Articles Posted in Telecommunications

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • Broadcaster Loses Appeal of $20,000 FCC Fine
  • FCC Issues Citation for Violations of Radio Frequency Equipment Authorization and Labeling Rules
  • FCC Proposes $392,930 Fine to Telecom Provider for Excessive USF Fees, Unauthorized Transfers, and Delinquent Regulatory Fees

Ninth Circuit Upholds $20,000 Fine Against FM Broadcaster for Unauthorized Operation

The U.S. Court of Appeals for the Ninth Circuit upheld a $20,000 FCC fine against a New Mexico FM broadcaster for operating outside the parameters of the broadcaster’s construction permit.

Section 301 of the Communications Act bans the unlicensed transmission of “energy or communications or signals by radio.” Section 503 of the Act authorizes monetary fines where the FCC finds “willful[] or repeated[]” failure to comply “with the terms and conditions of any license, permit, certificate, or other instrument or authorization” issued by the FCC.

In November 2009, the FCC issued a $20,000 fine to the broadcaster for operating at variance from the broadcaster’s construction permit. Specifically, the FCC found that the station was broadcasting without authorization, and was being operated at a facility 34 miles from its authorized location.

When the broadcaster failed to pay the $20,000 fine, the FCC referred the matter for collections to the Department of Justice (“DOJ”), which, in turn, sued the broadcaster in Nevada District Court to recover the $20,000. The District Court granted the DOJ’s motion for summary judgment, and in doing so upheld the fine against the broadcaster. The broadcaster, representing himself in court, subsequently appealed the District Court’s ruling to the Ninth Circuit.

The Ninth Circuit affirmed the District Court’s ruling, stating that the DOJ provided “substantial” evidence that, for more than a year, the broadcaster “willfully and repeatedly” transmitted radio signals from a different location and at different technical parameters than those specified in the broadcaster’s construction permit. In contrast, the court explained, “taking his submissions in the most generous light, [the broadcaster has] not shown a genuine issue of material fact for trial.” The broadcaster failed to contradict any of the facts underlying the alleged unauthorized operation: (1) because his construction permit required FCC approval before commencing program testing—which the FCC never granted—the transmissions were not valid under the FCC’s Rules; and (2) because the broadcaster transmitted at variance from the terms of the permit, he was not conducting valid equipment tests, which only allow transmission to assure compliance with the permit’s terms. In reviewing the amount of the fine, the Ninth Circuit found the FCC’s decision to impose the full $10,000 base fine for each of the two instances of unauthorized operation “reasonable and not an abuse of discretion.”

Going, Going, but Not Gone: FCC’s Parting Gift to Company Winding Down Business Is Citation for Equipment Authorization and Labeling Violations

The FCC’s Enforcement Bureau issued a citation to a company for marketing radio frequency (“RF”) transmitters that were not properly certified or labeled.

Section 302 of the Communications Act prohibits the manufacture, import, sale, or shipment of home electronic equipment and devices that fail to comply with the FCC’s regulations. Section 2.803 of the FCC’s Rules provides that a device subject to FCC certification must be properly authorized, identified, and labeled in accordance with Section 2.925 of the Rules before it can be marketed to consumers. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • Broadcaster Agrees to Pay $100,000 Fine for Filing Applications Under False Names
  • FCC Proposes $13,000 Fine for Late License Renewal Application and Unauthorized Operation
  • Failure to Register with the FCC Results in $100,000 Fine for Telecom Provider

Catch Me If You Can: Broadcaster Settles Long-Running Investigation into the Use of Pseudonyms in FCC Applications

The FCC entered into a Consent Decree with a radio broadcaster to resolve an investigation into whether the broadcaster filed numerous applications using fake names and refused to cooperate with FCC investigations.

Section 1.17 of the FCC’s Rules requires that written and oral statements to the FCC be truthful and accurate. Section 1.65 of the Rules requires applicants to amend applications as needed for continuing accuracy and completeness. In addition, Section 73.1015 requires applicants to respond to FCC inquiries regarding broadcast applications.

The Consent Decree explains that, since 1982, there has been a “cloud of unanswered questions” about whether applications filed by the broadcaster were accurate. In 1993, the FCC sent the broadcaster a letter inquiring into: (1) his role in certain entities; (2) apparent misrepresentations he made to the FCC; (3) his prior failure to respond to certain site availability allegations; and (4) the operation of several FM translators. The broadcaster never responded to the letter, and since that time, the broadcaster’s real name has not appeared in any FCC application as a principal of any applicant. Instead, the broadcaster used pseudonyms, as well as the names of his wife, mother, and grandmother.

In addition, the Consent Decree states that a 1997 complaint filed by another broadcaster was never answered or disclosed by the broadcaster. The complaint alleged that the broadcaster was the real party in interest behind a certain licensee, and that the broadcaster had violated several other FCC Rules.

Under the terms of the Consent Decree, the broadcaster admitted to being the real party in interest on numerous applications for which he had used pseudonyms, and admitted to several other violations of FCC Rules. The broadcaster agreed to (1) pay a $100,000 fine; (2) the cancellation of licenses for an AM station and two low power FM stations; and (3) the dismissal of petitions for reconsideration involving two dismissed FM applications. In return, the FCC agreed to grant the license renewal applications for another AM station and seven FM translator stations, each with a shortened license term of one year so that the FCC can closely monitor the licensee’s operation of the stations in the future.

FCC Proposes $13,000 Fine for Unauthorized Operation Caused by Late License Renewal Application

The FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against an Ohio FM licensee for failing to timely file its license renewal application and for continuing to operate the station after its license had expired. The FCC proposed a fine for the violations and simultaneously issued a Memorandum Opinion and Order regarding the licensee’s license renewal application.

Section 301 of the Communications Act provides that “[n]o person shall use or operate any apparatus for the transmission of energy or communications or signals by radio . . . except under and in accordance with this [Act] and with a license in that behalf granted under the provisions of [the Act].” Section 73.3539(a) of the FCC’s Rules requires that broadcast licensees file applications to renew their licenses “not later than the first day of the fourth full calendar month prior to the expiration date of the license sought to be renewed.”

In this case, the station’s license expired on October 1, 2004, rendering the license renewal application due by June 1, 2004. The licensee, however, did not file the renewal application until July 30, 2004. The FCC dismissed the application due to the licensee’s “red light” status for owing a debt to the FCC. Red light status prevents the FCC from providing any government benefit to a licensee, including license renewal. The licensee did not seek reconsideration of the dismissal and, as a result, the station’s license expired on October 1, 2004.

In January 2011, the FCC staff was told that the station was off the air. On January 12, 2011, the FCC wrote a letter to the former licensee inquiring into the operating status of the station, and requested a response within 30 days. The station did not respond until March 25, 2011, and stated that it was on-air as of the date of the FCC letter. However, the station explained that it had in fact suspended operations on February 23, 2011, after its transmitter was damaged during the theft of its copper feed lines.

In May 2011, the licensee filed a request for Special Temporary Authority (“STA”) to resume operations, stating that its transmitter repair was almost complete. The licensee also noted that it was unaware its 2004 license renewal application had been dismissed, and that it would file another license renewal application “once it [could].” The licensee submitted a license renewal application in July 2011, and the FCC subsequently granted the station’s STA request through March 2012.

In February 2012, the licensee filed another STA request to operate with reduced facilities, stating that the damage to the transmitter was far worse than previously thought, and would cost more than the value of the station to repair. The licensee also stated that the landlord of its transmitter site had declined to renew the station’s lease, but it had found an alternative, temporary location from which it could operate the station. The FCC granted the STA, and set an expiration date of August 2012. The licensee continued to operate under the STA facilities even after the August 2012 expiration date. The licensee did not file a request to extend the STA until February 2013. That request was granted as a new STA in March 2013, and the licensee has operated under a series of extensions to that STA ever since.

Based on the facts of this case, the FCC proposed the full base fine amount of $3,000 for failure to file a required form, and the full base fine amount of $10,000 for unauthorized operations. The FCC explained that while it typically assesses fines of $7,000 for unauthorized operations, the length of the first unauthorized period in this case—over six years—followed by a second unauthorized period, warranted a $10,000 fine.

The FCC stated that it would grant the station’s license renewal application upon the conclusion of the forfeiture proceeding “if there are no issues other than the apparent violation that would preclude grant of the applications.”

FCC Fines Prepaid Calling Card Company $100,000 for Failing to Register as Service Provider

The FCC fined a New Jersey provider of international prepaid calling card services $100,000 for failing to register as a telecommunications service provider and adhere to all registration requirements.

Section 64.1195(a) of the FCC’s Rules requires that companies providing interstate telecommunications services file an FCC Form 499-A, also known as the Annual Telecommunications Reporting Worksheet, with the Universal Service Administrative Company prior to providing service. The Form 499-A instructions state that “[w]ith very limited exceptions, all intrastate, interstate, and international providers of telecommunications in the United States must file this Worksheet.”

According to the FCC, compliance with the registration requirement is critical to determining a provider’s payment obligations to the Universal Service Fund, Telecommunications Relay Service Fund, and numbering support mechanisms. The FCC further stated that registration is a way to recover costs, and is a central repository for important details about providers.

Calling it a “dereliction of its responsibilities,” the FCC determined that the provider willfully operated for years without filing a Form 499-A, giving the provider an unfair economic advantage over its competitors. The FCC stated that the misconduct started when the provider began providing service in 1997 and continues until the provider files its initial Form 499-A. The FCC proposed a $100,000 fine for the provider’s transgressions.

In addition to the fine, the FCC instructed the provider to immediately register as a telecommunications provider, and to come into full compliance with all of its federal regulatory obligations. The FCC also warned that the fine was “a very limited action that does not reflect the full extent of [the service provider’s] potential forfeiture liability and that does not in any way preclude the Commission from imposing additional forfeitures … in the future.”

A PDF version of this article can be found at FCC Enforcement Monitor November 2016.

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As he rushes to accomplish his list of objectives before the change in administrations, FCC Chairman Tom Wheeler was able to cross one off that list last week. For the first time, the FCC imposed privacy requirements on providers of broadband internet access services (BIAS). The much-anticipated Order requires BIAS providers to notify customers about the types of information the BIAS providers collect about their customers; how and for what purposes the BIAS provider uses and shares this information; and in some circumstances requires customer consent for the use and sharing of this information. This order was an outgrowth of the FCC’s 2015 Open Internet Order, which reclassified BIAS as a telecommunications service and wrested privacy jurisdiction from the Federal Trade Commission.

Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • FCC Revokes Company’s Authorizations for Failure to Pay Regulatory Fees
  • Failure to Disclose Felonies in License Applications Yields $175,000 Fine
  • Cable Operator Settles Investigation into Unlawful Billing for $2.3 Million

Pay Up or Shut Down: Failure to Pay Regulatory Fees Leads to License Revocation 

In a rare move, the FCC revoked the domestic and international 214 authorizations of a Florida telecommunications company to provide facilities-based and international telecommunications services.

Section 9 of the Communications Act directs the FCC “to assess and collect regulatory fees” to recover costs of certain FCC regulatory activities. When a required payment is not made or is late, the FCC will assess a monetary penalty. Further, Section 9(c)(3) of the Act and Section 1.1164(f) of the FCC’s Rules permits the FCC to revoke authorizations for failure to make timely regulatory fee payments. Under Section 1.1917 of the Rules, a non-tax debt owed to the FCC that is 120 days delinquent is transferred to the Secretary of the Treasury for collection.

In December 2008, the company was authorized to provide facilities-based and resold international telecommunications services. In October 2014, the FCC sent the company a Demand Letter notifying the company of delinquent regulatory fees for fiscal year 2014 and demanding payment. The company failed to respond to the Letter and, as required by Section 1.1917 of the Rules, the FCC transferred the FY 2014 debt to the Secretary of the Treasury. As of July 1, 2016, the company had unpaid regulatory fees of $711.40 for FY 2014, and $3,025.34 for FY 2012. According to the FCC, the company does not appear to have any current customers.

In July 2016, the FCC issued an Order to Pay or Show Cause, instructing the company to demonstrate within 60 days that it paid the regulatory fees and penalties in full, or show why the payment was inapplicable or should be waived or deferred. The Order also explained that failure to comply could result in revocation of the company’s international and domestic authorizations. The company neither responded to the Order nor made any payments.

Citing the company’s failure to either pay its regulatory fees or show cause to remove, waive, or defer the fees, the FCC revoked the company’s international and domestic authorizations. The Revocation Order explicitly stated that such revocation did not relieve the company of its obligation to pay the delinquent fees or “any other financial obligation that has or may become due resulting from the authorizations held until revocation.”

Companies Settle Investigation Into Subsidiaries’ Failure to Disclose Felony Convictions in Wireless Applications With $175,000 Fine

Two engineering corporations, on behalf of themselves and their subsidiaries, entered into a Consent Decree with the FCC to end an investigation into the subsidiaries’ failure to disclose two corporate felony convictions in several wireless license applications. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • Spoofed Calls Lead to Multiple $25,000 Fines and Ongoing Criminal Case
  • Amateur Radio Licensee Fined $25,000 for Intentional Interference
  • Failure to Timely Request STA Results in $5,000 Fine and Shortened License Term

Spoofing’s No Joke: Two Men Face $25,000 Fine Each for Harassing Phone Call Scheme

The FCC proposed to fine two New York men for apparently using false caller ID numbers – a practice commonly known as “spoofing” – to place harassing phone calls to the ex-wife of one of the men.

The Truth in Caller ID Act of 2009, as codified in Section 227(e) of the Communications Act and Section 64.1604 of the FCC’s Rules, prohibits any person, in connection with any telecommunications service or IP-enabled voice service, to knowingly cause, directly or indirectly, any caller ID service to transmit or display misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.

In September 2015, the National Network to End Domestic Violence contacted the FCC on behalf of one of their clients and explained that someone was using spoofing services to stalk and harass her. The FCC subsequently opened an investigation into the matter.

Using information and call logs provided by the woman, the investigation found that between May 2015 and September 2015, 31 harassing phone calls were made. It found that the callers used a spoofing service provider to make the woman believe she was answering calls from sources such as local jails and prisons, the school district where her child attends school, and her parents’ home. In addition, it found that the callers used a voice modulation feature of the spoofing service to disguise their voices, and conveyed threatening and bizarre messages. For example, calls that spoofed the caller ID information of Sing Sing correctional facility threatened “we are waiting for you.” Other calls referenced personal information specific to the woman and her minor child.

FCC staff subpoenaed call records for the cell phone of a friend of the woman’s ex-husband after the woman told staff that she believed her ex-husband – against whom she had a restraining order during the time period in question – and his close friend were behind the calls. The woman explained to FCC staff that for some of the calls she had used a third-party “unmasking” service to reveal that the true caller ID was that of her ex-husband’s friend, with whom she had no independent relationship. The call records showed that each time the friend called the spoofing service, the woman received a spoofed call. The parent company of the spoofing service confirmed that the friend used its service to make spoofed calls to the woman.

The FCC also found that the ex-husband was directly involved in at least some of the calls. For example, the FCC found that the friend made a spoofed call moments after he was called by the ex-husband, and while he was still on the phone with the ex-husband. The FCC explained that the fact that the ex-husband “did not dial the spoofed calls himself does not absolve him of liability for the harassment and stalking of his ex-wife.”

The Communications Act and the FCC’s Rules authorize a fine of up to $10,000 for each spoofing violation, or three times that amount for each day of a continuing violation, up to a statutory maximum of $1,025,000. The FCC may adjust a fine upward or downward depending on the circumstances of the violation. Citing the “egregious” nature of the violation, the FCC proposed to fine the ex-husband and the friend $25,000 each. The friend was also arrested and charged with stalking and aggravated harassment after the woman filed a complaint with local police.

Haters Gonna Hate: Amateur Radio Licensee Fined $25,000 for Racial Slur-Filled Interference

A California amateur radio licensee received a $25,000 fine from the FCC for intentionally interfering with the transmissions of other amateurs radio operators and transmitting prohibited communications, including music.

Section 333 of the Communications Act states that “[n]o person shall willfully or maliciously interfere with or cause interference to any radio communications of any stations licensed or authorized by or under the Act or operated by the United States Government.” Similarly, Section 97.101(d) of the FCC’s Rules states that “[n]o amateur operator shall willfully or maliciously interfere with or cause interference to any radio communication or signal.” In addition, Section 97.113(a)(4) of the Rules states that “[n]o amateur station shall transmit . . . [m]usic using a phone emission except as specifically provided elsewhere in this section.”

After receiving multiple complaints of interference, primarily from the Western Amateur Radio Friendship Association (“WARFA”), FCC field agents, with assistance from the FCC’s High Frequency Direction Finding (“HFDF”) Center, conducted investigations to find the source of the interference. On August 25 and 27, 2015, between 7:45 p.m. and 9:45 p.m., the agents observed at least 12 instances of the licensee intentionally transmitting on top of, and interrupting, WARFA amateurs. The interruptions lasted from 30 seconds to at least 4 minutes, and included noises, recordings, music, and talking over WARFA users. The transmissions included racial, ethnic, and sexual slurs. The licensee ended his transmissions each night when WARFA members ended their transmissions.

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Headlines:

  • FCC Enforcement Bureau and Long-Distance Provider Agree to $100,000 Settlement for Violations of FCC’s Rural Call Completion Rules
  • FCC Cancels $3,000 Fine Against TV Licensee for Untimely Kidvid Filings, Upholds $10,000 Fine for Missing Issues/Programs Lists
  • FM Construction Permit Auction Winner Fined $3,000 For Late Application

Dropped Call of the Wild: Investigation of Rural Call Problems Ends With $100,000 Consent Decree

The FCC’s Enforcement Bureau entered into a Consent Decree with a Utah-based long distance carrier to resolve an investigation into whether the carrier failed to sufficiently respond to a rural customer’s complaints of poor call quality and failed to cooperate with the FCC’s resulting investigation.

The FCC has adopted several “Rural Call Completion Rules” in recent years to address poor call quality and call completion problems in rural and other high-cost areas. The Commission clarified in a 2012 declaratory ruling that a carrier violates Section 201 of the Communications Act of 1934 when it knows or should know that calls are not being completed to certain areas and fails to correct the problem or fails to ensure that its intermediate providers correct the problem.

The FCC has also determined that practices that allow lower quality service to rural or traditionally high-cost areas to persist constitute unjust or unreasonable discrimination (based on locality) in violation of Section 202 of the Communications Act. Further, the FCC has interpreted Section 208 of the Act and Section 1.717 of the Commission’s Rules to require that a carrier satisfy (or adequately explain why it cannot satisfy) any informal rural call completion complaints.

In December 2014, a consumer filed an informal complaint with the FCC detailing ongoing problems with receiving work calls. The calls were sent over the carrier’s long distance network to the consumer’s home office, which is served by an intermediate rural local exchange carrier. The carrier investigated the matter and explained in its response to the informal complaint that (1) the consumer had not responded to a follow-up email about the complaint, and (2) the consumer was not its customer.

The carrier took action in March 2015—after the FCC reminded the carrier of its obligations to address rural call quality problems—but the problem recurred. The consumer subsequently filed additional complaints alleging continued call problems in May and June of 2015. Finding that the carrier failed to sufficiently address and resolve the call quality problems with its intermediate provider until late July 2015, the FCC issued a Letter of Inquiry to the carrier and opened an investigation.

To settle the matter, the carrier entered into a Consent Decree with the FCC, wherein the carrier: (1) admitted that it failed to ensure call quality from its intermediate providers and that it did not cooperate with the FCC’s investigation; (2) agreed to pay a $100,000 civil penalty; and (3) agreed to implement a compliance plan going forward. As part of the plan, the carrier must establish operating procedures and training on the Rural Call Completion Rules, and file regular compliance reports with the FCC during the three-year compliance period.

Island Jam: Guam TV Station Successfully Appeals Proposed Fine for Late Kidvid Reports, But Remains on the Hook for Issues/Programs List Violations

The FCC’s Media Bureau cancelled a proposed $3,000 fine against a Guam TV licensee for failing to timely file five Children’s Television Programming Reports, but upheld a $10,000 fine against the licensee for failing to place fifteen Quarterly Issues/Programs Lists in the station’s public inspection file. The FCC also admonished the licensee for its failure to upload copies of its Quarterly Issues/Programs Lists that were in the station’s local file prior to August 2, 2012.

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In a long-anticipated move towards commencement of the spectrum auction, the FCC today released a Public Notice and related Appendix providing an initial clearing target of 126 Megahertz of spectrum in what is currently the broadcast television band. The 126 MHz figure represents the targeted amount of spectrum to be repurposed from broadcast television to mobile wireless uses.  The FCC also announced that bidding in the reverse auction will commence on May 31, 2016.

The 126 MHz target is the highest the FCC was contemplating, and indicates that a large number of television stations have chosen to participate in the auction.  By setting a high clearing target, the FCC is maximizing the amount of broadcast spectrum purchased, but increasing the risk that if there is insufficient interest in the forward auction for this amount of spectrum (at the prices the FCC needs to pay selling broadcasters and cover other costs), the auction may have to be redone with a lower clearing target.

In the forward auction, the FCC will offer 10 paired blocks of spectrum, each block comprised of 10 MHz, to mobile wireless bidders.  The remaining 26 MHz of spectrum to be cleared will be used for guard band and duplex gap purposes; i.e., to protect adjacent users from interference.  If the auction is completed with the 126 MHz clearing target, the post-auction television broadcast band will consist of VHF channels 2-13 and UHF channels 14-29.  The process of repacking stations into channels 2-29 would commence following completion of the auction, and is estimated by the FCC to take approximately three years, although many have questioned whether that is sufficient time for the repack.

With the release of the clearing target information, the FCC has locked in all of the following dates for auction-related events:

May 4, 2016, noon:  Date by which each television broadcast licensee that made an initial commitment in the reverse auction must receive a third confidential status letter from the FCC.  That letter will inform the applicant whether its station(s) will be qualified to participate in the reverse auction.  Applicants who have not received this letter by noon (Eastern Time) on May 4 should contact the FCC Auctions Hotline at (717)338-2868.

May 5, 2016: FCC Incentive Auction Reverse Auction Bidding System User Guide available on Auctions webpage.

May 18, 2016:  Online Bidding Tutorial available on Auctions webpage.

May 23, 2016, 10 a.m.:  Bidding Preview Period begins.

May 24, 2016, 10 a.m.:  Clock Phase Workshop.

May 24, 2016, 6 p.m.:  Bidding Review Period ends.

May 25, 2016, 10 a.m.:  Mock Auction Bidding Round 1.  Additional Mock Auction Rounds occur throughout May 25 and May 26.

May 31, 2016:  Bidding in the reverse auction commences for qualified applicants, with a single round of bidding on May 31 and June 1, and two rounds per day starting on June 2.

While it is unclear how many rounds of bidding will be required before the auction closes, or whether the 126 MHz target might lead to a repeat of the reverse auction, today’s news brings a palpable sense that the auction has really begun.  How successful the auction will be for broadcasters, mobile wireless companies, and the FCC will be a developing story.  Stay tuned for more updates.

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In a recently issued Notice of Proposed Rulemaking, the FCC asked for comments on proposed rules that would apply the traditional privacy requirements of the Communications Act to providers of broadband Internet access services. This proceeding is an outgrowth of the FCC’s decision last year in the Open Internet Order to reclassify broadband as a telecommunications service, subject to certain requirements under Title II of the Communications Act.  Specifically, Section 222 of the Act imposes privacy obligations on telecommunications carriers and, in this proceeding, the FCC is considering whether to apply those rules, or other rules that might be more applicable to protect consumers, to providers of Internet access services.

The proposed rules focus on transparency, choice and data security. According to the FCC, adoption of the rules will ensure that consumers (i) have the information needed to understand what data broadband providers are collecting and what they do with that information, (ii) can decide how their information is used, and (iii) are protected against the unauthorized disclosure of their information.

  • Transparency. The FCC expects that broadband providers’ privacy policies would include disclosure of what information they collect and for what purpose, what information is shared and with whom, and how consumers can opt in or out of use and sharing of their personal information.
  • Choice. The proposed rules allow the use of personal information as needed to provide broadband services and for other purposes that make sense within the context of the service provider-customer relationship. They also allow service providers to use customer personal information to market other communications services unless the consumer opts out of such usage, but require specific opt-in approval from customers before broadband providers can share customer information with third parties that do not offer communications services.  The proposed rules include mechanisms to document customer opt-in and opt-out choices and provisions on how to notify customers of privacy policies.
  • Data Security. Broadband providers would be required to ensure the security, confidentiality and integrity of any customer information they receive. This would include requirements for regular risk management assessments and training of employees that handle customer information.   The NPRM also proposes to require broadband providers to notify affected customers within ten days of the discovery of a data breach that triggers customer notification requirements, and seeks comment on whether broadband providers should also notify customers after discovery of conduct that could reasonably be tied to a breach.  Further, the NPRM proposes to require broadband providers to notify the FCC of all data breaches, and to notify other federal law enforcement of breaches that impact more than 5,000 customers.  The NPRM proposes to require notification to federal law enforcement within seven days of discovery of such a breach, and three days before notification to the customer, and would allow law enforcement to seek delay of customer notification.  Broadband providers would be required to keep records of any data breaches and notifications for a minimum of two years.

The FCC suggested that it broadly wants to protect personally identifiable information, which, in the broadband context, would include any information that is linked or linkable to an individual and is acquired by the service provider in connection with its provision of broadband services. This could include:  (1) service plan information, including type of service (e.g., cable, fiber, or mobile), service tier (e.g., speed), pricing, and capacity (e.g., information pertaining to data caps); (2) geo-location; (3) media access control (MAC) addresses and other device identifiers; (4) source and destination Internet Protocol (IP) addresses and domain name information; and (5) traffic statistics.  The FCC seeks comments on whether other types of information should also be protected, including port information, application headers, application usage and customer equipment information.

The FCC acknowledged that there are existing state privacy laws that could overlap with the proposed rules. To resolve any conflicts, the proposed rules would preempt state laws that were inconsistent with the FCC’s rules—with the FCC making preemption determinations on a case-by-case basis.  In addition, the rules would prohibit broadband providers from conditioning the offering of service, or the continuation of services, on a customer’s agreement to waive privacy rights guaranteed by law or regulation.

The proposed rules, like the Open Internet Order itself, drew dissents from Republican Commissioners Pai and O’Rielly.  They question the FCC’s jurisdiction to regulate Internet service providers, suggest that the Federal Trade Commission has established standards and precedents to protect consumer privacy, and question whether any rules can be effective that are not also applied to edge and content providers, such as Netflix and Twitter. The Open Internet Order is currently being appealed in the United States Court of Appeals for the DC Circuit, and a decision is expected within the next three months.

Comments on the proposed rules are due May 27, 2016.  Reply Comments are due June 27, 2016.

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November 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Admonishes TV Licensee for Prior Station Owner’s Failure to Timely File Children’s Television Programming Reports
  • Inadequate Antenna Fencing and Signage Result in Proposed Fines of $60,000 and $25,000 for Two Broadband-PCS Licensees
  • Cable Company Settles Data Breach Investigation for $595,000

You Can’t Leave Your Troubles Behind: FCC Clarifies That Prior Violations Transfer Along with TV Station

The FCC’s Video Division admonished a New York TV licensee whose station failed to file Children’s Television Programming Reports in a timely manner for thirteen quarters between 2006 and 2010. The licensee acquired control of the station through a long-form transfer of control consummated in September 2010.

Section 73.3526 of the FCC’s Rules requires each commercial broadcast licensee to maintain a public inspection file containing specific information related to station operations. Subsection 73.3526(e)(11)(iii) requires TV licensees to prepare and place in their public inspection files a Children’s Television Programming Report for each calendar quarter showing, among other things, the efforts made during that three-month period to serve the educational and informational needs of children.

In 2011, the FCC sent a letter to the licensee requesting that the licensee provide information concerning missing Children’s Television Programming Reports between 2006 and 2010. In response, the licensee explained that some of the missing reports had actually been filed under a “–FM” call sign, instead of the licensee’s “–CA” call sign, and admitted that the others had not been filed. The FCC later notified the licensee’s counsel that it had concluded its investigation into the Children’s Television Reports at issue in its 2011 letter, and did not impose a fine or other penalty for the violations at that time.

The violations resurfaced, however, after the station’s license renewal application filing in 2015 triggered an FCC review of the station’s online public inspection file. The FCC issued a Notice of Apparent Liability for Forfeiture to the licensee, proposing a $15,000 fine for its failure to timely file the 2006-2010 Children’s Television Programming Reports. The licensee argued that (i) the FCC had previously investigated the station’s public file and deemed it in compliance, and (ii) the licensee was not responsible for untimely report violations of the station’s prior owner, noting “existing regulations and a consistent line of published decisions and notices” to that effect. In particular, the licensee cited Section 73.3526(d) of the FCC’s Rules, which provides that “[i]f the assignment is consented to by the FCC and consummated, the assignee shall maintain the file commencing with the date on which notice of the consummation of the assignment is filed with the FCC.”

As even the licensee acknowledged, however, “assignments and transfers are dealt with in separate sub-sections of the rule, and the language about the limited responsibility of a new owner appears only in the assignment subsection.” On that basis, the FCC rejected the licensee’s argument, explaining that “[b]ecause the Licensee remains the same after a transfer of control, as a legal matter, liability remains with the licensee.”

Nevertheless, the FCC concluded that the licensee “had reason to believe it was in compliance at the time it submitted its license renewal application because it had filed previously missing reports in 2011 and 2013.” It therefore exercised its discretion to cancel the proposed fine and instead issue an admonishment. The FCC warned, however, that it would not rule out more severe sanctions for similar violations in the future, noting that the FCC takes the timely filing of Children’s Television Programming Reports “very seriously.”

Broadband-PCS Licensees Face Fines for Exposing the Public to Excessive Radiofrequency Levels

The FCC’s Enforcement Bureau proposed $60,000 and $25,000 fines against two broadband-PCS licensees for inadequate warning signs and fencing surrounding certain antennas in Phoenix, resulting in unprotected areas that exceeded what is permissible radiofrequency (“RF”) exposure for the general public. The violations were discovered on the same day as a result of a complaint from the owner of a nearby office building. Continue reading →

Published on:

October 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Time Brokerage Agreement Costs Station and Broker/Buyer $10,000
  • Telecom Provider Agrees to Pay $620,500 to Resolve Investigation of Cell Tower Registration and Lighting Violations
  • FCC Admonishes TV Station Licensee for Failing to Upload Past Issues/Programs Lists to Online Public Inspection File

Brokering Bad: Non-Compliant Time Brokerage Agreement Ends With $10,000 Consent Decree

The FCC’s Media Bureau entered into a Consent Decree with a North Carolina noncommercial educational FM broadcast licensee and a company seeking to acquire the station’s license. The decree resolved an investigation into whether the licensee violated the FCC’s Rules by receiving improper payments from, and ceding control of key station responsibilities to, the proposed buyer.

Under Section 73.503(c) of the FCC’s Rules, a noncommercial educational FM broadcast station may broadcast programs produced by, or whose creation was paid for by, other parties. However, the station can receive compensation from the other party only in the form of the radio program itself and costs incidental to the program’s production and broadcast.

In addition, the FCC requires a station licensee to staff its main studio with at least two employees, one of whom must be a manager (the “main studio rule”). The FCC has clarified that, while a licensee may delegate some functions to an agent or employee on a day-to-day basis, “ultimate responsibility for essential station matters, such as personnel, programming and finances, is nondelegable.”

In March 2013, the station licensee and the company jointly filed an application to assign the station’s license to the company, which had been brokering time on the station for a number of years. The application included a copy of the Time Brokerage Agreement (“TBA”) the parties executed in 2003. In return for airing the broker’s programming, the TBA provided for a series of escalating payments to the station, including initial monthly payments of $6,750 for the first year of the TBA, increasing to $8,614 per month in 2008, and then increasing five percent per year thereafter.

Upon investigating the TBA, the FCC found that the payments were unrelated to “costs incidental to the program’s production and broadcast.” Additionally, the FCC concluded that the TBA violated the main studio rule and resulted in an improper transfer of control of the station license by improperly delegating staffing responsibilities to the broker.

To resolve the investigation into these violations, the licensee and the broker/buyer agreed to jointly pay a $10,000 fine. In exchange, the FCC agreed to grant their assignment application provided that the following conditions are met: (1) full and timely payment of the fine; and (2) “there are no issues other than the Violations that would preclude grant of the Application.”

Telecommunications Provider Settles FCC Investigation of Unregistered and Unlit Cell Towers for $620,500

An Alaskan telecommunications provider entered into a Consent Decree with the FCC’s Enforcement Bureau to resolve an investigation into whether the provider failed to properly register and light its cell towers in violation of the FCC’s Rules. With few exceptions, Section 17.4(a) of the FCC’s Rules requires cell tower owners to register their towers in the FCC’s Antenna Structure Registration (“ASR”) system. In addition, Section 17.21(a) requires that cell towers be lit where their height may pose an obstruction to air traffic, such as towers taller than 200 feet and towers in the flight path of an airport. The FCC’s antenna structure registration and lighting rules operate in conjunction with Federal Aviation Administration regulations to ensure cell towers do not pose hazards to air traffic.

Continue reading →