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:

  • Foreign Ownership Violation by Telecommunications Provider Leads to $50,000 Penalty and Four-Year Compliance Plan
  • Arizona LPFM Station Hit with $20,000 Penalty and $41,500 Suspended Penalty for Underwriting Violations
  • Unauthorized Station Transfers Result in $8,000 Consent Decree

Telecommunications Provider to Pay $50,000 and Implement Four-Year Compliance Plan After Foreign Ownership Violations

A Guam-based telecommunications provider (Telecom Provider) settled an investigation by the Federal Communications Commission (FCC) into its ownership structure by entering into a consent decree that requires a $50,000 payment to the government and implementation of a 48-month compliance plan.  The Telecom Provider holds domestic and international Section 214 authorizations, 84 wireless licenses, three submarine cable licenses, and an earth station satellite license.  The FCC’s investigation concerned the Telecom Provider’s ownership, which includes two foreign corporations and a foreign government’s finance ministry.

Section 310(b)(4) of the Communications Act of 1934, as amended (Act), places a 25 percent limit on ownership by foreign individuals, corporations, and governments in U.S.-organized entities controlling common carrier licensees.  Under the Act, the FCC may permit higher levels of foreign ownership of an FCC licensee if it determines it is not contrary to the public interest.  Since 2013, FCC approval has also been required for any foreign individual or entity not previously approved by the FCC to acquire more than a five percent equity or voting interest in the entity.  These public interest determinations by the FCC incorporate input from a federal Executive Branch review of national security, law enforcement, foreign policy, and trade policy concerns conducted by a multi-agency group known as Team Telecom.

In 2015, the FCC granted an application that allowed the Telecom Provider to have 100 percent foreign ownership consisting of a parent entity two steps up in the ownership chain (Indirect Parent Entity) (owning up to 65.15 percent of the equity and voting interests) and the finance ministry (owning up to 26.95 percent of the equity interests and 41.53 percent of the voting interests).  Five years later, the Indirect Parent Entity commenced a tender offer for outstanding shares in the parent entity directly above the telecom provider (Direct Parent Entity).  Two months later, the Indirect Parent Entity acquired the tendered shares, which increased its indirect ownership interests in the Telecom Provider to 91.46 percent.  At the end of 2020, the Indirect Parent Entity also acquired all shares of the Direct Parent Entity’s common stock held by the remaining minority shareholders, resulting in it owning 100 percent of the equity and voting interests of the Telecom Provider.  These transactions led to the finance ministry having an indirect ownership interest in the Telecom Provider (held through Indirect Parent Entity) of 33.93 percent equity and voting.  The result was higher levels of foreign ownership in the Telecom Provider than had previously been approved by the FCC.

The Telecom Provider attempted to correct the problem by filing a Petition for Declaratory Ruling seeking approval for the Indirect Parent Entity and finance ministry to exceed their previously approved foreign ownership limits.  In late 2021, the International Bureau granted the Petition, but the FCC’s Enforcement Bureau pursued the prior foreign ownership violation, resulting in a Consent Decree with the Telecom Provider.

In addition to paying a $50,000 civil penalty for exceeding the foreign ownership levels approved by the FCC, the Telecom Provider must implement a plan to ensure compliance with the terms of the Consent Decree, including developing a compliance manual, administering employee compliance training, and submitting compliance reports to the Commission for four years regarding foreign ownership compliance.  During that time, the Telecom Provider must also report instances of noncompliance with the FCC’s foreign ownership rules and the terms of the Consent Decree within 15 days of discovering them.

Violations of Noncommercial Broadcast Underwriting Laws Result in $20,000 Penalty and a $41,500 Suspended Penalty for Low Power FM Station

The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Arizona LPFM station to resolve an investigation into violations of the FCC’s rules regarding underwriting.  Under the Consent Decree, the licensee agreed to implement a compliance plan and pay a $20,000 civil penalty, with a suspended civil penalty of $41,500 to be levied in the event of default. Continue reading →

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Pillsbury’s communications lawyers have published the 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:

  • Sports Entertainment Company’s Malfunctioning Microphone Interferes with Public Safety Communications
  • Florida Radio Application Dismissed Over Disclosure Issues
  • Late Issues/Programs Lists and Children’s Television Programming Reports Causes $18,000 Proposed Fine for Maryland Television Station

Notice of Violation Issued After Malfunctioning Wireless Microphone Transmits on Wrong Frequency

A sports entertainment company with dozens of locations across the country received a Notice of Violation from the FCC for causing interference to a city’s licensed wireless operations. FCC field agents investigating interference complaints using direction finding techniques located “drifting” radio emissions in the area and determined that the source was a malfunctioning wireless microphone used by the sports entertainment company in its local operations.

The microphone was causing interference to the city’s 800 MHz communication system, and as noted by the Enforcement Bureau, the sports entertainment company did not hold a license to operate the microphone on that frequency. The city used the 800 MHz facilities for public safety operations, making the interference particularly concerning.

Under the Notice of Violation, the company must respond within twenty days and (1) fully explain each violation, including all relevant surrounding facts and circumstances, (2) include a statement of the specific action(s) taken to correct each violation and prevent recurrence, and (3) include a timeline for completion of any pending corrective action(s). The Notice of Violation also indicated the possibility of further enforcement action “to ensure compliance.”

Applicant Loses Chance at Noncommercial Radio Station After Failing to Make Required Disclosures

An applicant seeking to build a new noncommercial educational (NCE) station in Florida saw its application dismissed after a petition to deny raised disclosure issues with it. The company filed the application in November 2021 during the most recent filing window for new NCE applications. Applicants with applications deemed to be mutually exclusive (MX) are given an opportunity to work together to resolve technical conflicts through settlement arrangements. If the conflicts are not resolved, the FCC compares and analyzes the competing applications and tentatively selects a winning application.

The FCC’s comparative analysis of MX NCE applications generally consists of three main components. When NCE FM applicants in an MX group propose service to different communities, the FCC performs a threshold fair distribution analysis under Section 307(b) of the Communications Act of 1934 to determine if one of the applicants is proposing service to an underserved area. Application conflicts that are not resolved under this “fair distribution” analysis are next compared by the FCC under an NCE point system, which is a simplified, “paper hearing” process. If necessary, the FCC then makes a tie-breaker determination, based on applicant-provided data and certifications. Continue reading →

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Pillsbury’s communications lawyers have published the 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:

  • LPFM Station Fined $15,000 for Airing Commercial Advertisements
  • FCC Issues Notices to the Landowners of Sixteen Pirate Radio Sites
  • Telecommunications Carrier Pays $227,200 To Resolve 911 Outage Investigation

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Pillsbury’s communications lawyers have published the 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:

  • Connecticut Radio Station Risks Losing License Due to Unpaid Regulatory Fees
  • TV Translator Licensee Faces $16,500 Fine for Late License Renewal Applications
  • Voice Call Gateway Provider Accused of Flouting Call Blocking Rules, Faces Further Enforcement Action

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Pillsbury’s communications lawyers have published the 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:

  • Failure to File License Renewal Application Results in Cancelled License
  • Call Provider Receives Cease-and-Desist Letter From FCC for Apparently Transmitting Illegal Robocalls
  • New York Broadcaster Agrees to Consent Decree for Violations Relating to the Public Inspection File

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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:

  • TV Network Draws Proposed Fine of $504,000 for Transmitting False EAS Tones
  • FCC Cites Equipment Supplier for Marketing Unauthorized Devices
  • FCC Proposes $62 Million Penalty Against Wireless Provider for Excessive Connected Devices Reimbursement Claims

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Broadband Providers Required to Display Point of Sale Labels

On November 17, 2022, the Federal Communications Commission (FCC) released a Report and Order (Order) adopting rules requiring broadband internet service providers (ISPs or providers) to prominently display labels disclosing information about broadband prices, rates, data allowances and broadband speeds. The FCC has not yet announced the effective date for ISPs to comply. The Order also includes a Further Notice of Proposed Rulemaking (FNPRM) in which the FCC seeks comment on the format and content of the label, as well as potential future changes. The comment deadline has been extended to February 16, 2023; reply comments are due by March 16, 2023.

Background

In November 2021, President Biden signed the Infrastructure Investment and Jobs Act (Infrastructure Act) into law. Among other things, the Infrastructure Act directed the FCC to create regulations requiring the display of broadband consumer labels that disclose information regarding broadband internet service plans. The label must also “include information regarding whether the offered price is an introductory rate and, if so, the price the consumer will be required to pay following the introductory period.” The FCC was also required to hold public hearings to evaluate (1) how consumers evaluate broadband internet access service plans; and (2) whether disclosures regarding broadband service plans are available and effective.

In response, the FCC released a Notice of Proposed Rulemaking (NPRM) in January 2022 in which it proposed requiring ISPs to disclose information to consumers by displaying labels at the point of sale. The FCC recommended basing the labels on the voluntary labels it previously approved in 2016. In the NPRM, the FCC asked whether broadband services, and consumers’ use of such services, have changed enough to require modifications to the labels.

Consistent with the Infrastructure Act’s mandate, the FCC held public hearings to gather feedback on the content, format and location of the labels. The FCC asked whether the label should vary depending on the consumer’s interaction with the provider, e.g., in person at a store, on the phone or online. Feedback from dozens of comments showed that consumers can be confused by the pricing, terminology and complexity of internet service plans, and most commenters asked the FCC to update the 2016 labels to better help consumers comparison shop for broadband services.

The Label

The FCC’s Order adopted a new, single version of the label (for both fixed and mobile broadband service offerings) and requires providers to display, at the point of sale, a label containing information regarding the provider’s service offerings, prices, introductory rates, data allowances, broadband speeds and whether the provider participates in the FCC’s Affordable Connectivity Program (ACP). The Order defines the format in which the label must appear and the display location. It must also be accessible for people with disabilities and should appear in machine-readable format.

Below is an image of the label template from the FCC’s Order and details outlining the content, formatting and display location requirements:

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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:

  • Violations of Environmental, Historic Preservation, and Tribal Notification Rules Lead to $950,000 Penalty
  • Proposed $300 Million Fine Follows Largest-Ever FCC Robocall Investigation
  • Deceased Licensee’s Estate to Pay $7,000 Penalty for Failing to File Required Applications and Documents

Wireless Provider Pays $950,000 for Violating Environmental, Historic Preservation, and Tribal Notification Rules

A national wireless provider entered into a consent decree with the FCC’s Enforcement Bureau, agreeing to pay $950,000 for violating the FCC’s environmental and historic preservation rules, as well as rules requiring entities to coordinate with relevant state governments and tribal nations in the construction of communications sites.

To resolve the FCC’s investigation, the company admitted to prematurely constructing wireless facilities before completing the required environmental and historic preservation reviews and by constructing wireless facilities without onsite monitoring as requested by the affected tribes.  Under Section 1.1307(a)(4) of the FCC’s Rules, applicants and licensees must assess whether proposed facilities may significantly affect the environment and whether the proposed facilities may affect districts, sites, buildings, structures, or objects that are listed (or eligible for listing) in the National Register of Historic Places, or may affect Native American religious sites.  Applicants must also follow other rules set out by the Advisory Council on Historic Preservation or the National Historic Preservation Act Review Process, as applicable.

By early 2020, the company began deploying newer wireless technology, commonly known as small cells.  Small cell antennas are used to improve wireless service and can be mounted to streetlight poles, utility poles, or even traffic control structures.  During the summer of 2020, the company began constructing the small cell antennas that are the subject of the Consent Decree.  After the company reported concerns regarding its compliance with the environmental rules to the FCC, the Commission opened an investigation and issued a Letter of Inquiry (“LOI”) to the company in January 2022.  The company filed several responses to the LOI throughout 2022.  Ultimately, the Commission determined that the company began and or/completed building wireless facilities in three states prior to, or without completing, the required review process and Tribal notification process.  The FCC also concluded that the company failed to comply with Tribal notification procedures in two states.  While some of the noncompliant construction was found to have been caused by a miscommunication between the company and its third-party contractors, other violations were the result of a company employee who lacked expertise on the National Environmental Policy Act and National Historic Preservation Act requirements.  Before and during the FCC’s investigation, the company stated that it had begun the process of removing any wireless facilities found to have an adverse effect on historic streets. 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:

  • Tower Owners Cited for Unsafe and Improperly Registered Tower
  • FCC Fines LPFM for Unauthorized Operation, Failure to Admit FCC Agents, and EAS Violations
  • Violations of Environmental, Historic Preservation, and Antenna Structure Registration Rules Lead to $38,000 Fine

FCC Cites Owners of Improperly Lit Tower

Owners of an Illinois tower were cited for failing to maintain required obstruction lighting, failing to check the structure’s lighting visually at least once every 24 hours or use an automatic alarm system to detect a lighting outage, failing to notify the FAA of lighting outages, failing to repaint the structure to maintain good visibility, and failing to notify the FCC of a change in ownership of the tower.  Such failures violate Part 17 of the FCC’s Rules, which governs antenna construction, marking, and lighting.  The FCC noted that it may only impose monetary fines against non-regulatees after issuing a citation (as it did here), the violator is given a reasonable opportunity to respond, and the violator subsequently still engages in the conduct described in the citation.  If the owners are later found to remain in violation of the rule provisions detailed in the citation, the FCC may consider both the conduct that led to the citation and the conduct following the citation in assessing a fine.

Following a 2018 complaint reporting a lighting outage for the tower, the FCC asked the FAA to issue a 90-day NOTAM (Notice to Air Missions) alerting pilots of the hazard.  Chicago FCC agents contacted the then-owner of the structure and were told the lighting issues would be corrected.  A field inspection revealed that the structure was over 200 feet in height, that the structure was being used for radio transmissions, that it lacked the required flashing red light, and that the remaining obstruction lighting was extinguished.  The FCC again contacted the structure’s owner and followed up with a Notice of Violation (“NOV”).  There is no record that the owner responded to the NOV.  Future field inspections revealed that the paint on the tower was severely faded and chipped.  An entity leasing the tower and two FCC licensees collocated on it were subsequently contacted in an effort to bring the tower into compliance.

By 2022, the parcel of land on which the tower sits was sold to the current owners.  Two months prior to that sale, an FCC agent again visited the site and observed that the structure had not been repainted and that all of the red obstruction lights were extinguished.  The agent also concluded that no licensees or users were operating from the tower.  Under the applicable FAA advisory, the structure, because it exceeds 200 feet in height, must be painted and have at its top at least one red flashing beacon to ensure an unobstructed view of at least one light by a pilot, along with two or more steady burning red lights mounted at the one-fourth and three-fourth levels of the overall height of the tower, and two red flashing beacons at the mid-level of the structure.  The tower must also be marked with alternate sections of aviation orange and aviation white paint and repainted as necessary.  These safety requirements must be met until the structure is dismantled, even if the tower is no longer being used for transmissions.  The FCC noted that any lighting outage must be reported to the FAA, and that failing to update the tower’s Antenna Structure Registration interferes with the FCC’s ability to identify the owner when attempting to remedy lighting outages.

The current owners of the tower must respond to the citation within 30 days and provide a written statement describing how they acquired the tower, provide a copy of any agreements regarding conveyance of the structure, provide current antenna structure ownership information, describe the actions they have taken to prevent future violations of the FCC’s rules, and provide a timeline by which they will complete any corrective actions.

LPFM Station Fined $25,000 for Unauthorized Operation, Failure to Admit FCC Agents, and Violating EAS Rules

Following an October 2020 Notice of Apparent Liability for Forfeiture (“NAL”), a Florida low power FM licensee must now pay $25,000 after the FCC found no reason to change the originally proposed fine amount.  The Commission found that the licensee violated Section 301 of the Communications Act (failing to operate a station in accordance with its license) and Sections 73.840 (operating a station outside of the permitted transmitter power output parameters), 73.845 (maintaining an LPFM station in compliance with the LPFM technical rules), 73.878(a) (making a broadcast station available for inspection by FCC representatives), and 11.11(a) (participation by broadcast stations in the Emergency Alert System (“EAS”)) of the FCC’s Rules. Continue reading →

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The FCC released its Report and Order adopting the final amounts that regulatees must pay in annual regulatory fees for FY2022, and opened the filing window for making those payments. The window closes at 11:59 p.m. Eastern Time on September 28, 2022.

If paying the fees wasn’t challenging enough, as part of its continuing rollout of the Commission Registration System (CORES), the FCC has retired the familiar Fee Filer system that regulatees previously used to make these payments. As a result, regulatory fee payments must now be made through CORES, meaning that payors will have to contend with a new fee filing system for this year’s regulatory fees. Given the initial reactions of some that attempted to submit their regulatory fees since the window first opened, regulatees would be wise to start the process early, ensuring they have enough time to deal with the inevitable filing hiccups and still meet the September 28, 2022 deadline.

In the past, a party owing regulatory fees signed into the FCC’s Fee Filer system using the Federal Registration Number (FRN) of the licensee and the password established for that FRN. If a filer lost either the FRN or password they had used in prior years to pay the station’s fees, they could create a new account or reset the password on the spot to get their payments on file in a timely manner. The new filing system, however, uses a more cumbersome two-step process that is not conducive to overcoming last-minute issues involving a lost FRN or password, and has the potential to trip up those unaccustomed to it.

This is the same two-step process that broadcasters first had to navigate to file their Forms 1, 2 and 3 in the EAS Test Reporting System (ETRS) in connection with nationwide tests of the EAS, which we wrote about back in 2017. That two-step process proved difficult for many and prevented some broadcasters from timely making their required filings, so we are describing the individual steps in detail below. However, stations should also be aware that if their engineer or lawyer completed this process in connection with the ETRS filings in 2017, they may now be considered by the FCC’s system as the Administrator of the licensee’s FRN.  If so, they will need to be consulted to get the station’s regulatory fees on file this year.

To begin the process, the individual making the regulatory fee payment on behalf of the licensee must create a personal account in CORES here using their email address and a password of their choosing. This account is personal to the filer, not the licensee, and identifies who is making the filing on the licensee’s behalf.

Next, the filer must sign in to CORES here using that new account and choose the option to “Associate Username to FRN” on the main screen to be able to make filings under the licensee’s FRN. As noted, if someone else has already done this, that person will be the Administrator and must grant the “associate” request before the submission can proceed, delaying the regulatory fee filing until that person responds to a request to approve the association (assuming they respond at all if they have retired, departed, etc.).

Once the filer’s account is associated with the licensee’s FRN, the filer must sign into CORES and select the “Manage Existing FRNs/FRN Financial/Bill and Fees” option on the main screen.

On the next screen, they must select the “Regulatory Fee Manager” option.

Finally, they need to select the licensee’s FRN from a dropdown list of all FRNs associated with the account and click the “Find Assessments” button. The next screen should display the licensee’s name and a total fee due amount.

Licensees should click the link labeled “View” to see the details of what stations and fees are included in the total shown. Errors in importing prior year data are common, especially where a licensee has used multiple FRNs in the past, and early reports indicate that the system-generated fee totals are sometimes missing stations, putting those licensees at risk of interest and penalties if they do not add the missing stations/fees before filing. If fees or stations are missing, the licensee must click the button labeled “Add More Manually” to add the missing stations/fees. If all fees are accounted for, the filer clicks on the “Continue to Pay” button to complete the payment process.

As for the fee amounts themselves, broadcasters can review the Commission’s Media Services Regulatory Fees Factsheet summarizing the fees due in each Media Service category and look up the fees due for individual broadcast call signs here. The FCC notes that “[i]n some instances, it may be necessary to clear your browser before logging onto the website” to look up fees. Fees for authorizations in other services such as transmit earth stations can be found in the Factsheets for those services on the FCC’s regulatory fee page here. Information about seeking deferrals or exemptions from paying the fees (for those who might qualify) can be found here.

The bottom line is that broadcasters should act quickly to begin the FY2022 regulatory fee payment process because it will look very different from how it appeared in the past, and late or missed payments can incur significant interest and penalties.