and establishing "town hall" meetings in which shareholders may confront the board and offer resolutions for a shareholder vote.
In the bidding war between Qwest Communications and Verizon Communications to acquire MCI, Breeden has monitored MCI the board’s deliberations and negotiations with each suitor to ensure fairness in the process. Breeden has been accused of favoring Verizon’s lower bid, but denies these accusations, saying he tried to be "an honest broker."
Now as Verizon and MCI hammer out the details of their merger agreement, Verizon has added a condition to closing that transaction: Verizon will not be subject to Breeden’s rules of corporate governance. MCI’s shareholders, some of whom are still unhappy about MCI’s rejection of Qwest’s higher bid, would lose some of the rights and board access they enjoyed during Breeden’s tenure. So far, neither Verizon, MCI, nor Breeden have commented on the matter.
Satellite News
XM and WCS Merger
When XM Satellite Radio announced in July that it would acquire WCS Wireless and use WCS’s wireless band to expand XM’s offerings, Sirius Satellite Radio, the National Association of Broadcasters ("NAB"), and the Wireless Communications Assn. ("WCA") filed petitions asking the FCC to deny the acquisition citing, among other things, concerns of interference between the WCS wireless band and the adjoining satellite radio spectrum.
On August 25, 2005, the NAB filed its reply comments with the FCC advocating that the sale of WCS should be denied on the grounds that that WCS, having owned the rights to certain wireless bands for only four months, is "trafficking" the spectrum in violation of FCC rules. In addition, NAB has accused XM of being "too vague" about its planned use of the new spectrum, and has demanded that XM provide additional information to show that the transfer of the WCS licenses is in the public interest. The NAB has been opposed to XM and Sirius Satellite Radio broadcasting local weather and traffic reports, a distinction that previously tied consumers to radio stations for at least those broadcasts. The NAB also has been an active proponent of a House bill that would limit satellite radio companies from airing local content.
WCS has publicly noted that XM and WCS could co-locate their facilities and offer the same combined services without the merger, but that the merger "makes the process more efficient," and therefore is "in the public interest. WCS is a very attractive target to XM because WCS owns wireless spectrum licenses covering 163 million people in 15 of the top 20 U.S. radio markets.
Satellites' Roles in Emergencies
FCC and Network Reliability & Interoperability Council ("NRIC") regulators are reviewing the feasibility of broadcast satellites participating in the Emergency Alert System and E-911 requirements. Current regulations do not require participating by satellite broadcasters and service providers. The FCC has so far met with DirecTV, EchoStar, Dominion Video Satellite, SES Americom, PanAmSat and Intelsat, and the International Bureau Satellite Division and the Emergency Alert System ("EAS") has meetings planned with XM Satellite Radio and Sirius Satellite Radio. The topics of discussion have included the financial and technical burdens of implementing such services, the technical difficulties of broadcasting an emergency alert to a specific market, and the fact that a variety of technologies are used to implement satellite broadcasting, so a one-size-fits-all solution is unlikely to be found.
Deal Watch
Nortel Networks and LG Electronics have formed LG-Nortel Company, a joint telecommunications equipment venture in South Korea, combining LG's telecommunications manufacturing division with Nortel's Korean sales and service operation. Nortel will be paying $145 million in cash for a majority share of the joint venture entity. In addition, LG is entitled to an earnout based on the new entity meeting mutually agreed targets. LG-Nortel Company is expected to generate about $530 million in annual sales.
Teles Wireless Broadband has announced that it plans to offer nationwide satellite broadband service in the United Kingdom, under its newly-formed subsidiary, Teles SkyDSL UK Ltd. The broadband service, SkyDSL, can be received with the same dish used to receive BskyB's satellite television signal, with some modification to the customer’s reception system. SkyDSL’s principal market is households that do not have access to traditional cable broadband services. Teles’s will be offering various levels of the service for prices as low as 4.57 British pounds ($8.20) a month and about 58.90 pounds ($106) for equipment, unless the customer already owns the BskyB dish.
Qualcomm plans to acquire Flarion Technologies, a leading developer of Orthogonal Frequency Division Multiplex Access (OFDMA) technology and the inventor of FLASH-OFDM technology for mobile broadband Internet protocol (IP) services. The purchase price is approximately $600 million in Qualcomm stock and cash. In addition, Flarion is entitled to an earnout of up to $205 million in the form of cash and Qualcomm stock based on meeting mutually agreed targets. The acquisition is expected to be completed later this year, subject to regulatory approval.
Nokia Corp. has been awarded a three-year, $125 million contract to double the digital mobile networks for India's Bharti Tele-Ventures. The increased capacity is primarily to provide mobile communications services to India’s rural areas, where terrestrial telephone coverage is spotty or absent. Last year, Nokia signed a $275 million deal to supply equipment and managed services for Bharti, which is the leading telecommunications provider in India. In addition, Nokia has announced that it will establish a new mobile manufacturing plant in Chennai in southeastern India. The plant is expected to employ up to 2,000 people.
FCC, State Commissions and Courts Continue To Refine and Apply Triennial Review Remand Order
Activity related to the Triennial Review Remand Order ("TRRO") and the FCC’s unbundling rules continued on all fronts over the summer, from the petitions for reconsideration and appeals of the TRRO to state commission implementation of the TRRO and judicial review of such implementation. Various parties filed reply comments at the FCC on June 16 in support of their petitions for reconsideration of the TRRO. Verizon argued, in support of Iowa Telecom’s petition, that the FCC’s focus on fiber-based collocation understates the ability of competitive local exchange carriers ("CLECs") to compete without access to transport unbundled network elements ("UNEs") and failed to account for the availability to CLECs of competitive fiber-based networks. In support of opposing petitions, CLECs such as Cbeyond argued that requirements for DS1 and DS3 high-capacity loops and dedicated transport should be expanded. It was reported on July 15 that the FCC asked for comments on a CLEC petition seeking forbearance from certain rules limiting access to UNEs, including the impairment test for access to DS1 loops serving predominantly residential and small office buildings and eligibility criteria as applied to enhanced extended loops (combinations of unbundled loops and transport, or "EELs").
In a joint brief filed with the U.S. Court of Appeals for the D.C. Circuit on July 26, the Bell companies and USTA (now USTelecom) argued, in support of their appeal of the TRRO, that the FCC did not satisfy the courts’ concerns that its local competition rules required incumbent local exchange carriers ("ILECs") to offer UNEs to competitors not needing access to ILEC UNEs to provide service. The Bells and USTelecom argued that, in spite of three prior reversals, the FCC once again improperly ordered what then-Chairman Powell called "‘wide unbundling’" of high-capacity loops and transport used to serve business customers. They argued, among other points, that the FCC did not adequately weigh competitors’ ability to use special access service as an alternative to UNEs. In support of its opposing appeal of the TRRO, the New Jersey Ratepayer Advocate argued two weeks later that the FCC should not have found that CLECs are not "impaired" in competing with ILECs without access to local switching UNEs in the mass market and that the FCC failed to justify the rate increases it ordered for the existing customer base served by "UNE-P" arrangements (leased combinations of the local loop, local switching and shared transport UNEs).
State commissions were even busier with TRRO-related issues. In June, the Pennsylvania PUC ("Pa PUC") amended performance standards for "hot-cuts" (the conversion of multiple lines from an ILEC to a CLEC) to reflect changes made previously by the New York PSC to its hot-cut standards, which were used as a model for the Pa PUC rules. The Michigan PSC adopted a mediator’s recommendations for resolving hot-cut disputes between SBC and various CLECs. Also in June, the Maine Supreme Court upheld a PUC order requiring Verizon to unbundle copper subloop feeder elements. Verizon had argued that the Telecommunications Act of 1996 ("1996 Act") does not require such unbundling, but the court upheld the PUC order as an exercise of the PUC’s authority under state law. On June 22, it was reported that the Oregon PUC approved a settlement of claims that Qwest had negotiated interconnection agreements with CLECs that it failed to file with the PUC as required under the 1996 Act. Qwest will pay a $1.05 million penalty. Qwest had argued that the nature of the agreements exempted them from filing requirements, but the PUC staff disagreed.
State commissions also addressed the interplay of the unbundling requirements and Section 271 of the Communications Act, which imposes unbundling and other requirements on Bell companies seeking to provide long distance services. On June 28, it was reported that the Maine PUC requested comments on a hearing examiner’s recommendation that Verizon continue to offer line sharing as UNEs at total element long run incremental cost ("TELRIC")-based rates under Section 271. On August 16, it was reported that the Kentucky PSC scheduled hearings to decide if BellSouth’s unbundling obligations under Section 271 require it to provide CLECs with UNEs "delisted" under the TRRO. The case arose from Cinergy Communications’ efforts to retain BellSouth UNE-P arrangements. BellSouth argued that four other state commissions concluded that the TRRO and the prior Triennial Review Order ("TRO") preempt state jurisdiction over UNE-Ps under Section 271.
It was reported on July 20 that the Massachusetts Department of Telecommunications & Energy ("DTE") ordered generic changes to Verizon’s interconnection agreements with most CLECs to implement unbundling rule changes in the TRO and TRRO. The DTE said that no negotiation or amendment of individual agreements is required to implement the FCC rule changes and that Verizon need not continue providing delisted UNEs at cost-based rates except for those affected by the FCC’s transition program for preexisting customers. On August 11, it was reported that SBC and CLECs advised the Michigan PSC that they were able to negotiate agreements on certain disputed points relating to audits and back billing in an ongoing proceeding under the TRRO. The following day, it was reported that the Arkansas PSC approved a settlement involving SBC and ALLTEL loop UNE rates at or below the levels recommended by the PSC staff. It was reported on August 15 that the California PUC ("CPUC") closed its TRO docket but said that continuing implementation disputes over such issues as the elimination of UNE-P, batch hot-cut processes and pricing would be resolved in a separate arbitration proceeding.
Courts continued to refine state commission implementation of the TRO and TRRO. On June 9, the U.S. District Court in Helena, Montana vacated a Montana PSC order requiring Qwest to submit a line sharing agreement with Covad for PSC approval. The court held that the contract is not an interconnection agreement required to be filed under the 1996 Act, and because line sharing is not a required UNE or service under Section 251 of the Communications Act, there is no obligation to file the agreement under Section 252. On July 6, the U.S. Court of Appeals for the Ninth Circuit vacated and remanded a district court ruling dismissing as unripe a Verizon complaint against the CPUC for imposing an interim rate reduction alleged to be arbitrary and capricious. The court held that the 2003 CPUC interim rate order, basing Verizon interim UNE rates on Verizon’s UNE rates in New Jersey, is ripe for review because, if Verizon’s claim were upheld on the merits, it could not be fully compensated by a subsequent true-up when rates are adjusted. Similarly, on July 8, it was reported that the U.S. District Court in Hartford, Connecticut reversed a Connecticut Department of Public Utility Control ("DPUC") order setting interim interconnection and UNE rates in an SBC-MCI agreement that the court held were inconsistent with federal law. MCI had argued that the DPUC improperly adopted rates that had been in place before passage of the 1996 Act and that included historic costs. The court agreed with MCI and ordered the DPUC to use the forward-looking pricing methodology specified in the 1996 Act and FCC rules.
On August 5, it was reported that the U.S. Court of Appeals for the Sixth Circuit upheld a Kentucky PSC ruling that AT&T’s attempt to convert its special access contract with BellSouth to a UNE agreement did not trigger the termination penalties provision of the special access contract. In affirming a lower court decision upholding the PSC’s decision against penalties, the appeals court held that the case involved an interpretation of state contract law and that the PSC’s rationale has been upheld by state courts in other contract disputes. It was reported on August 10 that the U.S. District Court in Philadelphia affirmed a 2004 Pa PUC decision reducing Verizon’s UNE rates, concluding that the rates were consistent with the 1996 Act and the FCC’s TELRIC methodology.
FCC Applies CALEA Requirements to Facilities-Based, Wireline Broadband Services and Interconnected VoIP Services
On August 5, 2005, the FCC adopted an order requiring providers of facilities-based, wireline, broadband Internet access services and interconnected voice over Internet Protocol ("VoIP") services to accommodate law enforcement wiretaps, pursuant to the requirements of the Communications Assistance for Law Enforcement Act ("CALEA"). The FCC found that CALEA broadly defines a "telecommunications carrier" to include a provider of any service that the FCC determines is "a replacement for a substantial portion of the local telephone exchange." The FCC further found that wireline, broadband Internet access and interconnected VoIP services can replace conventional telecommunications services and are therefore subject to CALEA requirements. To allow wireline broadband Internet access and interconnected VoIP providers an opportunity to comply with CALEA requirements, the FCC established an 18-month compliance period commencing upon the effective date of the order. The FCC also adopted a further notice of proposed rulemaking ("FNPRM") seeking comment on whether certain facilities-based broadband Internet access providers, such as small and rural providers, should be exempt from CALEA. The full text of the FCC order and FNPRM has not been released yet.
The Threat of Thousands of VoIP Customers Losing Service Stayed For Thirty Days and Other VOIP Developments
In response to pressure from the industry, Congress, and others, the FCC issued a public notice with "further guidance" in which it agreed to delay until September 28, 2005 enforcement of its requirement that an "interconnected" VoIP provider obtain affirmative acknowledgements from 100 percent of its customers that they have read and understood the provider’s notices regarding any limitations of its emergency 911 ("E911") service. Such acknowledgments were originally due at the end of July, but the FCC has now deferred enforcement twice.
The FCC will not initiate enforcement action only against VoIP providers that had previously filed reports by August 10 regarding their customer notice efforts (pursuant to the FCC’s first public notice deferring enforcement) and that file updated reports on both September 1 and 22. The updated reports also must include information regarding the providers’ discontinuance plans. Specifically, the September reports must include a statement that the provider will use a "soft" or "warm" disconnect solution (i.e., a solution that disallows all non-911 calls or intercepts and sends those calls to the providers customer service department, but still directs 911 calls to the appropriate Public Safety Answering Point) as of September 28, or a detailed explanation of why such a solution is not feasible. VoIP providers that did not meet the August 10 reporting deadline and do not meet the upcoming deadlines will be subject to potential enforcement action.
VoIP providers had expressed concern that they would be unable to obtain responses from all of their customers by the August 30 deadline, requiring many to cut off services to their customers, including customers that may be using the service in place of traditional telephone service. VoIP providers and many others argued that cutting off service would place consumers at a greater risk than not providing them with E911 service. One market analyst estimates that there are approximately 2.5 million VoIP customers in the US. Even if carriers obtain responses from 90 percent of their customers, 250,000 consumers could lose service.
VoIP provider Nuvio has appealed the FCC’s order that requires VoIP providers to comply with E911 obligations to the U.S. Court of Appeals for the District of Columbia. Nuvio’s request for expedited treatment of the case to avoid discontinuance to customers, however, was denied by the court. Several parties also have filed petitions for reconsideration and clarification of the FCC order. The petitions raise questions regarding certain operational aspects of the FCC’s order as well as other aspects of the order.
In addition, the FCC has announced the creation of a task force comprised of representatives from the FCC and the National Association of Regulatory Utility Commissioners to facilitate the timely and effective enforcement of the FCC’s VoIP E911 rules. Working closely with the public safety community, the task force will focus on educating consumers regarding VoIP providers’ E911 obligations and expediting compliance and facilitating enforcement of the FCC’s rules. The pending appeal of the FCC’s Vonage decision preempting states from regulating VoIP services has been transferred from the U.S. Court of Appeals for the Ninth Circuit to the U.S. Court of Appeals for the Eighth Circuit. All appeals of that case are now before the Eighth Circuit. One proposal to revamp the universal service program (see separate article regarding recent universal service developments) suggests that all carriers utilizing the public switched telephone network must contribute to the universal service fund. Under the proposal, the universal service contribution base would be expanded to include VoIP providers.
Upcoming Deadlines for Your Calendar
Note: Although we try to ensure that the dates listed in the PDF document are accurate as of the day this edition goes to press, please be aware that these deadlines are subject to frequent change. If there is a proceeding in which you are particularly interested, we suggest that you confirm the applicable deadline. In addition, although we try to list deadlines and proceedings of general interest, the list in the PDF document does not contain all proceedings in which you may be interested.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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Article by Charles H. Kennedy
Disability Issues Dominate FCC’s July Open Meeting
http://www.mondaq.com/i_article.asp?articleid=34618
Marking the 15th Anniversary of the Americans with Disabilities Act on July 26th, the FCC recently established three new rules that expand its interpretation of "functionally equivalent" access to the nation’s telecommunications system. The FCC also initiated a review of its closed captioning rules by seeking comment about various aspects of closed captioning .
First, the FCC developed speed of answer requirements for Video Relay Service ("VRS"). VRS is a form of telecommunications relay service ("TRS") that enables an individual with a hearing or speech disability to communicate by telephone or other device through the telephone system with a person without such a disability. Instead of relying on TTY or text-based calls, however, VRS allows communications using sign language through a communications assistant ("CA"), who facilitates the call by a video link. The new rules establish mandatory speed of answer requirements for VRS, require VRS to be offered twenty-four hours per day, seven days a week, and permit VRS providers to be compensated for messages they leave for hard-of-hearing persons who are not able to take the call.
The FCC also determined that two-line captioned telephone service ("CTS") is eligible for support from the TRS Fund, to which all interstate carriers contribute. In so doing, the FCC expanded its interpretation of "functional equivalency" for millions of Americans who are hard of hearing. CTS uses a special telephone that has a text display. Using a single phone line, the user (typically a person who has the ability to speak and some residual hearing) is allowed to both listen to what is said over the telephone and simultaneously read captions of what the other person is saying. Two-line CTS permits the user to simultaneously listen and read what the other person is saying but also allows deaf and hard-of-hearing customers the ability to access services previously unavailable to them, such as *69, call waiting, and call forwarding. Two-line service also makes it possible for users to access 9-1-1 emergency services directly (in the same way hearing users do) and simultaneously receive captions on the second telephone line. Two-line CTS also allows more than one person to be on a call. The FCC also adopted the allocations methodology proposed by the National Exchange Carrier Association, the administrator of the Interstate TRS Fund, for determining the number of two-line CTS calls that should be compensated from the TRS Fund.
Third, the FCC also reversed last year’s decision to exclude some forms of non-shared language VRS from TRS Fund reimbursement. Acknowledging that Spanish speakers are the fastest growing minority group in the deaf school age population in the United States, the FCC concluded that Spanish-translation VRS (i.e. wherein what is signed in American Sign Language ("ASL") is translated into spoken Spanish, and vice versa) is a form of TRS compensable from the TRS Fund. While allowing TRS Fund compensation from VRS, the FCC did not mandate that providers offer Spanish translation VRS.
Finally, the FCC initiated a rulemaking proceeding to assess how its closed captioning rules are working to ensure that video programming is accessible to deaf and hard-of-hearing Americans. The FCC requested comments on several compliance and quality issues. Specifically, the FCC asked, among other things, whether the FCC should require video programming distributors to file compliance reports, whether the band on counting electronic newsroom technique captioning be extended beyond the top 25 markets, whether there is a need to adopt non-technical standards for accuracy of transcription, whether there should be different standards for pre-produced and live programming, whether technical procedures need updating, and whether the existing complaint procedures should be changed. Comments are due 45 days after publication of the Notice of Proposed Rulemaking in the Federal Register (as of the time this article went to press, the Notice had not been published in the Federal Register).
FCC Implements Treasury Directive on Credit Card Payments
The FCC issued a public notice in late July stating that the U.S. Treasury is rejecting the processing of credit card transactions that exceed $99,999.99. This limit applies to individual transactions, and to transactions on a single card in a single day that exceed this limit in the aggregate. Accordingly, entities that need to remit $100,000.00 or more to the FCC will need to pay by check, wire transfer, or other means.
FCC Initiates Inquiry into International Carrier Practices
In August, the FCC released a notice of inquiry ("NOI") regarding possible modification of the FCC's process to prevent harm to US consumers caused by anticompetitive conduct by foreign carriers. In particular, the FCC is concerned about situations in which foreign carriers might use circuit disruptions or other similar tactics (often called "whipsawing") to force US carriers into settlement rate increases. The NOI cites, in particular, the circuit disruptions caused by certain Philippines carriers two years ago, as well as more recent circuit blocking by carriers in Ecuador, Jamaica and Nicaragua. The FCC is concerned that its current procedures do not permit it to act quickly enough to protect US consumers.
When the FCC removed the international settlements policy from benchmark-compliant routes in 2004, it stated that it would consider circuit disruptions and similar conduct to be potentially anticompetitive and presumptively harmful to US consumers. In the face of such behavior, the FCC noted in 2004 that it could respond on its own motion or in response to complaints or petitions filed by US carriers or other affected parties. These complaints would be considered on a case-by-case basis after being placed on public notice. If the FCC found that whipsawing had occurred, the FCC has the authority to order US carriers to renegotiate, to withhold payment to the foreign carrier, or to bar US carriers from paying a specific rate. The FCC could also reimpose the international settlements policy on the affected route. The current rules also permit the FCC to impose temporary requirements on US carriers with respect to the affected route prior to making any final determination.
In the NOI, the FCC now seeks comment on ways to improve its responsiveness to these complaints. In particular, the FCC seeks comment on the following issues:
What constitutes a circuit disruption or blockage that would warrant FCC action;
The appropriate pleading cycle for such cases;
The procedures for imposition of interim measures when such allegations are made;
The appropriate form of interim relief to be imposed;
Whether US carriers have passed along the benefits of lower settlement rates to US customers;
Whether it is appropriate for a foreign country to use international settlement rates to fund universal service needs in those countries; and
How whipsawing is affecting or harming US consumers.
Comments will be due on the NOI 30 days after it is published in the Federal Register (which typically occurs within a few weeks), and reply comments will be due 50 days after publication in the Federal Register.
D.C. Circuit Court Upholds FCC Rules Authorizing MVDDS Use of the 12 GHz Band and Allowing Auction of Terrestrial MVDDS Licenses
On July 15, 2005, the D.C. Circuit Court denied challenges against the FCC’s decision to allow terrestrial multichannel video distribution and data services ("MVDDS") to share the 12.2-12.7 GHz band with direct broadcast satellite services and to auction MVDDS licenses. The court deferred to the FCC’s interpretation of "harmful interference" and found that the FCC reasonably concluded that MVDDS could share the 12 GHz band without causing harmful interference to DBS services. The court also upheld the FCC rules designed to protect DBS subscribers from harmful interference by MVDDS operations. Additionally, the court rejected arguments that the FCC’s decision to auction MVDDS licenses (1) violates the ORBIT Act’s ban against auctioning "spectrum used for … international or global satellite communications services"; (2) is arbitrary and capricious; and (3) exceeds the FCC’s auctioning authority because there is only one qualified MVDDS applicant under the LOCAL TV Act. The court concluded that none of those arguments precludes the FCC’s auction decision.
FCC Establishes Regulatory Fee Amounts and Payment Deadline
The FCC has announced the window for FCC licensees and regulatees to make their annual regulatory fee payments for the 2005 fiscal year. The window opened August 23 and closes at 11:59 PM on September 7, 2005. Any payments received after the window closes will be assessed a 25 percent late payment penalty. Regulatory fees recover the costs associated with the FCC’s enforcement, policy and rulemaking, user information, and international activities.
The 2005 assessments are expected to collect $280,098,000, which is an approximate $7 million increase from last year. Payments can be made by credit card, check, wire transfer and other means. However, as noted in a separate article, credit card payments are limited to transactions below $100,000.00. Although the 2005 regulatory fees did not significantly change from 2004, there are a few matters worth mentioning:
The FCC has increased this year’s regulatory fees for interstate telecommunications service providers from $0.00218 to $0.00243 per revenue dollar.
The FCC rejected petitions seeking reconsideration of its 2004 decision to use numbering resource utilization forecast ("NRUF") data to estimate the number of wireless handsets for which each carrier must pay regulatory fees. The FCC concluded that the reconciliation process between NRUF data and corrected data provided by carriers demonstrates that the NRUF data is an accurate measure. The FCC also rejected arguments that a new multi-step process implemented last year – consisting of sending an initial regulatory fee assessment letter to wireless carriers that the carriers can then return with correct data before a final assessment letter is sent – was unduly burdensome on providers. The FCC slightly lowered the regulatory fees for commercial mobile radio service providers from $0.25 to $0.22 per handset.
The FCC declined to modify the methodology for assessing regulatory fees on international carriers. A handful of parties had previously argued that the current fee structure, which is based upon the number of active 64 kbps circuits, reflects older, lower capacity systems and that the FCC should base fees on the number of cable landing licenses and international Section 214 authorizations. The FCC concluded that the parties did not provide sufficient information to warrant changing the methodology and that any benefits that might result from changing the methodology did not outweigh the costs of modifying the FCC’s processes. The FCC did lower the fee for international bearer circuits from $2.52 to $1.37 per 64 kbps circuit.
The FCC implemented various changes to its billing system for satellite space stations to correct certain errors that resulted from new fee filing procedures that had been adopted last year.
Philosophical Differences?
During WorldCom’s bankruptcy proceedings, Bankruptcy Judge Jed Rakoff appointed former SEC Chairman Richard Breeden to monitor corporate governance, ethics and executive compensation in the wake of WorldCom’s accounting scandal. Breeden was appointed in July 2002, and during his tenure at WorldCom (now MCI), he helped select a new Board of Directors for MCI and published a report on MCI entitled, "Restoring Trust," in which he exposed WorldCom’s corporate governance failures and set forth 78 principles for improving corporate governance, eliminating cronyism, ensuring an independent board of directors and increasing the relative power of the company’s shareholders and their access to the Board. These principles have been held up as a model for corporate governance, and include such requirements as having an independent board of directors (except for the CEO), separating the positions of Chairman of the board and CEO, a ten-year maximum term for directors and establishing "town hall" meetings in which shareholders may confront the board and offer resolutions for a shareholder vote.
In the bidding war between Qwest Communications and Verizon Communications to acquire MCI, Breeden has monitored MCI the board’s deliberations and negotiations with each suitor to ensure fairness in the process. Breeden has been accused of favoring Verizon’s lower bid, but denies these accusations, saying he tried to be "an honest broker."
Now as Verizon and MCI hammer out the details of their merger agreement, Verizon has added a condition to closing that transaction: Verizon will not be subject to Breeden’s rules of corporate governance. MCI’s shareholders, some of whom are still unhappy about MCI’s rejection of Qwest’s higher bid, would lose some of the rights and board access they enjoyed during Breeden’s tenure. So far, neither Verizon, MCI, nor Breeden have commented on the matter.
Satellite News
XM and WCS Merger
When XM Satellite Radio announced in July that it would acquire WCS Wireless and use WCS’s wireless band to expand XM’s offerings, Sirius Satellite Radio, the National Association of Broadcasters ("NAB"), and the Wireless Communications Assn. ("WCA") filed petitions asking the FCC to deny the acquisition citing, among other things, concerns of interference between the WCS wireless band and the adjoining satellite radio spectrum.
On August 25, 2005, the NAB filed its reply comments with the FCC advocating that the sale of WCS should be denied on the grounds that that WCS, having owned the rights to certain wireless bands for only four months, is "trafficking" the spectrum in violation of FCC rules. In addition, NAB has accused XM of being "too vague" about its planned use of the new spectrum, and has demanded that XM provide additional information to show that the transfer of the WCS licenses is in the public interest. The NAB has been opposed to XM and Sirius Satellite Radio broadcasting local weather and traffic reports, a distinction that previously tied consumers to radio stations for at least those broadcasts. The NAB also has been an active proponent of a House bill that would limit satellite radio companies from airing local content.
WCS has publicly noted that XM and WCS could co-locate their facilities and offer the same combined services without the merger, but that the merger "makes the process more efficient," and therefore is "in the public interest. WCS is a very attractive target to XM because WCS owns wireless spectrum licenses covering 163 million people in 15 of the top 20 U.S. radio markets.
Satellites' Roles in Emergencies
FCC and Network Reliability & Interoperability Council ("NRIC") regulators are reviewing the feasibility of broadcast satellites participating in the Emergency Alert System and E-911 requirements. Current regulations do not require participating by satellite broadcasters and service providers. The FCC has so far met with DirecTV, EchoStar, Dominion Video Satellite, SES Americom, PanAmSat and Intelsat, and the International Bureau Satellite Division and the Emergency Alert System ("EAS") has meetings planned with XM Satellite Radio and Sirius Satellite Radio. The topics of discussion have included the financial and technical burdens of implementing such services, the technical difficulties of broadcasting an emergency alert to a specific market, and the fact that a variety of technologies are used to implement satellite broadcasting, so a one-size-fits-all solution is unlikely to be found.
Deal Watch
Nortel Networks and LG Electronics have formed LG-Nortel Company, a joint telecommunications equipment venture in South Korea, combining LG's telecommunications manufacturing division with Nortel's Korean sales and service operation. Nortel will be paying $145 million in cash for a majority share of the joint venture entity. In addition, LG is entitled to an earnout based on the new entity meeting mutually agreed targets. LG-Nortel Company is expected to generate about $530 million in annual sales.
Teles Wireless Broadband has announced that it plans to offer nationwide satellite broadband service in the United Kingdom, under its newly-formed subsidiary, Teles SkyDSL UK Ltd. The broadband service, SkyDSL, can be received with the same dish used to receive BskyB's satellite television signal, with some modification to the customer’s reception system. SkyDSL’s principal market is households that do not have access to traditional cable broadband services. Teles’s will be offering various levels of the service for prices as low as 4.57 British pounds ($8.20) a month and about 58.90 pounds ($106) for equipment, unless the customer already owns the BskyB dish.
Qualcomm plans to acquire Flarion Technologies, a leading developer of Orthogonal Frequency Division Multiplex Access (OFDMA) technology and the inventor of FLASH-OFDM technology for mobile broadband Internet protocol (IP) services. The purchase price is approximately $600 million in Qualcomm stock and cash. In addition, Flarion is entitled to an earnout of up to $205 million in the form of cash and Qualcomm stock based on meeting mutually agreed targets. The acquisition is expected to be completed later this year, subject to regulatory approval.
Nokia Corp. has been awarded a three-year, $125 million contract to double the digital mobile networks for India's Bharti Tele-Ventures. The increased capacity is primarily to provide mobile communications services to India’s rural areas, where terrestrial telephone coverage is spotty or absent. Last year, Nokia signed a $275 million deal to supply equipment and managed services for Bharti, which is the leading telecommunications provider in India. In addition, Nokia has announced that it will establish a new mobile manufacturing plant in Chennai in southeastern India. The plant is expected to employ up to 2,000 people.
FCC, State Commissions and Courts Continue To Refine and Apply Triennial Review Remand Order
Activity related to the Triennial Review Remand Order ("TRRO") and the FCC’s unbundling rules continued on all fronts over the summer, from the petitions for reconsideration and appeals of the TRRO to state commission implementation of the TRRO and judicial review of such implementation. Various parties filed reply comments at the FCC on June 16 in support of their petitions for reconsideration of the TRRO. Verizon argued, in support of Iowa Telecom’s petition, that the FCC’s focus on fiber-based collocation understates the ability of competitive local exchange carriers ("CLECs") to compete without access to transport unbundled network elements ("UNEs") and failed to account for the availability to CLECs of competitive fiber-based networks. In support of opposing petitions, CLECs such as Cbeyond argued that requirements for DS1 and DS3 high-capacity loops and dedicated transport should be expanded. It was reported on July 15 that the FCC asked for comments on a CLEC petition seeking forbearance from certain rules limiting access to UNEs, including the impairment test for access to DS1 loops serving predominantly residential and small office buildings and eligibility criteria as applied to enhanced extended loops (combinations of unbundled loops and transport, or "EELs").
In a joint brief filed with the U.S. Court of Appeals for the D.C. Circuit on July 26, the Bell companies and USTA (now USTelecom) argued, in support of their appeal of the TRRO, that the FCC did not satisfy the courts’ concerns that its local competition rules required incumbent local exchange carriers ("ILECs") to offer UNEs to competitors not needing access to ILEC UNEs to provide service. The Bells and USTelecom argued that, in spite of three prior reversals, the FCC once again improperly ordered what then-Chairman Powell called "‘wide unbundling’" of high-capacity loops and transport used to serve business customers. They argued, among other points, that the FCC did not adequately weigh competitors’ ability to use special access service as an alternative to UNEs. In support of its opposing appeal of the TRRO, the New Jersey Ratepayer Advocate argued two weeks later that the FCC should not have found that CLECs are not "impaired" in competing with ILECs without access to local switching UNEs in the mass market and that the FCC failed to justify the rate increases it ordered for the existing customer base served by "UNE-P" arrangements (leased combinations of the local loop, local switching and shared transport UNEs).
State commissions were even busier with TRRO-related issues. In June, the Pennsylvania PUC ("Pa PUC") amended performance standards for "hot-cuts" (the conversion of multiple lines from an ILEC to a CLEC) to reflect changes made previously by the New York PSC to its hot-cut standards, which were used as a model for the Pa PUC rules. The Michigan PSC adopted a mediator’s recommendations for resolving hot-cut disputes between SBC and various CLECs. Also in June, the Maine Supreme Court upheld a PUC order requiring Verizon to unbundle copper subloop feeder elements. Verizon had argued that the Telecommunications Act of 1996 ("1996 Act") does not require such unbundling, but the court upheld the PUC order as an exercise of the PUC’s authority under state law. On June 22, it was reported that the Oregon PUC approved a settlement of claims that Qwest had negotiated interconnection agreements with CLECs that it failed to file with the PUC as required under the 1996 Act. Qwest will pay a $1.05 million penalty. Qwest had argued that the nature of the agreements exempted them from filing requirements, but the PUC staff disagreed.
State commissions also addressed the interplay of the unbundling requirements and Section 271 of the Communications Act, which imposes unbundling and other requirements on Bell companies seeking to provide long distance services. On June 28, it was reported that the Maine PUC requested comments on a hearing examiner’s recommendation that Verizon continue to offer line sharing as UNEs at total element long run incremental cost ("TELRIC")-based rates under Section 271. On August 16, it was reported that the Kentucky PSC scheduled hearings to decide if BellSouth’s unbundling obligations under Section 271 require it to provide CLECs with UNEs "delisted" under the TRRO. The case arose from Cinergy Communications’ efforts to retain BellSouth UNE-P arrangements. BellSouth argued that four other state commissions concluded that the TRRO and the prior Triennial Review Order ("TRO") preempt state jurisdiction over UNE-Ps under Section 271.
It was reported on July 20 that the Massachusetts Department of Telecommunications & Energy ("DTE") ordered generic changes to Verizon’s interconnection agreements with most CLECs to implement unbundling rule changes in the TRO and TRRO. The DTE said that no negotiation or amendment of individual agreements is required to implement the FCC rule changes and that Verizon need not continue providing delisted UNEs at cost-based rates except for those affected by the FCC’s transition program for preexisting customers. On August 11, it was reported that SBC and CLECs advised the Michigan PSC that they were able to negotiate agreements on certain disputed points relating to audits and back billing in an ongoing proceeding under the TRRO. The following day, it was reported that the Arkansas PSC approved a settlement involving SBC and ALLTEL loop UNE rates at or below the levels recommended by the PSC staff. It was reported on August 15 that the California PUC ("CPUC") closed its TRO docket but said that continuing implementation disputes over such issues as the elimination of UNE-P, batch hot-cut processes and pricing would be resolved in a separate arbitration proceeding.
Courts continued to refine state commission implementation of the TRO and TRRO. On June 9, the U.S. District Court in Helena, Montana vacated a Montana PSC order requiring Qwest to submit a line sharing agreement with Covad for PSC approval. The court held that the contract is not an interconnection agreement required to be filed under the 1996 Act, and because line sharing is not a required UNE or service under Section 251 of the Communications Act, there is no obligation to file the agreement under Section 252. On July 6, the U.S. Court of Appeals for the Ninth Circuit vacated and remanded a district court ruling dismissing as unripe a Verizon complaint against the CPUC for imposing an interim rate reduction alleged to be arbitrary and capricious. The court held that the 2003 CPUC interim rate order, basing Verizon interim UNE rates on Verizon’s UNE rates in New Jersey, is ripe for review because, if Verizon’s claim were upheld on the merits, it could not be fully compensated by a subsequent true-up when rates are adjusted. Similarly, on July 8, it was reported that the U.S. District Court in Hartford, Connecticut reversed a Connecticut Department of Public Utility Control ("DPUC") order setting interim interconnection and UNE rates in an SBC-MCI agreement that the court held were inconsistent with federal law. MCI had argued that the DPUC improperly adopted rates that had been in place before passage of the 1996 Act and that included historic costs. The court agreed with MCI and ordered the DPUC to use the forward-looking pricing methodology specified in the 1996 Act and FCC rules.
On August 5, it was reported that the U.S. Court of Appeals for the Sixth Circuit upheld a Kentucky PSC ruling that AT&T’s attempt to convert its special access contract with BellSouth to a UNE agreement did not trigger the termination penalties provision of the special access contract. In affirming a lower court decision upholding the PSC’s decision against penalties, the appeals court held that the case involved an interpretation of state contract law and that the PSC’s rationale has been upheld by state courts in other contract disputes. It was reported on August 10 that the U.S. District Court in Philadelphia affirmed a 2004 Pa PUC decision reducing Verizon’s UNE rates, concluding that the rates were consistent with the 1996 Act and the FCC’s TELRIC methodology.
FCC Applies CALEA Requirements to Facilities-Based, Wireline Broadband Services and Interconnected VoIP Services
On August 5, 2005, the FCC adopted an order requiring providers of facilities-based, wireline, broadband Internet access services and interconnected voice over Internet Protocol ("VoIP") services to accommodate law enforcement wiretaps, pursuant to the requirements of the Communications Assistance for Law Enforcement Act ("CALEA"). The FCC found that CALEA broadly defines a "telecommunications carrier" to include a provider of any service that the FCC determines is "a replacement for a substantial portion of the local telephone exchange." The FCC further found that wireline, broadband Internet access and interconnected VoIP services can replace conventional telecommunications services and are therefore subject to CALEA requirements. To allow wireline broadband Internet access and interconnected VoIP providers an opportunity to comply with CALEA requirements, the FCC established an 18-month compliance period commencing upon the effective date of the order. The FCC also adopted a further notice of proposed rulemaking ("FNPRM") seeking comment on whether certain facilities-based broadband Internet access providers, such as small and rural providers, should be exempt from CALEA. The full text of the FCC order and FNPRM has not been released yet.
The Threat of Thousands of VoIP Customers Losing Service Stayed For Thirty Days and Other VOIP Developments
In response to pressure from the industry, Congress, and others, the FCC issued a public notice with "further guidance" in which it agreed to delay until September 28, 2005 enforcement of its requirement that an "interconnected" VoIP provider obtain affirmative acknowledgements from 100 percent of its customers that they have read and understood the provider’s notices regarding any limitations of its emergency 911 ("E911") service. Such acknowledgments were originally due at the end of July, but the FCC has now deferred enforcement twice.
The FCC will not initiate enforcement action only against VoIP providers that had previously filed reports by August 10 regarding their customer notice efforts (pursuant to the FCC’s first public notice deferring enforcement) and that file updated reports on both September 1 and 22. The updated reports also must include information regarding the providers’ discontinuance plans. Specifically, the September reports must include a statement that the provider will use a "soft" or "warm" disconnect solution (i.e., a solution that disallows all non-911 calls or intercepts and sends those calls to the providers customer service department, but still directs 911 calls to the appropriate Public Safety Answering Point) as of September 28, or a detailed explanation of why such a solution is not feasible. VoIP providers that did not meet the August 10 reporting deadline and do not meet the upcoming deadlines will be subject to potential enforcement action.
VoIP providers had expressed concern that they would be unable to obtain responses from all of their customers by the August 30 deadline, requiring many to cut off services to their customers, including customers that may be using the service in place of traditional telephone service. VoIP providers and many others argued that cutting off service would place consumers at a greater risk than not providing them with E911 service. One market analyst estimates that there are approximately 2.5 million VoIP customers in the US. Even if carriers obtain responses from 90 percent of their customers, 250,000 consumers could lose service.
VoIP provider Nuvio has appealed the FCC’s order that requires VoIP providers to comply with E911 obligations to the U.S. Court of Appeals for the District of Columbia. Nuvio’s request for expedited treatment of the case to avoid discontinuance to customers, however, was denied by the court. Several parties also have filed petitions for reconsideration and clarification of the FCC order. The petitions raise questions regarding certain operational aspects of the FCC’s order as well as other aspects of the order.
In addition, the FCC has announced the creation of a task force comprised of representatives from the FCC and the National Association of Regulatory Utility Commissioners to facilitate the timely and effective enforcement of the FCC’s VoIP E911 rules. Working closely with the public safety community, the task force will focus on educating consumers regarding VoIP providers’ E911 obligations and expediting compliance and facilitating enforcement of the FCC’s rules. The pending appeal of the FCC’s Vonage decision preempting states from regulating VoIP services has been transferred from the U.S. Court of Appeals for the Ninth Circuit to the U.S. Court of Appeals for the Eighth Circuit. All appeals of that case are now before the Eighth Circuit. One proposal to revamp the universal service program (see separate article regarding recent universal service developments) suggests that all carriers utilizing the public switched telephone network must contribute to the universal service fund. Under the proposal, the universal service contribution base would be expanded to include VoIP providers.
Upcoming Deadlines for Your Calendar
Note: Although we try to ensure that the dates listed in the PDF document are accurate as of the day this edition goes to press, please be aware that these deadlines are subject to frequent change. If there is a proceeding in which you are particularly interested, we suggest that you confirm the applicable deadline. In addition, although we try to list deadlines and proceedings of general interest, the list in the PDF document does not contain all proceedings in which you may be interested.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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