Cinnamon Mueller Client Updates

 

FCC Establishes Challenge Process for Broadband Providers to Avoid being Overbuilt with CAF Phase I Funding

On August 20, 2013, price cap carriers will notify the FCC of the census blocks where they intend to deploy broadband using funding from the Connect America Fund Phase I.  If you serve any of those census blocks, you’ll want to take advantage of the challenge process to avoid being overbuilt with CAF funds.

            Note:  One method of challenging the National Broadband Map’s designation of a census block as unserved is with Form 477 data.  The next Form 477 is due September 3, 2013 (reporting data as of June 30, 2013).  Form 477 filing information is included at the end of the update. 

Background. The FCC created the Connect America Fund (“CAF”) as part of its efforts to overhaul the universal service system. In the first two phases of CAF, the FCC will provide support to price cap carriers—large telcos like AT&T, Verizon, Windstream, CenturyLink, and FairPoint—that commit to deploying broadband-capable networks in unserved areas of the country.

For purposes of CAF Phase I, an area is treated as unserved if the current version of the National Broadband Map (from June 2012) shows the area as unserved by fixed Internet access with minimum speeds of 3 Mbps downstream and 768 kbps upstream. Implicitly recognizing that some areas of the National Broadband Map are inaccurate or out-of-date, the FCC created a process to challenge an area’s designation as served or unserved.

Challenge Process. In electing to receive CAF Phase I support, price cap carriers must provide a list of census blocks where they propose to use the funds to deploy broadband. Those elections are due on August 20, and the FCC will publish the list soon after.

Once the FCC publishes the list, broadband providers will have 30 days to challenge it by showing that a census block is in fact served by fixed Internet access with speeds of 3 Mbps/768 kbps or higher. Price cap carriers will then have another 30 days to respond to the challenge.

A few other important points to know about the challenge process:

How to challenge a census block’s designation as unserved:  Challengers must submit some form of documented evidence such as:

  • An officer’s certification (signed under penalty of perjury) that the company offers 3 Mbps/768 kbps in the census block.
  • Current customer billing records (redacted to protect customer privacy).
  • Form 477 data.

Price cap carriers can challenge census blocks too:  A price cap carrier can challenge a block’s designation as served, arguing that no providers in the area offer broadband. In that case, the carrier can receive funding for that census block. Competitors have 30 days to respond to the challenge.

The standard of proof:  A challenger must show that it is more likely than not that a challenged census block is incorrectly shown on the National Broadband Map.

More information:  The FCC orders describing the challenge process are available here and here.

What to do now. There are some steps you can take now to prepare for a possible challenge:

  • If you have a list of census blocks that you serve, make sure it is current.  If you don’t have a list, try to prepare one.
  • File Form 477 before September 3, 2013 (reporting data as of June 30, 2013).
  • Watch out for the FCC’s list of census blocks that the price cap carriers propose to serve under CAF Phase I.  It should be released soon after August 20.

Once the FCC releases the list of CAF Phase I census blocks, review it closely and compare it with your list.  If the FCC’s list shows a census block that your company serves with internet speeds of 3 Mbps/768 kbps or higher, consider filing a challenge.

Two more important points. First, price cap carriers can change their deployment plans after their initial elections.  Even if your company is not affected by the initial elections, you’ll want to look out for changes that may affect your service areas.  The FCC will release a public notice with any updated plans. If any change affects a census block you serve, you’ll have 45 days from the public notice date to notify the price cap carrier.

Second, the information above relates to CAF Phase I.  CAF Phase II will have a similar, but more streamlined, challenge process.  Stay tuned for more information on that.

If you have any questions about the CAF or challenge process, please contact Jake Baldwin at (312) 372-3930 or jbaldwin@cinnamonmueller.com.

 

FCC Sets Fiscal Year 2013 Cable Regulatory Fees

 

Announces Changes That Will Begin in Fiscal Year 2014

On August 12, 2013, the FCC issued an Order establishing its FY 2013 Regulatory Fees: 

  • 2013 cable regulatory fee:  Cable systems operating on October 1, 2012 must pay $1.02 per subscriber, a $0.07 increase from 2012. 
  • CARS licenses and permits:  CARS facilities operating on October 1, 2012 must pay $510.00, a $35 increase from 2012, even if the facility’s license expired after October 1, 2012.

 

  • Interconnected VoIP regulatory fee:  $0.00347 for each dollar of interstate and international telecommunications revenue that a provider reports on its Form 499-A. 

The FCC will collect these fees during a filing window in September 2013.  All licensees must use their FRN and password to access the Fee Filer System, and review, create, update, or change the fees owed.  Then, each licensee may decide on a payment method – online payment with a credit card, online payment from a bank account, mailing a check, or sending a wire transfer.  Fee Filer will print a Form 159-E for users who do not wish to pay online. 

This will be the last filing window that licensees may pay regulatory fees by mailing a check.  Beginning October 1, 2013, in FY 2014, the FCC will no longer accept checks and hardcopy Form 159 remittance advice forms to pay regulatory fee obligations.  In addition, the FCC announced that beginning in FY 2014, IPTV providers will be subject to the same regulatory fees as cable providers.  The FCC will include IPTV providers in a new category along with cable providers. 

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

Copyright Forms and Fees Due August 29, 2013

 

Cable operators must file with the U.S. Copyright Office their Statement of Accounts (Form SA1-2 or SA3) and pay any royalty fees due for the January 2013 – June 2013 accounting period by August 29, 2013. The following forms apply:

  • SA1-2 Short Form. For use by cable systems with semiannual gross receipts of less than $527,600. 
  • SA3 Long Form. For use by cable systems with semiannual gross receipts of $527,600 or more.

Copyright royalty fees must be remitted by electronic payment.  If you have any questions about copyright forms or fees, please contact Heidi Schmid at (312) 372-3930 or hschmid@cinnamonmueller.com.

 

FCC Form 477 Due September 3, 2013

The next Form 477 filing is due September 3, 2013 – the normal September 1st deadline falls on a Sunday, and Monday, September 2nd, is a federal holiday (Labor Day).  For this filing, filers must report data as of June 30, 2013.  More information about the Form 477 and Census tracts is available online:

For more information about filing Form 477, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.

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