Telecommunications Category

Hotels Jamming Wi-Fi Signals?

Scott R. Flick

Posted October 3, 2014

By Scott R. Flick

In the U.S., jamming communications signals is illegal. Over the years, I've written a number of posts about the FCC's persistent efforts to prevent jamming. Among these were fines and other actions taken against an Internet marketer of cell phone jamming devices; a variety of individuals and companies selling cell phone jamming devices through Craigslist; an employer attempting to block cell phone calls by its employees at work; a truck driver jamming GPS frequencies to prevent his employer from tracking his whereabouts; and an individual jamming the frequencies used by a shopping mall for its "mall cop" communications systems.

In each of these cases, the FCC went after either the party selling the jamming device, or the user of that device. Normally, jammers work by overloading the frequency with a more powerful interfering signal, confusing the signal receiver or obliterating the lower-powered "authorized" signal entirely. Historically, jammers have often been individuals with a grudge or an employer/employee trying to get the electronic upper hand on the other.

It was therefore a new twist when the FCC announced today that it had entered into a Consent Decree with one of the largest hotel operators in the U.S. "for $600,000 to settle the [FCC's] investigation of allegations that [the operator] interfered with and disabled Wi-Fi networks established by consumers in the conference facilities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee ... in violation of Section 333 of the Communications Act of 1934, as amended...."

The FCC's Order describes the basis for its investigation and the Consent Decree as follows:

Wi-Fi is an essential on-ramp to the Internet. Wi-Fi networks have proliferated in places accessible to the public, such as restaurants, coffee shops, malls, train stations, hotels, airports, convention centers, and parks. Consumers also can establish their own Wi-Fi networks by using FCC-authorized mobile hotspots to connect Wi-Fi enabled devices to the Internet using their cellular data plans. The growing use of technologies that unlawfully block consumers from creating their own Wi-Fi networks via their personal hotspot devices unjustifiably prevents consumers from enjoying services they have paid for and stymies the convenience and innovation associated with Wi-Fi Internet access.

In March 2013, the Commission received a complaint from an individual who had attended a function at the Gaylord Opryland. The complainant alleged that the Gaylord Opryland was "jamming mobile hotspots so that you can't use them in the convention space." Marriott has admitted that one or more of its employees used containment features of a Wi-Fi monitoring system at the Gaylord Opryland to prevent consumers from connecting to the Internet via their own personal Wi-Fi networks. The Bureau investigated this matter to assess Marriott's compliance with Section 333 of the Act and has entered into the attached Consent Decree. To resolve the Bureau's investigation, [the operator] is required, among other things, (i) to pay a $600,000 civil penalty to the United States Treasury, (ii) to develop and implement a compliance plan, and (iii) to submit periodic compliance and usage reports, including information documenting to the Bureau any use of containment functionalities of Wi-Fi monitoring systems, at any U.S. property that [it] manages or owns.

Today's Order makes clear that the FCC's concerns about "signal jamming" are not limited to traditional brute force radio signal interference. In this case, the jamming was done by "the sending of de-authentication packets to Wi-Fi Internet access points." Also of interest is that the FCC did not assert, as it often has in past jamming cases, that it was concerned about the impact of jamming communications on those in nearby public spaces. It appears that the "de-authentication" was limited to areas inside the hotel/convention center, and the FCC made clear that even this limited jamming was "unacceptable".

This is not the first time the FCC has exercised its authority in ways affecting the hospitality industry (for example, fining hotels because their in-house cable systems don't comply with FCC signal leakage limits designed to protect aviation communications). However, the FCC's willingness to step in and regulate access to Wi-Fi on hotel property indicates that the FCC might be a growing influence on hotels' business operations, particularly as hotels seek to make an increasing portion of their revenues from "guest fees" of various types, including for communications services. The Order indicates that the hotel here was charging anywhere from $250 to $1,000 per wireless access point for convention exhibitors and customers, providing a powerful incentive for the hotel to prevent parties from being able to sidestep those charges by setting up personal Wi-Fi hotspots.

Figuring out ways to drive up demand for these hotel services is Business 101. Doing it in a way that doesn't draw the FCC's ire is an upper level class.


FCC Enforcement Monitor

Scott R. Flick Carly A. Deckelboim

Posted August 22, 2014

By Scott R. Flick and Carly A. Deckelboim

August 2014

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:

  • Nonexistent Studio Staff and Missing Public Inspection File Lead to $20,000 Fine
  • Failure to Route 911 Calls Properly Results in $100,000 Fine
  • Admonishment for Display of Commercial Web Address During Children's Programming

Missing Public Inspection File and Staff Result in Increased Fine

A Regional Director of the FCC's Enforcement Bureau (the "Bureau") issued a Forfeiture Order against a Kansas licensee for failing to operate a fully staffed main studio as well as for failing to maintain and make available a complete public inspection file.

Section 73.1125(a) of the FCC's Rules requires that a broadcast station have a main studio with a "meaningful management and staff presence," and Section 73.3526(a)(2) requires that a broadcast station maintain a public inspection file. In July of 2012, a Bureau agent from the Kansas City Office tried to inspect the main studio of the licensee's station but could not find a main studio. Although the agent was able to find the station's public inspection file at an insurance agency in the community of license, the file did not contain any documents dated after 2009. After the inspection, the licensee requested a waiver of the main studio requirement, which the FCC's Media Bureau ultimately denied.

In May of last year, the Bureau issued a Notice of Apparent Liability for Forfeiture ("NAL") against the licensee. In the NAL, the Bureau noted that the base fine for violating the main studio rule is $7,000 and the base fine for violating the public file rule is $10,000. However, due to the over two-year duration of the public inspection file violation and the 14 month duration of the main studio violation, the Bureau increased the base fines by $2,000 and $1,000, respectively, resulting in a total proposed fine of $20,000.

In its response to the NAL, the licensee did not deny the facts asserted in the NAL. Therefore, the Forfeiture Order affirmed the factual determinations that the licensee had violated Sections 73.1125(a) and 73.3526(a)(2) of the FCC's Rules. However, in its NAL Response, the licensee requested that the proposed fine be reduced because the licensee's station serves a small market and it would face competitive disadvantages if it were required to fully staff the main studio.

The Bureau rejected the licensee's request to reduce the fine based on an inability to find qualified staff because there is no exception to Section 73.1125(a)'s requirement of a main studio due to staffing shortages. The Bureau also pointed out that the licensee had no staff presence at the main studio for more than a year. The Bureau briefly entertained the idea that the licensee had intended to argue that it was financially unable to maintain a fully staffed studio; however, since the licensee did not submit any financial information with its response to the NAL, the Bureau dismissed the possibility of reducing the fine amount based on the licensee's inability to pay.

The Bureau also rejected the licensee's argument that maintaining a main studio would place the station at a competitive disadvantage because the licensee's main studio waiver request was based only on financial considerations, which is not a valid basis for a waiver of the main studio rule. Moreover, the Bureau pointed out that even if the waiver had been granted and the licensee had then staffed the studio, corrective action after an investigation has commenced is expected by the FCC, and does not warrant reduction of cancellation of a fine. Therefore, the Bureau affirmed the fine of $20,000.

Automated Response to 911 Calls Leads to Substantial Fine

The Enforcement Bureau issued an NAL against an Oklahoma telephone company for routing 911 calls to an automated operator message in violation of the 911 Act and the FCC's Rules.

Under Section 64.3001 of the FCC's Rules, telecommunications carriers are required to transmit all 911 calls to a Public Safety Answering Point ("PSAP"), to a designated statewide default answering point, or to an appropriate local emergency authority. Section 64.3002(d) of the FCC's Rules further requires that if "no PSAP or statewide default answering point has been designated, and no appropriate local emergency authority has been selected by an authorized state or local entity, telecommunications carriers shall identify an appropriate local emergency authority, based on the exercise of reasonable judgment, and complete all translation and routing necessary to deliver 911 calls to such appropriate local emergency authority."

Continue reading "FCC Enforcement Monitor"


FCC Enforcement Monitor

Scott R. Flick Carly A. Deckelboim

Posted July 25, 2014

By Scott R. Flick and Carly A. Deckelboim

July 2014

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:


  • Multi-Year Cramming Scheme Results in $1.6 Million Fine

  • Violation of Retransmission Consent Rules Leads to $2.25 Million Fine

  • $25,000 Fine for Failure to Respond to FCC

Continued Cramming Practices Lead to Double the Base Fine

The FCC recently issued a Notice of Apparent Liability for Forfeiture ("NAL") against a Florida telephone company for "cramming" customers by billing them for unauthorized charges and fees related to long distance telephone service.

The FCC had received more than 100 customer complaints against the company. The complaints alleged that the company had continued to bill the customers and charge them late fees after they had paid their final bills and canceled their service with the company. The FCC opened an investigation in response to the complaints and issued a Letter of Inquiry ("LOI") to the company in July 2011, but the company did not submit a timely response. The FCC issued an NAL in 2011 proposing a $25,000 fine against the company for its failure to reply to the LOI, and ultimately issued a Forfeiture Order fining the company $25,000.

Section 201(b) of the Communications Act of 1934 (the "Act") requires that that "[a]ll charges . . . in connection with . . . communication service shall be just and reasonable." Prior decisions of the FCC have determined that placing unauthorized charges and fees on consumers' phone bills is an "unjust and unreasonable" practice and is therefore unlawful.

The NAL provides information from 11 customer complaints detailing instances where customers attempted to cancel their service and continued to be charged late fees and other fees by the company. The FCC determined that the phone company did not have authorization to continue billing these customers after they canceled their service.

Although the FCC's Forfeiture Guidelines do not provide a base fine for cramming, the FCC has settled on $40,000 as the base fine for a cramming violation. The NAL addressed 20 cramming violations, which would create a base fine of $800,000. However, the FCC determined that an upward adjustment of the fine was appropriate in this case because the unlawful cramming practices had been occurring since 2011, the company did not respond to the 2011 LOI, and there was a high volume of customers who received cramming charges. Therefore, the FCC increased the proposed fine by $800,000, resulting in a total proposed fine of twice the base amount, or $1.6 million.

Cable Operator's Retransmission of Six Texas TV Stations Results in Multi-Million Dollar Fine

Earlier this month, the FCC issued an order against a cable operator for rebroadcasting the signals of six full-power televisions stations in Texas in violation of the FCC's retransmission consent rules.

The cable operator serves more than 10,000 subscribers in the Houston Designated Market Area ("DMA") in 245 multiple-dwelling-unit buildings and previously had retransmission consent agreements with the stations. However, those agreements expired in December 2011 and March 2012. The cable operator continued retransmitting the signals of those stations without extending or renewing the retransmission consent agreements, and the licensees notified the cable operator that its continued retransmissions were illegal. Subsequently, each licensee filed a complaint with the FCC.

In its May 2012 response to the complaints, the cable operator did not deny that it had retransmitted the stations without the licensee's express written consent, but said that it had relied on the master antenna television ("MATV") exception to the retransmission consent requirement. The cable operator noted that it had begun converting its buildings to MATV systems in November 2011 and had hoped to complete the installations before the retransmission agreements expired in December 2011, but did not complete the MATV installation until July 26, 2012.

Continue reading "FCC Enforcement Monitor"


Glenn Richards of Pillsbury to Speak on Voice Interconnection: Yesterday's Framework, Tomorrow's Service, May 9, 2014

Glenn S. Richards

Posted May 9, 2014

Glenn S. Richards of Pillsbury will be speaking on a panel discussing how the nation's current regulatory structure operates and evaluate the best approach to voice interconnection going forward at this event hosted US Telecom on May 9, 8:30-10:30 a.m. EDT at the US Telecom Executive Conference Center.

For additional details, please click here.


New "Robocall" Rules Impact How Businesses Can Text Consumers

Lauren Lynch Flick Andrew D. Bluth

Posted October 15, 2013

By Lauren Lynch Flick and Andrew Bluth

Beginning tomorrow, October 16, 2013, new FCC "robocalling" rules go into effect that require all businesses to obtain specific written consent from a consumer before sending that consumer marketing messages by telephone or text. While we did an earlier Pillsbury Advisory on these rules, they still appear to be catching businesses off-guard, as many business owners incorrectly assumed that the rules were targeted only at robocallers and text spammers, and are just now beginning to realize that the breadth of business activities reached by these rules is far more extensive.

When calling or texting a cell phone for any non-emergency reason, the FCC's rules have always required that businesses using autodialer technology, like that used in text campaigns, or pre-recorded voices, must first get express consent from the recipient. Prior express consent has also been required before making marketing calls to residential landlines, but the rules contained an exception to that requirement if the business had an established business relationship with the called party (e.g., you ordered something from their catalog in the past eighteen months).

The big change under the new rules is that the prior express consent required to send marketing messages to cell phones (the FCC treats calls and texts the same) or to residential landlines must now be in writing, and there is no longer an exception to that requirement for those with an established business relationship with the called party.

While the impact of this rule change on robocallers is obvious, it applies to most other businesses as well. For example, many broadcast stations have a variety of texting programs, ranging from news, weather and traffic alerts to promotional texts about upcoming programming events or contests. Those stations should now review how the numbers they are texting were originally added to their contact lists, and either be certain that they meet the FCC's new requirements, or suspend texting to those numbers.

For purely informational texts, such as news, weather and traffic alerts, the station need only have previously received express consent to send the type of text message involved. Written consent was not required and is still not required if there is no marketing component to the call. As a result, if the station previously stated it would only use the consumer's cell phone number to send weather alert texts, then weather alerts are the only type of texts the station can send to those who signed up for that type of text message. The weather alert contact database therefore could not be combined with the station's marketing contact database.

The rub is that such stations must also make sure that those weather texts do not include any marketing messages in addition to the weather-related messages. If a marketing component is included (and the definition of marketing for this purpose is very broad), starting tomorrow, they will need to get written consent before sending any more of those messages.

To send promotional or other forms of marketing texts, a business needs to have made a clear and conspicuous disclosure and received clear consent in writing. Importantly, the business cannot require that the written consent be given as a condition of purchasing any product or service. As to the consent being in writing, the FCC permits electronic signatures collected via webforms, email, text messages, telephone keypresses, or voice recordings.

Businesses that previously signed consumers up for their texting programs via a webform, for example, may have given sufficiently clear notice and generated an electronic signature sufficient to fulfill these requirements. Affected businesses should therefore review the language used in their disclosures to be sure that it clearly communicated to the consumer what the texting program involves, and that it did not condition the consumer's ability to make a purchase on their giving this consent. If a business is able to meet these tests, then it should verify that it has retained sufficient records to demonstrate that it obtained the necessary written consent before continuing to text the affected consumers.

While we have covered the high points of the new rules in this post, those affected should definitely read the more detailed description found in our Pillsbury Advisory. In particular, businesses need to be aware that these new rules were adopted pursuant to the Telephone Consumer Protection Act. That law is the source of many class action lawsuits brought on behalf of consumers who have received texts or calls alleged to be in violation of the law, and provides statutory damages where violations are found to have occurred.

Unfortunately, the prospect of class action damages is likely to attract lawsuits for even benign potential violations of the new rules, and just being named a defendant in such a lawsuit can have devastating consequences for that business. While the effort involved in ensuring that your business is in compliance with these rules could be substantial, the risks of proceeding to contact consumers via marketing texts or calls, even where they are your existing customers, is far too great to be ignored.


FCC Enforcement Monitor

Scott R. Flick Paul A. Cicelski

Posted September 30, 2013

By Scott R. Flick and Paul A. Cicelski

September 2013

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 Assesses Substantial Fine for Antenna Lighting Outage
  • Big Fines for Children's Television Violations

Failure to Monitor Antenna Lighting Costly

The FCC issued a Notice of Apparent Liability for Forfeiture (NAL) in the amount of $20,000 to an Alaskan telecommunications company for tower lighting violations.

The height of the antenna structure placed it within the jurisdiction of both the FAA and the FCC. FAA rules required the structure to have dual lighting: red lights at night and medium intensity flashing white lights during the daytime and at twilight.

The company's troubles began when an agent from the FCC's Anchorage Enforcement Bureau office observed that the tower was unlit during the daytime. The FCC agent contacted the FAA, which confirmed that no Notice to Airmen (NOTAM) had been issued for the lighting outage. Tower operators are required to notify the FAA immediately of any lighting outage lasting more than 30 minutes. The FCC agent also alerted the tower owner of the situation. According to the FCC, the owner did not appear to have a functioning monitoring system for the tower lighting.

The NAL cited the owner's failure to visually monitor obstruction lighting on a daily basis or to maintain a functioning alarm system. In response, the owner acknowledged the violation and stated it had identified the source of the problem to be a failing capacitor on the system's control board. It then replaced the failing component and installed a remote monitoring and alarm system for the antenna structure.

The base fine for failing to comply with tower lighting and monitoring requirements and for failing to provide notification of extinguished lights is $10,000. The NAL stated that the fine was increased to $20,000 as part of the FCC's policy of fining "large" companies larger dollar amounts to ensure that the fine "is a deterrent and not simply a cost of doing business."

FCC Actively Pursuing Kidvid Violations

This month, the FCC has once again been bringing enforcement actions against a number of Class A stations for failure to timely file Children's Television Programming Reports on FCC Form 398. The Commission has issued at least ten NALs for Kidvid violations since the beginning of this month.

Continue reading "FCC Enforcement Monitor "


FCC Commences E-Rate Program Overhaul

Christine A. Reilly Glenn S. Richards

Posted August 22, 2013

By Christine A. Reilly and Glenn S. Richards

The August 20, 2013 Federal Register ("FedReg") included a notice officially establishing the comment and reply cycle associated with the Federal Communications Commission's ("FCC" or "Commission") recently released Modernizing the E-Rate Program for Schools and Libraries Notice of Proposed Rulemaking ("NPRM").1 According to the FedReg notice, comments are due September 16, 2013 and reply comments are due October 16, 2013. This is the Commission's latest effort to modernize and streamline the E-Rate program.

The catalyst for this ambitious initiative is President Obama's ConnectED initiative (the "Initiative")2, which establishes that within five years 99 percent of U.S. students will have access to broadband and high-speed Internet access (at least 100 MBPS with a goal of 1 GPS within five years) within their schools and libraries. The Initiative includes: 1) providing the training and support for teachers needed for the effective use of technology in the classroom and 2) encouraging the development and deployment of complimentary devices and software to enhance learning experiences and 3) resurrecting the U.S. as a world leader in educational achievement.

The E-rate program was created in 1997 to "ensur[e] that schools and libraries ha[d] the connectivity necessary to enable students and library patrons to participate in the digital world."3 According to the NPRM, the program commenced when "only 14 percent of the classrooms had access to the Internet, and most schools with Internet access (74 percent) used dial-up Internet access."4 Seven years later, "nearly all schools had access to the Internet, and 94 percent of all instructional classrooms had Internet access." A year later, "nearly all public libraries were connected to the Internet...."5

The E-rate program requires recipients to file annual funding requests. Those funding requests are categorized as either Priority One or Priority Two. Priority One funds may be applied to support telecommunications services, telecommunications and Internet access services, including but not limited to, digital transmission services, e-mail services, fiber and dark fiber, interconnected VoIP, paging, telephone service, voice mail service and wireless Internet access. Priority Two funds are allocated for support of internal connections, including, but not limited to, cabling/connectors, circuit cards and components, data distribution, data protection, interfaces, gateways and antennas, servers and software. The funds are calculated as discounts for acquiring, constructing and maintaining the services. Discount eligibility, which ranges between 20-90 percent, is established by the recipient's status within the National School and Lunch Program ("NSLP") or an "alternative mechanism".6 The NPRM indicated that, "the most disadvantaged schools and libraries, where at least 75 percent of students are eligible for free or reduced price school lunch, receive a 90 percent discount on eligible services, and thus pay only 10 percent of the cost of those services."7

The advent of high-capacity broadband has transformed Internet access into a portal by which students can experience interactive and collaborative learning experiences regardless of their geographic (rural or urban) location while preparing them to "compete in the global economy."8 As with most improvements, this transformation is encumbered in the ways and means for acquiring, constructing and maintaining such technology. The E-rate program, including its administration and funding provisions, has remained relatively unchanged since 1997. The initial, and still current, cap on funding was $2.25 billion dollars. The FCC has indicated that requests for funding have exceeded that cap almost from the beginning. In 2013, requests for E-rate funding totaled more than $4.9 billion dollars.

Article continues -- the full article can be found at FCC Commences E-Rate Program Overhaul.


FCC Adopts Proposed FY 2013 Regulatory Fees

Paul A. Cicelski

Posted August 15, 2013

By Paul A. Cicelski

The FCC has released a Report and Order which includes its final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for fiscal year 2013 (FY 2013), and in some cases how the FCC will calculate Annual Regulatory Fees beginning in FY 2014. The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

The FCC adopted many of its proposals without material changes. Some of the more notably proposals include:

  • Eliminating the fee disparity between UHF and VHF television stations beginning in FY 2014, which is not a particularly surprising development given the FCC's recently renewed interest in eliminating the UHF discount for purposes of calculating compliance with the FCC's ownership limits;
  • Imposing on Internet Protocol TV (IPTV) providers the same regulatory fees as cable providers beginning in FY 2014. In adopting this proposal, the Commission specifically noted that it was not stating that IPTV providers are cable television providers, which is an issue pending before the Commission in another proceeding;
  • Using more current (FY 2012) Full Time Employees (FTE) data instead of FY 1998 FTE data to assess the costs of providing regulatory services, which resulted in some significant shifts in the allocation of regulatory fees among the FCC's Bureaus. In particular, the portion of regulatory fees allocated to the Wireline Competition Bureau decreased 6.89% and that of all other Bureaus increased, with the Media Bureau's portion of the regulatory fees increasing 3.49%; and
  • Imposing a maximum annual regulatory rate increase of 7.5% for each type of license, which is essentially the rate increase for all commercial UHF and VHF television stations and all radio stations. A chart reflecting the FY 2013 fees for the various types of licenses affecting broadcast stations is provided here.
The Commission deferred decisions on the following proposals in the Notice of Proposed Rulemaking that launched this proceeding: 1) combining the Interstate Telecommunications Service Providers (ITSPs) and wireless telecommunications services into one regulatory fee category; 2) using revenues to calculate regulatory fees; and 3) whether to consider Direct Broadcast Satellite (DBS) providers as a new multi-channel video programming distributor (MVPD) category.

The Annual Regulatory Fees will be due in "middle of September" according to the FCC. The FCC will soon release a Public Notice announcing the precise payment window for submitting the fees. As has been the case for the past few years, the FCC no longer mails a hard copy of regulatory fee assessments to broadcast stations. Instead, stations must make an online filing using the FCC's Fee Filer system, reporting the types and fee amounts they are obligated to pay. After submitting that information, stations may pay their fees electronically or by separately submitting payment to the FCC's Lockbox. However, beginning October 1, 2013, i.e. FY 2014, the FCC will no longer accept paper and check filings for payment of Annual Regulatory Fees.


FCC Enforcement Monitor

Scott R. Flick Paul A. Cicelski

Posted February 25, 2013

By Scott R. Flick and Paul A. Cicelski

February 2013

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 Takes Action Against Interference and Unlicensed Operations
  • FCC Assesses $25,000 Fine for Unresponsiveness

Licensee Cannot Escape Fine for Intentional Jamming and Unlicensed Operations
In a rather odd chain of events, the FCC recently issued a Memorandum Opinion and Order ("Order") against an individual in Thousand Oaks, California stemming from a 2009 investigation and a 2011 Forfeiture Order. The Order rejected a petition for reconsideration of the earlier Forfeiture Order and affirmed the FCC's decision to fine the individual for unlicensed radio operations, intentional interference with radio operations, and refusal to allow an inspection of radio equipment.

In March 2009, an agent from the FCC's Enforcement Bureau investigated radio interference at a shopping center. The agent located an unlicensed repeater transmitter operating from a secure radio communications facility on Oat Mountain with a beam antenna pointed in the direction of the shopping center. The repeater was transmitting pulsating signals on 461.375 and 466.375 MHz, the land mobile frequencies licensed to the shopping center for its own operations. These transmissions were jamming the shopping center's licensed land mobile operations.

During the investigation, an unidentified individual communicated with shopping center personnel on a different set of frequencies, telling them they had "plenty of warning", that he was jamming their licensed frequencies to force them to cease use of those frequencies, and that they needed to apply to the FCC to cancel their current land mobile license and apply for a new license to operate on different frequencies. He then began transmitting NOAA weather radio on the licensed frequencies to block any use of those frequencies by the shopping center.

Continue reading "FCC Enforcement Monitor"


FCC Provides Clarity for Businesses Responding to Texting Opt-Outs

Lauren Lynch Flick Andrew D. Bluth

Posted December 3, 2012

By Lauren Lynch Flick and Andrew D. Bluth

Resolving a conundrum faced by every business that has entered the world of consumer texting, the FCC has ruled that businesses are not violating the federal Telephone Consumer Protection Act ("TCPA") by sending a confirmation text to consumers who have just opted out of receiving further texts. However, the FCC did impose limitations on the content of such confirmation texts to ensure compliance with the TCPA. The threshold requirement is that the purpose of the reply text be solely to confirm to the consumer that the opt-out request has been received and will be acted on. The FCC then enumerated several additional requirements that businesses must observe when sending confirmation texts to avoid violating the TCPA. For those affected, which is pretty much every business that uses texts to communicate with the public, we have released a Client Alert on the subject.

To many, sending a confirmation text to a consumer who has previously opted in to receiving a company's text messages would appear to be nothing more than good customer service and an extension of the common practice of sending a confirmatory email message when a consumer has chosen to unsubscribe from an email list. Indeed, many wireless carriers and mobile marketing and retail trade associations have adopted codes of conduct for mobile marketers that include sending confirmation texts to consumers opting out of future text messages.

However, the TCPA, among other things, makes it illegal to make a non-emergency "call" to a mobile telephone using an automatic telephone dialing system or recorded voice without the prior express consent of the recipient. The FCC's rules and a decision in the U.S. Court of Appeals for the Ninth Circuit define a "call" as including text messages. As a result, many businesses have had class action lawsuits filed against them by consumers arguing that, once they send a text message opting out of receiving future texts, their prior consent has been revoked, and the business violates the TCPA by sending ANY further texts, even in reply to the consumer's opt-out text.

Seeking to avoid facing such lawsuits and the potential for conflicting decisions from different courts, businesses sought the FCC's intervention. After reviewing the issue, the FCC rejected the fundamental argument raised by the class action suits, noting that the FCC has never received a single complaint from a consumer about receiving a confirmatory text message. The FCC did note, however, that it had received complaints from consumers about not receiving a confirmation of their opt-out request. The Commission therefore held that when consumers consent to receiving text messages from a business, that consent includes their consent to receiving a text message confirming any later decision to opt out of receiving further text messages.

To avoid creating a loophole in the TCPA that might be exploited by a business, the FCC proceeded to set limits on confirmation texts designed to ensure that they are not really marketing messages disguised as confirmation texts. First and foremost, the implied permission to send a confirmation text message only applies where the consumer has consented to receiving the company's text messages in the first place. Next, the confirmation text message must be sent within five minutes of receiving the consumer's opt-out request, or the company will have to prove that a longer period of time to respond was reasonable in the circumstances. Finally, the text of the message must be truly confirmatory of the opt-out and not contain additional marketing or an effort to dissuade the consumer from opting out of future texts. You can read more about the FCC's decision and these specific requirements in the firm's Client Alert.

By providing clarity on the relationship between confirmation texts and the TCPA, the FCC's ruling provides marketers and other businesses with some welcome protection from class action TCPA suits. In an accompanying statement, Commissioner Ajit Pai stated that "Hopefully, by making clear that the Act does not prohibit confirmation texts, we will end the litigation that has punished some companies for doing the right thing, as well as the threat of litigation that has deterred others from adopting a sound marketing practice." Businesses just need to make sure they comply with the FCC's stated requirements for confirmation texts to avail themselves of these protections.


Does Your Mobile App Provide Reasonable Access to Your Privacy Policy?

Lauren Lynch Flick Amy L. Pierce

Posted November 19, 2012

By Lauren Lynch Flick and Amy L. Pierce

The privacy practices of mobile applications ("Apps") have been under scrutiny from a wide variety of domestic and foreign regulatory authorities of late. Most recently, California Attorney General Kamala D. Harris issued a press release regarding a new enforcement effort aimed at bringing mobile Apps into compliance with California's Online Privacy Protection Act ("CalOPPA" or "Act").

CalOPPA applies to any online service that collects personally identifiable information through the Internet about a Califorina resident who uses or visits the online service. In other words -- the Act appears to apply to the entire world wide web. And now that includes any mobile App that uses the Internet to collect personally identifiable information.

On October 30, 2012, the California Attorney General sent a series of letters to mobile App operators reminding them that CalOPPA requires that they conspicuously post a privacy policy that complies with specified requirements. She stressed that the privacy policy must be "reasonably accessible ... for consumers of the online service."

The Attorney General did not dictate how Apps could comply with the posting requirement. However, she did state that having a website with the applicable privacy policy conspicuously posted may be adequate, but only if a link to that website is "reasonably accessible" to the user within the App. She also warned that, under California's unfair competition law, violations of CalOPPA may result in penalties of up to $2,500 for each violation. In the context of a mobile App, each copy of the unlawful App downloaded by California consumers would constitute a separate violation.

The California Attorney General's action is another step towards requiring mobile Apps to provide consumers with the same sorts of privacy protections as they have come to expect when surfing the Web at home or work. What industry and regulators continue to struggle with is doing so in the unique environment of mobile devices.

Click here for a copy of California Attorney General Kamala D. Harris' press release and a sample non-compliance letter.


FCC Takes First Steps Towards Telecom Foreign Ownership Reform

Paul A. Cicelski

Posted September 20, 2012

By Paul A. Cicelski

The FCC recently released an Order giving companies greater flexibility in how they can structure foreign investment in common carrier licensees, such as wireless companies that provide phone service. This action, taken in a proceeding initiated last year, is a first step towards simplifying and streamlining the FCC's cumbersome foreign ownership review and approval process, with the goal of facilitating increased foreign investment in telecommunications companies.

The FCC's foreign ownership policy is governed by Section 310 of the Communications Act. Section (b)(3) of the statute requires the FCC to prohibit certain foreign entities from being FCC licenses themselves and from directly holding ownership interests that exceed specified levels in certain types of FCC licensees, such as common carrier licensees. The FCC's International Bureau previously interpreted this provision to strictly prohibit foreign entities from having more than a 20% non-controlling interest (direct or indirect) in an FCC common carrier licensee.

The Order replaces this absolute prohibition with a discretionary policy already in use under a different section of the statute, Section 310(b)(4). That section restricts foreign entities from having more than a 25% controlling interest (direct or indirect) in any parent company of an FCC common carrier licensee (among other entities), unless the FCC specifically approves a greater foreign ownership interest.

The FCC makes the determination of whether it should allow greater foreign investment under Section 310(b)(4) and now under Section 310(b)(3), by examining whether the foreign investment is from a World Trade Organization (WTO) Member country, using a "principal place of business" test. If under the principal place of business test the investment is from a WTO Member country, the proposed foreign investment is presumed to be competitive and in the public interest. Where the investment is from a non-WTO Member country, the FCC applies what is known as an "effective competitive opportunities" or "ECO" test. The purpose of the ECO test is to determine whether competitive opportunities exist for American companies in those non-WTO Member countries and whether the foreign investment in the U.S. will serve the public interest.

The FCC's foreign ownership review and approval process under Section 310(b)(4) has historically proven to be complex and time-consuming, both for licensees and the FCC. Licensees are required to engage in costly and extensive efforts in order to compile detailed information regarding citizenship and principal places of business of investors. There is no exception for individuals and entities that hold even de minimis interests through multiple intervening investment vehicles and holding companies. Moreover, licensees often have to conduct this exercise repeatedly given the fluid nature of investments. For its part, the FCC must expend considerable resources of its own processing (and often reprocessing) the voluminous and detailed information submitted by licensees.

The FCC's decision liberalizes only its ownership policies under Section 310(b)(3). It leaves for another day the extensive reforms proposed by the FCC in a Notice of Proposed Rulemaking regarding foreign ownership under Section 310(b)(4).

The FCC's Order has been published in the Federal Register and is now in effect. Parties interested in learning more about the FCC's Order or the foreign ownership reform proceeding should contact Pillsbury for advice.


FCC Enforcement Monitor

Scott R. Flick

Posted August 30, 2012

By Scott R. Flick and Lauren A. Birzon

July 2012
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 is a special issue regarding recent FCC actions that provide a detailed (and expensive) look at Section 73.1206, the prohibition on recording telephone calls for broadcast.

FCC Issues a Total of $41,000 in Fines for Broadcaster Airing Prank Telephone Calls

The close of August in Washington, D.C. has brought with it a surge of beautiful weather, baseball excitement (for the first time in recent memory), and ... forfeiture orders related to the improper recording of telephone calls for broadcast. On August 22nd, the FCC issued two forfeiture orders assessing a combined $41,000 in fines against licensees owned by the same parent company for violations of the telephone broadcast rule.

The telephone broadcast rule, Section 73.1206 of the Commission's Rules, requires that, "[b]efore recording a telephone conversation for broadcast, or broadcasting such a conversation simultaneously with its occurrence, a licensee shall inform any party to the call of the licensee's intention to broadcast the conversation, except where such party is aware, or may be presumed to be aware from the circumstances of the conversation, that it is being or likely will be broadcast." While the rule language only talks about providing notice to the calling party, the FCC has reiterated many times that when a station employee intends to record a call for broadcast or broadcasts the call live, the employee must also obtain the party's consent before recording the call or going live.

Both orders released on August 22nd involved a finding that the licensee had violated this rule. The first order involved prank calls made in April 2006 by radio personalities to members of the public during a comedy segment of the station's morning show. In one conversation, the caller pretended to be an intruder hiding under the bed of the person receiving the call; in another, the caller pretended to be a loan shark bent upon collecting a debt.

The FCC began investigating the prank calls after receiving a complaint from a station listener. During the investigation, the licensee indicated it was unable to confirm or deny whether the prank calls aired on its morning show, and could not provide a recording or transcript of the program. The licensee acknowledged, however, that the program identified in the complaint was aired on the station and was simulcast on two co-owned stations.

The second forfeiture order released on the 22nd also involved the broadcast of an alleged prank call in which the caller pretended to be a hospital employee who then informed the call recipient that the recipient's husband had been in a motorcycle accident and died at the hospital. When questioned about the incident, the licensee told the FCC that its parent company had contracted with an outside vendor who made and recorded the call. The licensee admitted that it broadcast the call on multiple occasions.

In the first case, the FCC had proposed a $25,000 fine. In the second case, the FCC had proposed a $16,000 fine. In both cases, the licensee urged cancellation of the proposed fines, to no avail. In batting down a myriad of arguments raised by the licensees, the FCC affirmed not only its broad investigative powers to enforce Section 73.1206, but also the licensees' responsibility to both adhere to and demonstrate their adherence to the Commission's Rules.

These two decisions provide an excellent primer for broadcasters on the FCC's enforcement of the telephone broadcast rule, as between them, the FCC addressed a multitude of defenses raised by the licensees, ultimately concluding that none of those defenses could prevent the imposition of very substantial fines. More specifically, the FCC shot down each of the following licensee arguments:

Continue reading "FCC Enforcement Monitor"


FCC Enforcement Monitor

Scott R. Flick Christine A. Reilly

Posted February 29, 2012

By Scott R. Flick and Christine A. Reilly

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:

  • Inadequate Sponsorship ID Ends with $44,000 Fine
  • Unattended Main Studio Fine Warrants Upward Adjustment
  • $16,000 Consent Decree Seems Like a Deal

Licensee Fined $44,000 for Failure to Properly Disclose Sponsorship ID
For years, the FCC has been tough on licensees that are paid to air content but do not acknowledge such sponsorship, and an Illinois licensee was painfully reminded that failing to identify sponsors of broadcast content has a high cost. In a recent Notice of Apparent Liability ("NAL"), the FCC fined the licensee $44,000 for violating its rule requiring licensees to provide sponsorship information when they broadcast content in return for money or other "valuable consideration."

Section 317 of the Communications Act and Section 73.1212 of the FCC's Rules require all broadcast stations to disclose at the time the content is aired whether any broadcast content is made in exchange for valuable consideration or the promise of valuable consideration. Specifically, the disclosure must include (1) an announcement that part or all of the content has been sponsored or paid for, and (2) information regarding the person or organization that sponsored or paid for the content.

In 2009, the FCC received a complaint alleging a program was aired without adequate disclosures. Specifically, the complaint alleged that the program did not disclose that it was an advertisement rather than a news story. Two years after the complaint, the FCC issued a Letter of Inquiry ("LOI") to the licensee. In its response to the LOI, the licensee maintained that its programming satisfied the FCC's requirements and explained that all of the airings of the content at issue contained sponsorship identification information, with the exception of eleven 90-second spots. In these eleven spots, the name of the sponsoring organization was identified, but the segment did not explicitly state that the content was paid for by that organization.

Though the licensee defended its program content and the disclosure of the sponsor's name as sufficient to meet the FCC's requirements, the FCC was clearly not persuaded. The FCC expressed particular concern over preventing viewer deception, especially when the content of the programming is not readily distinguishable from other non-sponsored news programming, as was the case here.

The base forfeiture for sponsorship identification violations is $4,000. The FCC fined the licensee $44,000, which represents $4,000 for each of the eleven segments that aired without adequate disclosure of sponsorship information.

Absence of Main Studio Staffing Lands AM Broadcaster a $10,000 Penalty
In another recently released NAL, the FCC reminds broadcasters that a station's main studio must be attended by at least one of its two mandatory full-time employees during regular business hours as required by Section 73.1125 of the FCC's Rules. Section 73.1125 states that broadcast stations must maintain a main studio within or near their community of license. The FCC's policies require that the main studio must maintain at least two full-time employees (one management level and the other staff level). The FCC has repeatedly indicated in other NALs that the management level employee, although not "chained to their desk", must report to the main studio on a daily basis. The FCC defines normal business hours as any eight hour period between 8am and 6pm. The base forfeiture for violations of Section 73.1125 is $7,000.

According to the NAL, agents from the Detroit Field Office ("DFO") attempted to inspect the main studio of an Ohio AM broadcaster at 2:20pm on March 30, 2010. Upon arrival, the agents determined that the main studio building was unattended and the doors were locked. Prior to leaving the main studio, an individual arrived at the location, explained that the agents must call another individual, later identified as the licensee's Chief Executive Officer ("CEO"), in order to gain access to the studio, and provided the CEO's contact number. The agents attempted to call the CEO without success prior to leaving the main studio.

Approximately two months later, the DFO issued an LOI. In the AM broadcaster's LOI response, the CEO indicated that the "station personnel did not have specific days and times that they work, but rather are 'scheduled as needed.'" Additionally, the LOI response indicated that the DFO agents could have entered the station on their initial visit if they had "push[ed] the entry buzzer."

In August 2010, the DFO agents made a second visit to the AM station's main studio. Again the agents found the main studio unattended and the doors locked. The agents looked for, but did not find, the "entry buzzer" described in the LOI response.

The NAL stated that the AM broadcaster's "deliberate disregard" for the FCC's rules, as evidenced by its continued noncompliance after the DFO's warning, warranted an upward adjustment of $3,000, resulting in a total fine of $10,000. The FCC also mandated that the licensee submit a statement to the FCC within 30 days certifying that its main studio has been made rule-compliant.

Continue reading "FCC Enforcement Monitor"


Increase in HSR Thresholds Makes More Room for Larger Communications Transactions

Miles S. Mason

Posted February 9, 2012

By Miles S. Mason

While the FCC gets to have a say in nearly every sale or merger in the communications industry, no matter how small, the Department of Justice and the Federal Trade Commission will also be called upon if a transaction is large enough. The test for when a transaction is large enough to require a filing with the DOJ or the FTC is whether it exceeds the minimum financial thresholds of the Hart-Scott-Rodino ("HSR") Act.

Because of inflation and other factors, however, the HSR thresholds must be annually adjusted to accurately separate small deals from big deals. This separation is critical because the DOJ and the FTC have limited resources to investigate transactions, and therefore only require advance notification of transactions that involve companies or transactions above a certain minimum size. Transactions that fall below the HSR reporting thresholds, however, are not immune from antitrust scrutiny even after they are consummated if they are likely to have an anticompetitive effect in any relevant market.

On February 27, 2012, the HSR thresholds will increase significantly, with the "minimum size-of-transaction test" threshold increasing from $50 million to $68.2 million. If the value of the proposed transaction is above $68.2 million but below $272.8 million (up from $200 million), reporting is required only if the ultimate parents of the acquiring and acquired entities meet certain "size-of-person" tests, the thresholds for which will also increase on February 27, 2012. Subject to a myriad of exemptions, transactions valued at over $272.8 million under the HSR regulations must generally be reported. If that sounds complicated (and it can be), Pillsbury's Antitrust lawyers recently published an Advisory with more details on these changes.

While transactions that meet these thresholds must be reported whether or not they are communications-related, the thresholds can be particularly relevant to large broadcasters, since broadcasters that enter into a transaction requiring an HSR filing need to be aware that they may not be able to implement a local marketing agreement or similar cooperative arrangement in conjunction with an anticipated acquisition until the HSR filing has been made and the mandatory post-filing waiting period has either passed without action by the DOJ/FTC, or the DOJ/FTC have agreed to terminate the HSR waiting period early.

With communications transactions starting to heat up again, the increase in the HSR thresholds is welcome, and may simplify transactions that fall above the current HSR thresholds, but below the new ones.