Cinnamon Mueller Client Updates

 

FCC Sets Fiscal Year 2014 Cable Regulatory Fees

On August 29, 2014, the FCC released an Order establishing its FY 2014 Regulatory Fees: 

  • 2014 Cable/IPTV regulatory fee:  Cable systems and IPTV providers operating on October 1, 2013 must pay $0.99 per subscriber, a $0.03 decrease from 2013. 
  • CARS licenses and permits:  CARS facilities operating on October 1, 2013 must pay $605.00, a $95 increase from 2013, even if the facility’s license expired after October 1, 2013.
  • Interconnected VoIP regulatory fee:  $0.00343 for each dollar of interstate and international telecommunications revenue that a provider reports on its Form 499-A. 

Simultaneously, the FCC announced that regulatory fee payments must be made no later than 11:59 p.m., Eastern Daylight Time, on September 23, 2014.

All licensees must use their FRN and password to access the Fee Filer System, and review, create, update, or change the fees owed. 

Note:  The FCC no longer accepts checks and hardcopy Form 159 remittance advice forms to pay regulatory fee obligations.  Accordingly, each licensee must make its regulatory fee payments online with a credit card, online from a bank account, or by sending a wire transfer.  For payments by wire, a Form 159 should still be faxed so that the FCC can associate the wire payments with the correct regulatory fee information. 

If you have any questions about regulatory fee payments, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.

Time Warner Cable Enters into Consent Decree with FCC

Resolves Investigation into Outage Report Violations

On August 25, the FCC’s Enforcement Bureau entered into a Consent Decree with Time Warner Cable (“TWC”) resolving its investigation into whether TWC complied with the FCC’s network outage reporting violations.  The investigation stemmed from Time Warner’s failure to file a required Final Report in connection with a Voice over Internet Protocol (“VoIP”) outage, and once opened, revealed additional reporting violations.  As part of the Consent Decree, Time Warner will pay a civil penalty to the U.S. Treasury in the amount of $1.1 million.  

Background.  Under FCC regulations, communications providers (wireline, wireless, satellite, cable, and Interconnected VoIP) must report certain disruptions to their networks to the FCC.  Interconnected VoIP providers must submit an electronic notification (through the Network Outage Reporting System web-based filing system) to the FCC:

  • Within four hours of discovering an outage of at least 30 minutes duration that potentially affects a 911 special facility.  In addition, the VoIP provider also must notify by telephone or other electronic means the designated contact at the affected 911 facility and convey all relevant information.
  • Within 24 hours of discovering an outage of at least 30 minutes duration that (i) potentially affects at least 900,000 user minutes of interconnected VoIP service and results in complete loss of service; or (ii) potentially affects any special offices and facilities (includes major military installations, key government facilities, nuclear power plants or airports).

Investigation and Consent Decree.  In September 2013, the FCC’s Public Safety and Homeland Security Bureau notified TWC that it failed to the file a Final Report in connection with a VoIP network outage for which TWC had timely filed a required notification.  Further investigation by the Bureau revealed that TWC had failed to file a substantial number of other required outage filings, for both wireline and VoIP network outages.  Upon learning of the overdue filings, TWC submitted them by November 8, 2013, but also admitted its initial failure to timely file them.

In addition to the $1.1 million civil penalty, the Consent Decree requires that TWC develop and implement a compliance plan, including new operating procedures, a compliance manual, a compliance training program, and monthly reviews of Time Warner’s reports.  Time Warner must also appoint a compliance officer, and follow these new procedures for three years. 

The Order and penalty is a strong reminder to VoIP providers that they need to have effective compliance plans and operating procedures in place for tracking and reporting applicable network outages.

For more information about outage reporting obligations, or for assistance in setting up compliance guidelines, please contact Scott Friedman or Jake Baldwin at (312) 372-3930 or sfriedman@cinnamonmueller.com or jbaldwin@cinnamonmueller.com.

 Verizon to Pay Record $7.4 Million to Settle Consumer Privacy Investigation

On September 3, 2014, the FCC’s Enforcement Bureau entered into a Consent Decree with Verizon to settle accusations that the company had misused its customer’s personal information for marketing purposes. 

The settlement requires Verizon to make a $7.4 million payment to the U.S. Treasury, a record amount in FCC history for settling an investigation related solely to privacy violations.  The Consent Decree also requires Verizon to enter into a three year compliance program monitored by the FCC.

The Commission had alleged that Verizon had failed to notify approximately two million new customers of their privacy rights related to customer proprietary network information (“CPNI”).  Verizon had chosen to use an opt-out method of obtaining consent from new customers to use their CPNI for certain limited marketing purposes allowed under FCC regulations.  The FCC determined, however, that beginning in 2006 and continuing for several years after, Verizon had failed to send the opt-out notices to approximately two million subscribers.

The Communication Act and FCC regulations require that phone companies, including providers of interconnected VoIP service, protect the privacy of CPNI.  Phone companies wanting to use CPNI for limited marketing purposes must first get explicit written permission from their customers either through an opt-in or opt-out process, depending on the type of CPNI involved.

As a result of consent decree, Verizon will have to include opt-out notices on every bill, not just the first bill, and put systems in place to monitor and test its billing systems and opt-out notice process.  Any problems or noncompliance found must be reported to the FCC within five days.

To avoid the possibility of similar FCC enforcement action, companies that operate an interconnected voice service should ensure that their CPNI policies are up to date and compliant with the rules, and check their company’s practices to ensure that the CPNI policies are being followed.  In addition, FCC regulations also require an Officer’s Certificate to be filed with the FCC each spring certifying that operating procedures assuring compliance are in place and have been followed.  If you have any questions regarding CPNI, and the FCC’s regulations, please contact Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com or Noah Cherry at (202) 872-0234 or ncherry@cinnamonmueller.com.

FCC Publishes Rural Broadband Experiments Application Procedure

On August 19, 2014, the FCC published the official process that applicants must follow to apply for funding under the FCC’s Rural Broadband Experiments (“The Experiments”) program.  Applications are due on October 14, 2014 and must be submitted through the FCC’s online auction system.

The FCC’s Rural Broadband Experiments program aims to provide up to $100 million in Connect America (“CAF”) funding to build voice and broadband capable infrastructure in rural areas.  The areas eligible for funding have been traditionally served by price cap carriers, but have been since designated as unserved by an entity that provides both voice and broadband service.  To be eligible for funding from The Experiments, applicants must submit competitive bids designating how much of the CAF funding designated for each unserved census block they would need to offer voice and broadband service to all designated locations listed in that census block.  The Commission will then select and fund the applications that are most cost effective, i.e., the applications that serve the most locations using the least amount CAF funding, as compared against all applications nationwide.

The FCC has laid out specific speed, quality, and price requirements that the service provider must meet in order to be qualified, including offering an interconnected voice service, download/upload speeds of 25 Mbps/5 Mbps, 10 Mbps/1 Mbps, or 4 Mbps/1Mbps for certain very high costs areas, latency requirements of 100m, and prices that fall within the Commission’s designated price benchmarks.

Potential applicants can also use this opportunity to assess the current status of their service area and prepare to possibly participate in the eventual CAF Phase II reverse-auction for areas where price cap carriers decline CAF funding.  If you have any questions regarding the CAF process, please contact Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com or Noah Cherry at (202) 872-0234 or ncherry@cinnamonmueller.com