News Update - September 2019
FCC Ready To Authorize CAF II Auction Support For 566 Winning Bids
September 30, 2019 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize Connect America Fund Phase II auction for 566 winning bids. Three broadband providers account for the 566 winning bids: Cherokee Telephone Company (five winning bids in Oklahoma); Horry Telephone Cooperative, Inc. (three winning bids in South Carolina); and Viasat Carrier Services, Inc. (winning bids in various states). A list showing the winning bids is available as Attachment A to the Bureau’s Public Notice. Before the long-form applicants receive the total 10-year support amounts associated with their winning bids, the applicants must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on Tuesday, October 15, 2019. In a future public notice, the Bureau will authorize support for specific winning bids for which all requirements have been met.
Additionally, the Bureau has announced it has waived the requirement that CAF II auction long-form applicants certify that they are eligible telecommunications carriers (ETCs) on or before February 25, 2019, for satellite provider Viasat Carrier Services, Inc., with respect to Viasat’s ETC designation in the states of Georgia, Idaho, Kentucky, Louisiana, Maine, Montana, and Wisconsin. The FCC previously explained that it would presume a CAF II auction long-form applicant has undertaken good faith efforts to obtain ETC designation if the applicant submitted an ETC petition to the relevant authority within 30 days of the release of the Auction 903 Closing Public Notice. Because Viasat filed petitions for ETC designation with the respective state regulatory commissions within the 30-day time frame, the Bureau concluded Viasat demonstrated due diligence and acted in good faith.
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New Traffic Pumping Rules! FCC Adopts New ICC Rules Intended To Crack Down On Access Arbitrage Schemes
September 27, 2019 – The FCC has adopted a Report and Order with new intercarrier compensation rules intended to stop certain access charge arbitrage schemes that seek to take advantage of access charges that have not yet transitioned or are not transitioning to bill-and-keep, as required by the 2011 USF/ICC Transformation Order. Such arbitrage schemes are structured to ensure that IXCs pay high tandem switching and tandem switched transport charges to access-stimulating LECs and to intermediate access providers chosen by access-stimulating LECs. The new ICC rules adopted in the FCC’s Report and Order make access-stimulating LECs – instead of IXCs – financially responsible for tandem switching and transport service access charges associated with the delivery of traffic from an IXC to the access-stimulating LEC end office or its functional equivalent whether terminated directly or indirectly. Also, the FCC has modified the definition of access stimulation to include situations in which an access-stimulating LEC does not have a revenue sharing agreement with a third party. There are different “triggers” for competitive LECs and rate-of-return LECs. First, competitive LECs with an interstate terminating-to-originating traffic ratio of at least 6:1 in a calendar month will be defined as engaging in access stimulation. Second, a rate-of-return LEC is considered to be engaging in access stimulation if it has an interstate terminating-to-originating traffic ratio of at least 10:1 in a three calendar month period and has 500,000 minutes or more of interstate terminating minutes-of-use per month in an end office in the same three calendar month period. The changes to the FCC’s rules contained in the Report and Order will be effective 30 days after their publication in the Federal Register, except for two sections – 51.914(b) and 51.914(e) – which require Office of Management and Budget review.
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Locast Answers Broadcasters’ Copyright Infringement Lawsuit, Hits Back With Counterclaims Alleging Antitrust Violations
September 26, 2019 – Free online streaming service provider Locast has answered the copyright infringement lawsuit filed against it by a group of U.S. broadcast television networks. The broadcasters sued Locast in July 2019, alleging unauthorized transmissions of their copyrighted works. In its answer, Locast generally argues that as a 501(c)(3) non-profit organization, it fits squarely within the Congressionally-designated exception to infringement in Section 111(a)(5) of the Copyright Act, and therefore may retransmit local over-the-air broadcasts to the public. Whether Locast’s service falls within this “non-profit exemption” is what the lawsuit is all about. Here are a few highlights from Locast’s answer:
Every American has the right to access broadcast television for free.
The broadcasters’ claims are objectively baseless and constitute an unlawful sham.
This case involves the application of unambiguous statutory language.
Although Locast’s service was launched in January 2018, the broadcasters delayed filing suit, or raising any legal concerns whatsoever, until July 2019.
A large portion of the fees paid by the public for access to television programming that was intended to be free is handed over to broadcasters in the form of retransmission consent fees.
Broadcasters have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The pay TV providers get rich. Broadcasters get rich. The public gets fleeced.
Locast’s counterclaims are largely an attack on the current retransmission consent system, and allege broadcasters use retransmission consent to harm competition, consumers, and Locast’s service. Locast says the counterclaims “arise from the broadcasters’ unlawful and collusive efforts to stifle competition in the retransmission of over-the-air broadcasts and to entrench the interests of the four largest television networks and their stations at the expense of consumers.” Here are the six claims made by Locast against the broadcasters:
Count I: Conspiracy In Restraint Of Trade In Violation Of § 1 Of The Sherman Act
Count II: Violation Of The Donnelly Act (N.Y. Gen. Bus. Law § 340)
Count III: Violation Of N.Y. Gen. Bus. Law § 349
Count IV: Unfair Competition In Violation Of Cal. Bus. & Prof. Code § 17200, Et Seq.
Count V: Unlawful Competition In Violation Of Cal. Bus. & Prof. Code § 17200, Et Seq.
Count VI: Tortious Interference With Prospective Economic Advantage
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FCC Approves CBRS Auction Bidding Procedures Public Notice
September 26, 2019 – The Federal Communications Commission approved the release of a Public Notice to seek comment on proposed application and bidding procedures for the auction of Priority Access Licenses (PALs) in the 3550-3650 MHz portion of the 3.5 GHz Band – a/k/a the Citizens Broadband Radio Service band. PALs will be licensed on a county-by-county basis, with each PAL consisting of a 10 megahertz channel. The Public Notice proposes to offer seven PALs in each county-based license area, for a total of 22,631 PALs nationwide. Each PAL will have an initial 10-year term. Licensees will be required to meet a substantial performance requirement by the end of the initial license term in order to qualify for a renewal term. The bidding procedures Public Notice will also seek comment on the following: Using an ascending clock auction format, in which bidders indicate their demand for generic license blocks in specific counties; Offering bidders the option to bid at a Cellular Market Area (CMA) level in the 172 CMAs that are classified as Metropolitan Statistical Areas and comprise multiple counties; and Incorporating an “activity upper limit” that would allow bidders to submit bids that exceed their current bidding eligibility, to help mitigate the possibility of losing bidding eligibility under certain circumstances. Additionally, the notice will seek comment on other typical spectrum auction rules, including bidding credit caps, upfront payments, bidding eligibility, minimum opening bids, bid removal and withdrawal, and other procedures. Bidding in the auction – designated as Auction 105 – is scheduled to begin on June 25, 2020.
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National Lifeline Eligibility Verifier To Soft Launch In Nine States On October 11
September 26, 2019 – The FCC’s Wireline Competition Bureau has announced that the National Lifeline Eligibility Verifier will soft launch on October 11, 2019 in Alabama, Arkansas, Louisiana, Maryland, Massachusetts, New Jersey, Oklahoma, Puerto Rico, South Carolina, and Washington. During the soft launch, Lifeline providers will have access to the National Verifier, allowing them to become familiar with the system and adjust and test their processes before use of the National Verifier becomes mandatory. They will also have access to a pre-production test environment to conduct sample transactions and train employees. As explained in the Bureau’s Public Notice, Lifeline providers in Alabama, Arkansas, Louisiana, Maryland, Massachusetts, New Jersey, Oklahoma, Puerto Rico, South Carolina, and Washington should not begin any recertifications for Lifeline subscribers as of October 11, 2019 and should finish any currently open recertifications for Lifeline subscribers in these states no later than December 17, 2019. The Universal Service Administrative Company (USAC) will begin using the National Verifier to re-verify the eligibility of existing Lifeline subscribers in those states during the soft launch period, and expects the reverification process to continue after the full launch date. Lifeline providers can find additional information on USAC’s National Verifier Launch Page.
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Secure and Trusted Communications Networks Act Would Ban Huawei & ZTE Equipment, Fund Removal
September 24, 2019 – A bipartisan group of members of the U.S. House of Representatives have introduced the Secure and Trusted Communications Networks Act of 2019. The bill, H.R. 4459, would prohibit Federal funds from being used to purchase communications equipment or services posing national security risks. Such equipment or services would be those produced or provided by Huawei Technologies Co. Limited, Zhongxing Telecommunications Equipment Corporation (ZTE), any subsidiary or affiliate of Huawei or ZTE, and any other entity determined to pose a risk. The bill would also establish a Secure and Trusted Communications Networks Reimbursement Program, administered by the Federal Communications Commission, to fund the replacement of communications equipment or services posing national security risks. It would reimburse providers of advanced communications services that have 2,000,000 or fewer customers and meet certain certification requirements. The bill would appropriate $1 billion for fiscal year 2020 to carry out the program, with the funding to remain available through fiscal year 2029. The Secure and Trusted Communications Networks Act of 2019 is sponsored by Energy and Commerce Chairman Frank Pallone Jr. (D-NJ) and Ranking Member Greg Walden (R-OR), along with Representatives Doris Matsui (D-CA) and Brett Guthrie (R-KY). It has been referred to the House Committee on Energy and Commerce.
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Lifeline Fraud Alert! Sprint Allegedly Received Tens Of Millions In Lifeline Support, But Provided No Service
September 24, 2019 – According to a Federal Communications Commission News Release, nationwide wireless provider Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service. The 885,000 subscribers accounts for roughly 10% of the entire Lifeline program’s subscriber base, and is nearly 30% of Sprint’s Lifeline subscriber base. Sprint apparently violated the Lifeline Program’s “non-usage” rule, which applies to mobile wireless Lifeline service that, after applying the $9.25 monthly Lifeline support amount, is provided free to consumers. The non-usage rule states that Lifeline providers shall only receive Lifeline support reimbursements for service provided to subscribers who have used the Lifeline service within the last 30 days. The FCC’s News Release explains that program-wide, the non-usage rule resulted in approximately 3.1 million de-enrollments from the Lifeline Program in 2018. The FCC has not yet released a formal Notice of Apparent Liability charging Sprint for the violations.
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Full Launch! National Lifeline Eligibility Verifier Use Required For All New Lifeline Enrollments In Eleven States
September 23, 2019 – The FCC’s Wireline Competition Bureau has announced the full launch of the National Lifeline Eligibility Verifier for all new enrollments in Arizona, Connecticut, Georgia, Iowa, Kansas, Nebraska, Nevada, New York, Vermont, Virginia, and West Virginia. Starting on October 23, 2019, eligible telecommunications carriers (ETCs) in these eleven states will be required to use the National Verifier’s eligibility determination process for all consumers applying for Lifeline services and must cease using legacy eligibility processes for prospective Lifeline subscribers. The Universal Service Administrative Company (USAC) will continue after October 23, 2019 to verify that subscribers in the National Verifier for these eleven states are eligible to receive Lifeline services through the process that was initiated during the Verifier’s soft launch on June 25, 2019. Additionally, annual recertification will now be conducted by the National Verifier for all Lifeline consumers in these eleven states. More information is available from the Bureau’s Public Notice.
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Alaska Regulatory Commission Considers Early Termination Of State Universal Service Fund
September 20, 2019 – The Regulatory Commission of Alaska is considering whether to close the Alaska universal service fund early because it “is running out of money.” The fund is currently scheduled to end in 2023. Alaska’s state universal service fund was established in December 1998 to promote the efficiency, availability, and affordability of basic universal telephone service in Alaska. It is financed through surcharge fees applied to phone service provided in Alaska. Every year, the Alaska Universal Service Administrative Company calculates the surcharge factor used to fund the program for the coming year and submits the proposed surcharge for review by the Alaska Regulatory Commission. The Alaska universal service fund grew from $3.5 million in 1999 (with 1.8% surcharge factor) to approximately $27.5 million in 2016 (with a 14.2% surcharge factor at year-end). In 2018, the fund disbursed $29.5 million to Alaska telecom companies. In August 2018, the Regulatory Commission of Alaska made significant revisions to the fund, including Capping the fund’s surcharge at 10%; Eliminating the State Lifeline and Link Up support programs; Initiating a two-year phasedown of a support program that addressed switching costs for several rural carriers; Revising Carrier of Last Resort and Carrier Common Line support, and freezing that support at historic 2016 values, and eliminating all such support for newly defined “non-remote” areas of Alaska; and Terminating the fund in its entirety on June 30, 2023, with a mandatory comprehensive review two years before the termination date to determine the future of the fund. The Regulatory Commission of Alaska is consider a number of options for terminating the fund earlier, but has not yet taken action.
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FCC Final Agenda For September 2019 Open Meeting
September 19, 2019 – FCC Chairman Ajit Pai has released the final agenda for the FCC’s open meeting set for Thursday, September 26, 2019. It contains the following items:
The Uniendo a Puerto Rico Fund and Connect USVI Fund – The FCC will consider a Report and Order that would allocate $950 million in fixed and mobile high-cost universal service support for Stage 2 of the Uniendo a Puerto Rico Fund and the Connect USVI Fund to expand, improve, and harden communications networks in Puerto Rico and the U.S. Virgin Islands. The Commission will also consider an Order on Reconsideration that would dispose of two petitions related to Uniendo a Puerto Rico Fund and Connect USVI Fund advance support and Stage 1 support. (WC Docket Nos. 18-143, 10-90, 14-58)
Eliminating Access Arbitrage – The FCC will consider a Report and Order and Modification of Section 214 Authorizations that would adopt reforms to eliminate wasteful access arbitrage schemes and promote the efficient use of the nation’s communications networks. (WC Docket No. 18-155)
3.5 GHz Auction Procedures – The FCC will consider a Public Notice that would seek comment on procedures to be used for Auction 105, the auction of Priority Access Licenses (PALs) in the 3550-3650 MHz band. (AU Docket 19-244)
Public Notice of the Filing of Broadcast Applications Rules – The FCC will consider a Further Notice of Proposed Rulemaking that would propose to modernize and simplify the written and on-air public notices broadcasters must provide upon the filing of certain applications. (MB Docket Nos. 17-264, 17-105, 05-6)
Updating and Streamlining Rules for the Direct Broadcast Satellite Service – The FCC will consider a Report and Order that would align the Direct Broadcast Satellite licensing procedures with those of the geostationary orbit fixed-satellite service satellites. (IB Docket No. 06-160)
The FCC’s September open meeting is scheduled to begin at 10:30 a.m. EDT in the FCC meeting room at the FCC’s headquarters in Washington, D.C. The meeting is open to the public, and will be streamed live at fcc.gov/live.
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Lifeline Program: FCC Establishes Automated Connection Between Medicaid Program And Lifeline National Eligibility Verifier
September 18, 2019 – The FCC has announced that it has established a nationwide automated connection between the Medicaid program and the Lifeline National Eligibility Verifier. The connection between the Medicaid and Lifeline databases means that the eligibility of up to 60% of the Lifeline-eligible population can be confirmed automatically by the National Verifier. This will streamline the Lifeline eligibility process for both subscribers and service providers, and result in more effective protection against waste, fraud, and abuse. The National Eligibility Verifier, created in 2016, operates as an independent third-party eligibility verification process for Lifeline subscribers. To date, the National Verifier has launched in 38 states and territories, and expects to go live in the rest of the U.S. by the end of the 2020. The FCC has established automated connections with the Department of Housing and Urban Development and with twelve states, and is working to establish more automated connections with other existing state and federal programs.
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FCC Grants ETC Designation To Viasat In CAF II Auction Areas In Alabama, California, Florida & West Virginia
September 18, 2019 – The FCC’s Wireline Competition Bureau has designated satellite provider Viasat Carrier Services, Inc. as an eligible telecommunications carrier (ETC) in areas within Alabama, California, Florida, and West Virginia where Viasat is authorized to receive Connect America Fund Phase II auction support. The Bureau granted Viasat’s ETC request after concluding that Viasat meets the eligibility requirements to receive universal service support, as set forth in the Communications Act of 1934 and related FCC rules. Additionally, the Bureau waived, on its own motion, the requirement that CAF Phase II auction winners submit proof of ETC designation on or before February 25, 2019.
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FCC Approves Nexstar / Tribune Merger
September 16, 2019 – By a vote of 3-2, the Federal Communications Commission has approved Nexstar Media Group, Inc.’s purchase of Tribune Media Company’s broadcast stations. The merger results in the largest local broadcast television station ownership group in the U.S. As part of the transaction, the FCC approved the divestiture of broadcast stations in certain markets to Scripps Broadcast Holdings, LLC; TEGNA Broadcast Holdings, LLC; and CCB License, LLC. The divestitures were necessary for Nexstar to come into compliance with the FCC’s local and national television ownership rules. According to the FCC’s news release, the FCC found that the proposed merger would provide several public interest benefits to viewers of current Tribune and Nexstar stations. For example, viewers would benefit from their local stations having increased access to Nexstar’s Washington, DC, news bureau and state news bureaus. Additionally, Nexstar demonstrated that it would invest savings resulting from the merger into its stations, including investments in ATSC 3.0, the next-generation television broadcast standard.
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USF Contribution Factor Reaches 25 Percent For Fourth Quarter Of 2019 – Another New Record!
September 12, 2019 – The Federal Communications Commission’s Office of Managing Director (OMD) has announced that the proposed universal service fund (USF) contribution factor for the fourth quarter of 2019 will be 25 percent, a new record high. The 25 percent contribution factor breaks the previous all-time high USF contribution factor of 24.4 percent, which was used for the third quarter of 2019. This gives 2019 the highest yearly average USF contribution factor ever – 22.05 percent. Below are the universal service contribution factors for each quarter of 2019-2016, along with the yearly average:
2019: Q1-20; Q2-18.8; Q3-24.4; Q4-25
2019 Average: 22.05
2018: Q1-19.5; Q2-18.4; Q3-17.9; Q4-20.1
2018 Average: 18.97
2017: Q1-16.7; Q2-17.4; Q3-17.1; Q4-18.8
2017 Average: 17.5
2016: Q1-18.2; Q2-17.9; Q3-17.9; Q4-17.4
2016 Average: 17.85
For the fourth quarter of 2019, the Universal Service Administrative Company (USAC) projects $11.017439561 billion in total interstate and international end-user telecommunications revenues will be collected. USAC estimates that $2.184230 billion will be needed to cover the total demand and expenses for all Federal universal service support mechanisms in the fourth quarter of 2019. If the FCC takes no action on the proposed USF contribution factor within 14 days, it will be declared approved. Historical information on quarterly universal service fund contribution factors is available online from the FCC.
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Fifth Wave: FCC Authorizes $112 Million In CAF II Auction Funding
September 12, 2019 – The FCC’s Wireline Competition Bureau has authorized $112,183,454.30 in Connect America Fund Phase II auction support for 1,031winning bids. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of September 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage at https://www.fcc.gov/auction/903. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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FCC Releases New Broadband Deployment Data
September 10, 2019 – The FCC’s Office of Economics and Analytics, Wireline Competition Bureau, and Wireless Telecommunications Bureau have released updated data on fixed broadband deployment and mobile voice and broadband deployment as of June 30, 2018. The updated broadband deployment data was compiled from FCC Form 477 filings. The fixed broadband data includes revisions made by Form 477 filers through August 28, 2019, while the mobile deployment data includes revisions made through April 8, 2019. Information on fixed broadband deployment is available at www.fcc.gov/general/broadband-deployment-data-fcc-form-477, and can be viewed on the National Broadband Map. Information on mobile broadband deployment is available at www.fcc.gov/mobile-deployment-form-477-data. Additional information on FCC Form 477 data is available on the Form 477 resources webpage.
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House Communications & Technology Subcommittee To Convene Hearing On Broadband Mapping
September 7, 2019 – The House Energy and Commerce Committee’s Subcommittee on Communications and Technology will hold a legislative hearing entitled “ Legislating to Connect America: Improving the Nation’s Broadband Maps” on September 11, 2019, at 10:30 am. The following witnesses have been invited to testify: James M. Assey, EVP, NCTA—The Internet & Television Association; Shirley Bloomfield, CEO, NTCA—The Rural Broadband Association; Dana J. Floberg, Policy Manager, Free Press & Free Press Action; Jonathan Spalter, President and CEO, USTelecom Association; Grant Spellmeyer, Vice President, Federal Affairs & Public Policy, U.S. Cellular; and James W. Stegeman, President/CEO, CostQuest Associates. The hearing will cover recent FCC efforts to improve broadband maps, as well as the following proposed federal legislation on broadband mapping: H.R. 2643 (Broadband Mapping After Public Scrutiny Act of 2019); H.R. 3162 (Broadband Data Improvement Act of 2019); H.R. 4128 (Map Improvement Act of 2019); H.R. 4299 (Broadband Deployment Accuracy and Technological Availability Act); H.R. 4227 (Mapping Accuracy Promotion Services Act).
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FCC Fines AMG $100,000 For Prohibited Communications During CAF II Auction
September 6, 2019 – The FCC’s Enforcement Bureau has proposed a forfeiture of $100,000 against AMG Technology Investment Group, LLC (AMG), for apparently repeatedly engaging in prohibited communications of its bidding and bidding strategies during the Connect America Fund (CAF) Phase II auction, and its failure to timely report such prohibited communications. AMG, which provides service as NextLink, was a CAF II auction winning bidder in six states: Kansas, Illinois, Iowa, Nebraska, Oklahoma, and Texas. AMG was awarded CAF II auction support amounting to $281 million over 10 years, in exchange for deploying broadband services to 100,581 total locations.
According to the FCC’s Notice Of Apparent Liability For Forfeiture, AMG engaged in prohibited communications of its bidding, bidding strategies, and bidding results to AT&T Services, Inc. (AT&T), the parent company of CAF Phase II auction applicant New Cingular Wireless PCS, LLC, and reported the prohibited communications to the FCC outside of the required five-day reporting period. During the auction’s quiet period, one of AMG’s authorized bidders “sent more than a half-dozen e-mails to AT&T, including management-level personnel, discussing AMG’s [CAF II auction] bids, its bidding strategies, and bidding results.” AMG subsequently engaged in prohibited communications with AT&T following the close of the auction. AMG has 30 days to pay the full amount or file a written statement seeking reduction or cancellation of the proposed forfeiture.
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FCC Fines AT&T $75,000 For Prohibited Communications During CAF II Auction
September 6, 2019 – The FCC’s Enforcement Bureau has proposed a forfeiture of $75,000 against AT&T Services, Inc., for apparently repeatedly engaging in prohibited communications during the Connect America Fund (CAF) Phase II auction, and its failure to timely report such prohibited communications. According to the FCC’s Notice Of Apparent Liability For Forfeiture, AT&T, the parent company of CAF II auction applicant New Cingular Wireless PCS, LLC, apparently violated the FCC’s rules by engaging in prohibited communications with AMG Technology Investment Group, LLC during the auction. More specifically, during the CAF II auction’s quiet period, AT&T received and responded to more than a half-dozen e-mails sent to various AT&T employees by AMG personnel, including one of AMG’s authorized bidders. The e-mails discussed AMG’s bidding, bidding strategies, and bidding results, and AT&T and AMG also met in person and by video conference within the quiet period and discussed CAF II auction related business opportunities. In a separate action, the FCC’s Enforcement Bureau proposed a forfeiture of $100,000 against AMG for these prohibited communications. AT&T has 30 days to pay the full amount or file a written statement seeking reduction or cancellation of the proposed forfeiture.
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FCC Releases Business Data Services Tariff Review Plan For Rate-Of-Return Carriers
September 6, 2019 – The FCC’s Wireline Competition Bureau has released a tariff review plan for use by rate-of-return carriers that have elected incentive regulation for their business data services (BDS) offerings. It is available for download at https://www.fcc.gov/tariff-review-plan-incentive-regulation-rate-return-carriers. Those rate-of-return carriers that have elected incentive regulation must file tariff review plans reflecting any exogenous cost adjustment for Telecommunications Relay Service (TRS), North American Numbering Plan Administration (NANPA), and regulatory fees in rates to be effective October 1, 2019. The tariff review plan was prepared by the National Exchange Carrier Association for rate-of-return carriers for which NECA files BDS rates and is designed to ensure that carriers make exogenous cost and rate adjustments in accordance with the FCC’s price cap rules.
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FCC Releases Information On Payment Methods and Procedures For 2019 Regulatory Fees
September 5, 2019 – The Federal Communications Commission (FCC) has released details on methods and procedures for paying fiscal year 2019 regulatory fees. On August 27, 2019, the FCC released a Report And Order And Further Notice Of Proposed Rulemaking setting a new schedule of fees for 2019 for regulatees and licensees. All regulatory fee payments must be received by the FCC no later than 11:59 PM, Eastern Daylight Time, on September 24, 2019. In addition to the Public Notice, industry-specific guidance on regulatory fees can be found in Who Owes Fees & What Is My FY 2019 Fee, on the FCC’s website at http://www.fcc.gov/regfees.
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FCC Tentative Agenda For September 2019 Open Meeting Includes CBRS Auction Procedures & Access Charge Order
September 5, 2019 – FCC Chairman Ajit Pai has announced the tentative agenda for the FCC’s open meeting set for Thursday, September 26, 2019. It contains the following items:
The Uniendo a Puerto Rico Fund and Connect USVI Fund – The FCC will consider a Report and Order that would allocate $950 million in fixed and mobile high-cost universal service support for Stage 2 of the Uniendo a Puerto Rico Fund and the Connect USVI Fund to expand, improve, and harden communications networks in Puerto Rico and the U.S. Virgin Islands. The Commission will also consider an Order on Reconsideration that would dispose of two petitions related to Uniendo a Puerto Rico Fund and Connect USVI Fund advance support and Stage 1 support. (WC Docket Nos. 18-143, 10-90, 14-58)
Access Arbitrage – The FCC will consider a Report and Order and Modification of Section 214 Authorizations that would adopt reforms to eliminate wasteful access arbitrage schemes and promote the efficient use of the nation’s communications networks. (WC Docket No. 18-155)
3.5 GHz Auction Procedures – The FCC will consider a Public Notice that would seek comment on procedures to be used for Auction 105, the auction of Priority Access Licenses (PALs) in the 3550-3650 MHz band. (AU Docket 19-244)
Public Notice of the Filing of Broadcast Applications Rules – The FCC will consider a Further Notice of Proposed Rulemaking that would propose to modernize and simplify the written and on-air public notices broadcasters must provide upon the filing of certain applications. (MB Docket Nos. 17-264, 17-105, 05-6)
Updating and Streamlining Rules for the Direct Broadcast Satellite Service – The FCC will consider a Report and Order that would align the Direct Broadcast Satellite licensing procedures with those of the geostationary orbit fixed-satellite service satellites. (IB Docket No. 06-160)
The FCC’s September open meeting is scheduled to begin at 10:30 a.m. EDT in the FCC meeting room at the FCC’s headquarters in Washington, D.C. The meeting is open to the public, and will be streamed live at fcc.gov/live.
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Illinois Joins Multistate Lawsuit To Block T-Mobile / Sprint Merger
September 3, 2019 – The Attorney General Illinois has announced that the state of Illinois has joined a multistate lawsuit to block the merger of nationwide mobile wireless providers T-Mobile and Sprint. Illinois is the 17th state to join the lawsuit, which was filed in U.S. District Court for the Southern District of New York. The coalition of states oppose the merger because they claim it will “reduce competition and increase prices for consumers.” In July 2019, the U.S. Department of Justice, along with the states of Kansas, Nebraska, Ohio, Oklahoma, and South Dakota reached a settlement with T-Mobile and Sprint, allowing them to complete their proposed merger.
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NTIA Releases Report On Spectrum Sharing
September 3, 2019 – The U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) has released the first ever “Annual Report on the Status of Spectrum Repurposing, ” which details efforts to repurpose parts of the nation’s radiofrequency spectrum to meet future communications needs of commercial and federal users. The report begins with background on legislative and Executive Branch mandates to identify and assess spectrum bands for possible repurposing, while most of the report “describes the status of efforts to repurpose specific bands and other non-band-specific initiatives to explore repurposing.” NTIA was directed to compile the report by an October 2018 Presidential Memorandum that established a national spectrum policy. The report addresses activities and events from January 1, 2018, through June 30, 2019.
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Eutelsat Withdraws From C-Band Alliance
September 3, 2019 – Satellite operator Eutelsat S.A. has withdrawn from the C-Band Alliance (CBA). In a filing to the FCC announcing the move, Eutelsat stated it “continues to support the CBA proposal for a market-driven clearing of the lower portion of the 3.7-4.2 GHz band,” but “is withdrawing from the CBA, however, because it is not in alignment with certain of the other CBA members on certain issues.” Eutelsat further explained that “its disassociation from the CBA would best serve the interests of its C-band satellite customers in the United States and its shareholders.”
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FCC Releases Internet Access Services Report
September 1, 2019 – The Office of Economics & Analytics has released a report on the status of Internet Access Services, as of December 31, 2017. Internet access connections are defined in the report as those in service, over 200 kilobits per second (kbps) in at least one direction, and reported to the FCC through FCC Form 477. Highlights from the report include the following:
Total Internet connections increased by about 4% between December 2016 and December 2017 to 421 million. Mobile Internet connections increased 4.5% year-over-year to 313 million in December 2017, while fixed connections grew to 108 million – up about 2% from December 2016.
In December 2017, 3% of fixed connections (or 3 million connections) were slower than 3 Mbps downstream, 11% (or 12 million connections) were at least 3 Mbps downstream but slower than 10 Mbps, 17% (or 18 million connections) were at least 10 Mbps downstream but slower than 25 Mbps, 32% (or 34 million connections) were at least 25 Mbps downstream but slower than 100 Mbps, and 38% (or 41 million connections) were at least 100 Mbps.
The percentage of fixed connections with a downstream speed of at least 25 Mbps has grown from 44% (or 44 million connections) in December 2014 to 69% (or 75 million connections) in December 2017. Over the same period, the percentage of fixed connections with slower downstream speeds of less than 3 Mbps has decreased from 8% (or 8 million connections) in December 2014 to 3% (or 3 million connections) in December 2017.
Residential fixed Internet access connections increased by about 2% between December 2016 and December 2017, to 99 million.
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FCC Releases Report On Voice Telephone Services
September 1, 2019 – The Office of Economics & Analytics has released a report on the status of Voice Telephone Services, as of December 31, 2017. The report, which was previously titled Local Telephone Competition, summarizes information collected about telephone services from incumbent local exchange carriers, competitive local exchange carriers, mobile voice providers, and interconnected VoIP providers. The following significant data points are included in the report:
In December 2017, the data shows that there were 50 million end-user switched access lines in service, 67 million interconnected VoIP subscriptions, and 340 million mobile subscriptions in the United States, or 456 million retail voice telephone service connections in total.
From 2014-2017, interconnected VoIP subscriptions increased at a compound annual growth rate of 7%, mobile voice subscriptions increased at a compound annual growth rate of 2%, and retail switched access lines declined at a compound annual growth rate of 12% per year.
Of the 116 million wireline retail voice telephone service connections (including both switched access lines and interconnected VoIP subscriptions) in December 2017, 60 million (or 52%) were residential connections and 56 million (or 48%) were business connections.
The 60 million wireline residential connections in December 2017 cross-classified by technology and retailer’s regulatory status are as follows: 31.7% ILEC switched access lines, 50.0% non-ILEC interconnected VoIP subscriptions, 16.2% ILEC interconnected VoIP subscriptions, and 2.1% non-ILEC switched access lines. Similarly, the 56 million wireline business connections were: 36.0% ILEC switched access lines, 40.6% non-ILEC interconnected VoIP subscriptions, 7.0% ILEC interconnected VoIP subscriptions, and 16.4% non-ILEC switched access lines.
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USAC Files Fourth Quarter 2019 Contribution Base Data: $11.017 Billion
September 1, 2019 – The Universal Service Administrative Company (USAC) has filed information on the universal service contribution base to be used for the fourth quarter of calendar year 2019. The total projected collected interstate and international end-user revenue base for 4Q2019 is $11,017,439,561, which was derived using projected collected revenue reported on the FCC Form 499-Q submissions. Upon FCC approval of universal service fund support mechanisms quarterly funding requirements, projected administrative costs, and total contribution base, the FCC will establish a quarterly USF contribution factor. USAC will then bill USF contributors on a monthly basis for their individual obligations based on the approved contribution factor.
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DOJ Charges 8 Individuals Behind Jetflicks and iStreamItAll With Violating Copyright Law
September 1, 2019 – The U.S. Department of Justice has announced that a federal grand jury returned an indictment charging eight Las Vegas residents with conspiring to violate federal criminal copyright law by running two of the largest unauthorized streaming services in the U.S. According to the DOJ press release, the eight defendants “allegedly ran an entity called Jetflicks, an online, subscription-based service headquartered in Las Vegas that permitted users to stream and, at times, download copyrighted TV programs without the permission of the relevant copyright owners.” Jetflicks reportedly claimed to have more than 183,200 different television show episodes available to users. One of the defendants also created a competing site called iStreamItAll that claimed to have 115,849 different television episodes and 10,511 individual movies available to users. Both Jetflicks and iStreamItAll were available to subscribers over the internet “on many different types of devices, platforms, and software including numerous varieties of computer operating systems, smartphones, tablets, smart televisions, video game consoles, digital media players, set-top boxes and web browsers.” All defendants are charged with conspiracy to commit criminal copyright infringement and, if convicted, face a maximum penalty of five years in prison. The charges were filed in U.S. District Court for the Eastern District of Virginia (Case No. 1:19-cr-253).
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