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Toll free calling began in 1967, with the introduction of the 800 toll free code. It remains a frequently used communications tool, even in the Internet age, as new toll-free applications are developed, including the capability to send text messages to certain toll-free numbers. Yesterday, the FCC released a Report and Order that made several innovative changes to the toll free number marketplace.

First, the FCC revised its rules to permit the use of auctions to assign toll free numbers. Since 1998, the FCC has used a “first-come, first-served” approach, but now asserts that the times have changed such that flexibility in the form of auctions is necessary to meet the statutory requirement that toll free numbers be allocated “on an equitable basis.”

Specifically, the FCC states that the first-come, first-served approach has “rewarded actors that have invested in systems to increase the chances that their choices of toll free numbers are received first.” It also states that assigning numbers at no cost “has allowed accumulation of numbers without ensuring those numbers are being put to their most efficient use.”

The FCC will not waste any time using its new auction authority. The 833 toll free code, which was opened in 2017, currently has 17,000 “mutually exclusive” numbers. Mutually exclusive numbers are those subject to multiple requests. The FCC has established the 833 Auction to sell the rights to these numbers.

The Report and Order also revises FCC rules to allow a secondary market for toll free numbers purchased in an auction. Currently, FCC rules prevent three types of conduct that make a secondary market infeasible: (1) “brokering,” which is the selling of a toll free number by a private entity for a fee; (2) “hoarding,” which is the “acquisition by a toll free subscriber . . . of more toll free numbers than the toll free subscriber intends to use for the provision of toll free service;” and (3) “warehousing,” where toll free numbers are reserved without having an actual toll free subscriber for whom the numbers are being reserved.

The FCC explained that a secondary market for toll free numbers assigned via auction is desirable because it “permit[s] subscribers to legally obtain numbers which they value.” It further explained that a secondary market promotes efficient operation of an auction by allowing the purchase or sale of numbers in response to the outcome of the auction, and “limits pre-auction costs associated with estimating which—and how many—numbers a bidder may win.” Also, with a nod to speculators, it explained that a secondary market “encourages value-creating entities to promote efficiency by procuring rights to numbers with an intent to sell those rights to other interested subscribers.”

The rule changes established in the Report and Order will go into effect 30 days after publication in the Federal Register.

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The first 911 call was made 50 years ago, long before wireless phones, texting, and Internet calling were used for everyday communications. Congress and the FCC regularly propose and adopt laws and regulations to keep pace with ever-changing technology. Those efforts continue today with the release by the FCC of a Notice of Proposed Rulemaking (“NPRM”) to implement two bills recently adopted by Congress to improve 911 emergency calling.

The first, Kari’s Law, requires multi-line telephone systems (“MLTS”) in the United States to allow users to dial 911 directly, without having to dial a “9” or any other prefix to reach an outside line. The law was enacted in February in honor of a Texas woman who was fatally stabbed in a hotel room by her estranged husband in 2013. The woman’s nine-year-old daughter was in the room at the time and repeatedly tried dialing 911, but did not know that an extra “9” was needed to reach an outside line.

Though the focus here was on hotel phone services, the application to MLTS makes the impact much broader. MLTS are telephone systems used in settings such as office buildings, campuses, and hotels. Kari’s Law also requires that such systems transmit a notification to an appropriate on-site or third-party contact, such as a front desk or security office, when a 911 call is made.

Under the proposed rules, the direct dialing requirement would be mandatory for “persons engaged in the business of manufacturing, importing, selling, or leasing MLTS, as well as persons engaged in the business of installing, managing, or operating MLTS.” The notification requirement would mandate that a “person engaged in the business of installing, managing, or operating MLTS shall, in installing, managing, or operating the system, configure it to provide a notification that a 911 call has been placed by a caller on the MLTS system.” The notification would be required to include, at a minimum, the following information: (1) that the 911 call has been made; (2) a valid callback number; and (3) the caller’s location. In addition, to ensure timely notifications, the FCC proposes that notifications be transmitted at the same time as the 911 call.

The statutorily mandated compliance date of Kari’s Law is February 16, 2020, and only applies to MLTS that are “manufactured, imported, offered for first sale or lease, first sold or leased, or installed” after that date. Other MLTS are grandfathered from compliance.

The NPRM also proposes rules to implement RAY BAUM’S Act, which was enacted in March and requires that the FCC conduct a proceeding that considers adopting rules that require “dispatchable location” be transmitted to 911 call centers, regardless of the technological platform used. Dispatchable location is defined in the NPRM as “the street address of the calling party, and additional information such as room number, floor number, or similar information necessary to adequately identify the location of the calling party.” Currently, when a 911 call is made in an MLTS environment such as a large campus or hotel, the location may be included in the information sent to the 911 call center, but that location may be the site’s main entrance or an administrative office and not the precise location of the caller.

Under the proposed rules, the transmission of a dispatchable location would be required for MLTS, fixed telephone service, interconnected Voice over Internet Protocol (“VoIP”) services, and Telecommunications Relay Service. The FCC seeks comment on the technical feasibility of the requirement, a comparison of the costs and benefits, and whether the requirement should be extended to any other 911-capable services, such as outbound-only VoIP. The proposed compliance date is February 16, 2020, to coincide with the compliance date of Kari’s Law.

Comment on the FCC’s proposals will be due 45 days after the NPRM’s publication in the Federal Register, with reply comments due 30 days after that date.

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Toll-free telephone numbers celebrated their 50th birthday this year (frankly, without much fanfare). These numbers allow callers to reach businesses without being charged for the call. When long distance calling was expensive, these numbers were enticing marketing tools used by businesses to encourage customer calls and provide a single number for nationwide customer service—for example, hotel, airline or car rental reservations.

Toll-free numbers are most valuable to businesses when they are easy to remember because they spell a word (1-877-DENTIST) or have a simple dialing pattern (1-855-222-2222). Like all telephone numbers, however, the FCC considers toll-free numbers to be a public resource, not owned by any single person, business or telephone company. Toll-free numbers are assigned on a first-come, first-served basis, primarily by telecommunications carriers known as Responsible Organizations. The FCC even has rules that prohibit hoarding (keeping more than you need) or selling toll-free numbers.

But the rules will change if the FCC adopts its recent proposal to assign toll-free numbers by auction as it prepares to open access to its new “833” toll-free numbers. The Notice of Proposed Rulemaking issued last week proposes to auction off approximately 17,000 toll-free numbers for which there have been competing requests. The proceeds of these auctions would then be used to reduce the costs of administering toll-free numbers.

The NPRM also contemplates revising the current rules to promote the development of a secondary market for toll-free numbers. This would allow subscribers to reassign toll-free numbers to other businesses for a fee (think 1-800-STUBHUB!). The FCC suggests this would promote economic efficiencies, as the number would presumably be better utilized by a business owner willing to pay for it than by the company that merely happened to claim it first.

The proposed rules are not without controversy. Some toll-free numbers are used to promote health, safety and other public interest goals (e.g., 1-800-SUICIDE). The NPRM seeks comments on whether toll-free numbers used by governmental or certain nonprofit organizations should be exempt from the auction process. There are also questions about whether the expected demand for the 17,000 new numbers will erode if claiming a number is no longer free.

Comments in this proceeding will be due 30 days after the NPRM is published in the Federal Register, with replies due 30 days after that. If you are interested in filing comments, you can reach us at 1-888-387-5714 Call: 1-888-387-5714.  After all, it’s a toll-free call.

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Imagine dialing 911 and hearing an automated voice tell you that what you have dialed is not a valid number; or reaching a 911 call center only to have emergency personnel dispatched to the wrong location. In response to such problems, the FCC recently released a Notice of Inquiry (NOI) asking a broad range of questions about the capability of enterprise-based communications systems (ECS)—internal phone systems used in places like office buildings, campuses and hotels—to provide access for 911 calls.

According to the FCC, certain of these systems may not support direct 911 dialing, may not have the capability to route calls to the appropriate 911 call center, or may not provide accurate information on the caller’s location. The NOI seeks public comment on consumer expectations regarding the ability to access 911 call centers when calling from an ECS, and seeks ways, including regulation if needed, to improve the capabilities of ECS to provide direct access for 911 calls.

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The FCC voted unanimously yesterday to adopt a Notice of Inquiry (“NOI”) that may have a profound impact on the delivery of communications services in residential and commercial buildings, shopping malls and other multiple tenant environments (“MTEs”). This proceeding will revisit FCC rules and policies developed during the last 17 years, focusing on whether changes need to be made to enhance broadband deployment and consumer choice.  Building owners and managers, communications service providers, and tenants all have a stake in the outcome of this inquiry.

In a nutshell, current FCC policies favor competitive access by telecom and video service providers (with some exceptions), and prohibit exclusive contracts between service providers and building owners that would limit such access. These rules also cover access to in-building wiring and the conduits and rights-of-way within these properties that are owned or controlled by the service providers.   The rules apply to regulated service providers because the FCC generally lacks jurisdiction over building owners and managers.

The most recent FCC order, issued in 2010, approved the use of exclusive marketing and bulk billing arrangements between video providers and building owners. Exclusive marketing arrangements give video providers the exclusive right to market services to residents in a building.  Bulk billing arrangements permit the video provider to serve each resident of the building, usually at a significant discount from the retail rate.  The billing for services is often included within the rent, whether the resident uses the services or contracts with another service provider.

The FCC initiated this proceeding in response to allegations from fixed and mobile broadband service providers that they face challenges in expanding their service footprint because of MTEs with exclusive contracts. There are also arguments that state regulations intended to encourage competitive access actually hinder the ability to provide competitive services. In one pending proceeding, a group of service providers has asked the FCC to preempt an ordinance recently adopted by the City of San Francisco requiring building owners to give competing service providers access to existing wiring upon request from a resident, which the complaining service providers and many building owners contend will deter investment in the communications infrastructure of new buildings and is impractical because of space limitations in many older buildings.

Unlike the earlier proceedings which were focused on specific markets (telecommunications or video services) or types of buildings (resident or commercial), the NOI will cover all services and all types of MTEs. Indeed, for the purpose of this proceeding, MTEs include both commercial and residential premises such as apartment and condominium buildings, shopping malls, gated communities, mobile home parks, garden apartments and other centrally managed residential real estate developments, or any multi-unit premise occupied by two or more distinct units.  Most buildings are covered by this proceeding.

Some of the specific questions on which the FCC seeks comment include:

  1. Whether there are state and local regulations that may inhibit broadband deployment and competition within MTEs;
  2. Whether the FCC should revisit its decision approving exclusive marketing and bulk billing arrangements;
  3. Whether revenue sharing agreements, exclusive wiring arrangements or other types of contractual provisions are affecting broadband competition within MTEs;
  4. Whether there are statutory or jurisdictional considerations that should guide the FCC’s actions in this proceeding; and
  5. Whether the proposed reclassification of broadband internet access as an information service will impact the FCC’s legal authority to address broadband deployment within MTEs.

Comments in this proceeding will be due July 24, 2017 and reply comments will be due August 22, 2017.   The NOI process is a first step toward the development of new rules.  Once the NOI comment cycle is completed, the FCC may issue a Notice of Proposed Rulemaking proposing rule changes, requiring another round of comments before new rules could be adopted.

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Robocalls and telemarketing calls are reliably the top source of consumer complaints received by the FCC.  Despite the good intentions of the 1991 Telephone Consumer Protection Act (TCPA), FCC decisions implementing the TCPA, and the collective efforts of the telecom industry, there has been little relief from these unwanted calls—particularly at dinner time.  More problematic is that an increasing number of these calls use false (or spoofed) Caller ID to perpetrate scams designed to trick call recipients into believing the call is coming from the Internal Revenue Service, law enforcement, computer support, or a credit card company.

The FCC is now making another attempt to reduce unwanted and sometimes fraudulent telemarketing calls and robocalls.  In a draft Notice of Proposed Rulemaking and Notice of Inquiry circulated March 2nd and to be considered formally at the next FCC Open Meeting on March 23rd, the FCC is proposing to adopt rules that would allow voice service providers (including wireline, wireless and VoIP providers) to block spoofed calls in certain circumstances. Continue reading →

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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.

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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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The FCC today released its much anticipated Open Internet Order. While it will take some time to digest the 313-page decision (though the new rules only total eight pages), here is a brief summary of the highlights:

  • No Blocking. The Order prohibits providers of broadband Internet access services (“broadband services”) from blocking lawful content, applications, services, or non-harmful devices, subject to reasonable network management.
  • No Throttling. The Order prohibits providers of broadband services from impairing or degrading lawful Internet traffic on the basis of content, application or service, or use of a non-harmful device, subject to reasonable network management. This includes no degradation of traffic based on source, destination, or content and prohibits singling out content that competes with the broadband provider’s business model.
  • No Paid Prioritization. The Order prohibits paid prioritization, which the FCC views as the management of a broadband provider’s network to directly or indirectly favor some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (a) in exchange for consideration (monetary or otherwise) from a third party, or (b) to benefit an affiliated entity.
  • No Unreasonable Interference. The Order also prohibits broadband providers from unreasonably interfering with or unreasonably disadvantaging (i) end users’ ability to select, access, and use broadband Internet access service or lawful Internet content, applications, services, or devices of their choice, or (ii) edge providers’ ability to make lawful content, applications, services, or devices available to end users. The FCC indicates that reasonable network management will not violate this rule.
  • Reasonable Network Management. The Order defines reasonable network management as follows:

    A network management practice is a practice that has a primarily technical network management justification, but does not include other business practices. A network management practice is reasonable if it is primarily used for and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.

  • Enhanced Transparency. The rule adopted in 2010, and upheld on appeal, remains in effect. Specifically, broadband providers must accurately disclose information regarding network management practices, as well as performance and commercial terms sufficient for consumers to make informed choices regarding use of the service. The rule has been enhanced by: adopting a requirement that broadband providers always disclose promotional rates, all fees and/or surcharges, and all data caps or data allowances; adding packet loss as a measure of network performance that must be disclosed; and requiring specific notification to consumers that a “network practice” is likely to significantly affect their use of the service. The FCC granted a temporary exemption from these enhancements for small providers (defined for the purposes of this temporary exception as providers with 100,000 or fewer subscribers), and asked the Consumer & Governmental Affairs Bureau to adopt an Order by December 15, 2015 deciding whether to make the exception permanent and, if so, the appropriate definition of “small”.
  • Scope of Rules. The FCC clarified that the rules apply to both fixed and mobile broadband Internet access service. The focus is on the consumer-facing service which that FCC defines as:

    A mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence, or that is used to evade the protections set forth in this Part.

    The definition does not include enterprise services, virtual private network services, hosting, or data storage services. The definition also does include the provision of service to edge providers.

  • Interconnection. Because broadband service is classified as telecommunications, the FCC indicates that commercial arrangements for the exchange of traffic with a broadband provider are within the scope of Title II, and the FCC will be available to hear disputes raised on a case-by-case basis. The Order does not apply the Open Internet rules to interconnection.
  • Enforcement. The FCC may enforce the Open Internet rules through investigation and the processing of complaints (both formal and informal). In addition, the FCC may provide guidance through the use of enforcement advisories and advisory opinions, and it will appoint an ombudsperson on the subject. The Order delegates to the Enforcement Bureau the authority to request a written opinion from an outside technical organization or otherwise to obtain objective advice from industry standard-setting bodies or similar organizations.
  • “Light touch” Title II. While reclassifying broadband services under Title II of the Communications Act, the FCC forbears from applying more than 700 codified rules, including no unbundling of last-mile facilities, no tariffing, no rate regulation, and no cost accounting rules. The FCC also states that reclassification will not result in the imposition of any new federal taxes or fees; the ability of states to impose fees on broadband is already limited by the congressional Internet tax moratorium. The FCC, however, does not forbear from Sections 201 (prohibiting unreasonable practices), 202 (prohibiting unreasonable discrimination), 208 (for filing complaints), Section 222 (protecting consumer privacy), Sections 225/255/251(a)(2) (ensuring access to services by people with disabilities), Section 224 (ensuring access to poles, conduits and attachments), and Section 254 (promoting the deployment and availability of communications networks (including broadband) to all Americans; except that broadband providers are not immediately required to make universal service contributions for broadband services.

The new rules will not go into effect until they have been published in the Federal Register. That publication also starts the clock for parties that want to file petitions for reconsideration or appeals of this decision. With more than 4 million comments filed in the proceeding, you would have to think someone will not be happy with this Order.

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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.