November 2020 News Update
FCC Chairman Ajit Pai Announces Plan To Leave FCC On January 20, 2021
November 30, 2020 – Federal Communications Commission Chairman Ajit Pai has announced he intends to leave the FCC on January 20, 2021. The move is consistent with the long-standing norm of FCC chairs leaving the agency when a new presidential administration takes office. Chairman Pai issued the following statement with his announcement:
“It has been the honor of a lifetime to serve at the Federal Communications Commission, including as Chairman of the FCC over the past four years. I am grateful to President Trump for giving me the opportunity to lead the agency in 2017, to President Obama for appointing me as a Commissioner in 2012, and to Senate Majority Leader McConnell and the Senate for twice confirming me. To be the first Asian-American to chair the FCC has been a particular privilege. As I often say: only in America.”
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FCC Announces 2021 Reasonable Comparability Benchmarks For Fixed Voice And Broadband Services
November 30, 2020 – The FCC’s Wireline Competition Bureau and Office of Economics and Analytics have announced the 2021 reasonable comparability benchmarks for fixed voice and broadband services. They have also posted fixed voice and broadband services data collected in the most recent urban rate survey, as well as explanatory notes regarding the data on the FCC’s website. The following reasonable comparability benchmarks are derived from the latest urban rate survey:
Voice Rates – the 2021 urban average monthly voice rate is $33.73. The reasonable comparability benchmark for voice services, two standard deviations above the urban average, is $54.75
Broadband Rates – Recipients of Universal Service Fund support that are subject to broadband performance obligations are required to offer broadband service at rates that are at or below the relevant reasonable comparability benchmark. The reasonable comparability broadband benchmark varies, depending upon the supported service’s download and upload bandwidths and usage allowance.
Broadband Service Minimum Usage Allowance – For fixed broadband service, the minimum monthly usage allowance for 2021 is 350 GB.
Eligible telecommunications carriers (ETCs) that are subject to broadband public interest obligations must comply with the reasonable comparability benchmarks. These ETCs include incumbent local exchange rate-of-return carriers, incumbent price-cap carriers that are receiving Connect America Fund (CAF) Phase II support, Rural Broadband Experiment providers, CAF Phase II Auction (Auction 903) support winners, and eventual Rural Digital Opportunity Fund Auction winners.
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Mergers & Acquisitions: Twin Valley Buying Southern Kansas Telephone Company
November 30, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Southern Kansas Telephone Company, Inc., SKT, Inc., and Twin Valley Management, Inc. requesting consent to transfer control of Southern Kansas and SKT to Twin Valley. Comments are due on or before December 14, 2020, and reply comments are due December 21, 2020.
Southern Kansas, a Kansas corporation, provides telecommunications services as an incumbent local exchange carrier (LEC) to approximately 2,494 access lines in south central and southeastern Kansas. It provides services in 13 local exchanges in the counties of Butler, Chautauqua, Cowley, Elk, Greenwood, Sedgwick, Sumner, and Wilson. SKT, a Kansas corporation and an affiliate of Southern Kansas, provides competitive LEC services to approximately 710 access lines in south central and southeastern Kansas. SKT also owns a non-controlling interest in Kansas Fiber Network, LLC.
Twin Valley Management operates as a holding company. Its wholly-owned subsidiary, Twin Valley Telephone, Inc. (TVT), provides telecommunications services as an incumbent LEC to approximately 3,306 access lines in north central Kansas. TVT provides services in 19 local exchanges in the counties of Clay, Cloud, Dickinson, Geary, Lincoln, Mitchell, Pottawatomie, Republic, Riley, Saline, and Washington. Twin Valley Management’s wholly-owned subsidiary Twin Valley Communications, Inc. (TVC) provides competitive LEC services to approximately 750 access lines in north central Kansas. TVC also owns a non-controlling interest in Kansas Fiber Network, LLC.
Twin Valley Management is purchasing 100% of the issued and outstanding stock of Southern Kansas and SKT. When the deal closes, both Southern Kansas and SKT will continue operating as wholly owned subsidiaries of TVM and as sister companies of TVT and TVC. TVT’s service area does not overlap with or have any adjacent borders with the service areas of Southern Kansas or SKT. SKT’s interest in Kansas Fiber Network, LLC will be transferred to TVC.
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FCC Releases Updated Form 499-A & Form 499-Q
November 30, 2020 – The FCC’s Wireline Competition Bureau has announced the release of revised FCC Forms 499-A and 499-Q, along with their accompanying instructions. Both forms are used to report revenue for purposes of contributing to the Universal Service Fund and other things. Revised FCC Form 499-A, the annual Telecommunications Reporting Worksheet, will be used in 2021 to report 2020 revenues. Revised FCC Form 499-Q, the quarterly Telecommunications Reporting Worksheet, will be used in 2021 to report projected and collected revenues on a quarterly basis.
Changes to the 2021 FCC Form 499-A and FCC Form 499-Q, where applicable, and instructions:
Date Changes: Dates were updated throughout the FCC Forms and instructions. References to “2020” were changed to “2021” and references to “2019” were changed to “2020.”
Circularity Factor Update: The circularity factor was adjusted and updated in the FCC Form 499-A and the FCC Form 499-Q instructions based upon the quarterly contribution factors.
Clarifications and Stylistic Changes: In a number of instances, additional clarifications were made, and minor stylistic changes, such as typos and spacing, were corrected in the FCC Forms 499-A and 499-Q instructions, without changing the substance.
Updates to the 2021 FCC Form 499-A Instructions:
Page 32 was updated to clarify that SMS and MMS messaging are information services.
Page 43 was updated to accommodate USAC’s E-file system configuration requirements.
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FCC Commissioner O’Rielly Requests Wyoming Governor Prevent Use Of CARES Act Funding For Network Overbuilding
November 25, 2020 – FCC Commissioner Michael O’Rielly has sent a letter to Mark Gordon, the governor of Wyoming, concerning network overbuilding in the state using CARES Act funding. According to Commissioner O’Rielly’s letter, Wyoming CARES Act funding was distributed through the Wyoming Business Council’s (WBC) Connect Wyoming program. However, “the WBC has not publicly released the applications or proposed coverage maps for the grant recipients, nor has it taken the requisite steps to ensure subsidized overbuilding did not and will not occur.” Commissioner O’Rielly has requested that Wyoming release of coverage maps for CARES Act funding projects; allow existing broadband providers to challenge proposed overbuilds, and cease funding projects that will result in network overbuilds.
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FCC Denies ZTE’s Challenge To National Security Threat Designation
November 24, 2020 – The FCC’s Public Safety and Homeland Security Bureau has issued a Memorandum Opinion And Order which denies a Petition for Reconsideration filed by ZTE Corporation seeking to overturn ZTE’s designation as a threat to U.S. national security. In June 2020, the PSHSB released an order designating ZTE and its parent company, affiliates, and subsidiaries as companies posing a national security threat to the integrity of U.S. communications networks and the communications supply chain. As a result of the designation, Universal Service Fund support may not be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by ZTE or ZTE affiliates. ZTE sought reconsideration of the designation order, arguing the order contradicts the congressional intent of the Secure Networks Act; the PSHSB did not consider all available evidence when it concluded that ZTE did not dispute the assertions made regarding the security of its products; and that the PSHSB was incorrect to dismiss ZTE’s new efforts to comply with U.S. law. The Public Safety and Homeland Security Bureau rejected all of ZTE’s arguments and denied ZTE’s recon petition, concluding ZTE “relies on arguments that have already been considered and rejected by the Bureau and does not demonstrate that the Bureau committed any material error or omission in its analysis.”
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FCC Chairman Appoints New Members To USAC Board Of Directors
November 24, 2020 – FCC Chairman has appointed six new members to the Board of Directors of the Universal Service Administrative Company (USAC). Each will serve a three-year term beginning January 1, 2021. The six new members of the USAC Board of Directors are as follows:
Representative for incumbent local exchange carriers (non-Bell Operating Companies) with $40 million or less in annual revenues: Geoffrey A. Feiss, General Manager, Montana Telecommunications Association
Representative for competitive local exchange carriers: Joseph Gillan, Consultant, Gillan Associates
Representative for low-income consumers: Ellis Jacobs, Senior Attorney, Advocates for Basic Legal Equality, Inc.
Representative for interexchange carriers with annual operating revenues of $3 billion or less: Michael Skrivan, Vice President Regulatory, Consolidated Communications
Representative for schools that are eligible to receive discounts pursuant to Section 54.501 of the FCC’s rules: Joan H. Wade, Ed.D., Executive Director, Association of Educational Service Agencies
Representative for rural health care providers that are eligible to receive supported services pursuant to Section 54.601 of the FCC’s rules: Katharine Hsu Wibberly, Ph.D., Executive Director, Mid-Atlantic Telehealth Resource Center
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FCC To Host Quantum Internet Forum On December 15th
November 23, 2020 – The Federal Communications Commission has announced it will host a quantum Internet forum on December 15, 2020. During the event, various international experts will discuss quantum computer processing and quantum network technology. The event will be streamed live online at www.fcc.gov/live beginning at 10:00 am. The full agenda is available here.
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FCC Grants Verizon Pole Attachment Pricing Complaint Against Potomac Edison
November 23, 2020 – The Federal Communications Commission has issued a Memorandum Opinion And Order which grants, in part, a pole attachment pricing complaint filed by Verizon Maryland LLC (Verizon), an incumbent LEC, against The Potomac Edison Company (Potomac Edison). In its complaint, Verizon alleged that the rates it paid Potomac Edison to attach facilities to Potomac Edison’s poles are unjust and unreasonable under Section 224 of the Communications Act and the FCC’s rules and orders. After reviewing the record, the FCC made the following findings:
The parties’ Joint Use Agreement was “newly-renewed” and is thus subject to review under the framework of the FCC’s 2018 Pole Attachment Order for the period beginning January 1, 2020
Verizon is entitled to relief under the FCC’s 2018 Pole Attachment Order
In the Order, the FCC prescribes the maximum pole attachment rate Potomac Edison may charge Verizon based on the relevant pole attachment rate formula.
The parties’ Joint Use Agreement is subject to review under the FCC’s 2011 Pole Attachment Order for the period prior to 2020
Verizon is entitled to relief under the FCC’s 2011 Pole Attachment Order
Ultimately, the FCC concluded the rates for attachments to Potomac Edison’s utility poles are unjust and unreasonable. As for relief, the FCC determined the maximum rate Potomac Edison may charge Verizon for attachments to Potomac Edison’s poles under the JUA is the Old Telecom Rate, calculated to be $12.12 per year. As a result, the FCC declared that Verizon is entitled to a refund and interest extending for a period of three years prior to the filing of the complaint, and directed Verizon and Potomac Edison to negotiate in good faith to reach an agreement on the amount of Verizon’s refund.
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FCC Again Denies Bidding Credits For DISH Network Entities Northstar Wireless & SNR Wireless LicenseCo
November 23, 2020 – The Federal Communications Commission has released an Order On Remand finding that Northstar Wireless and SNR Wireless LicenseCo remain ineligible for the bidding credits sought during Auction 97. The FCC concluded SNR and Northstar have not cured DISH Network Corporation’s de facto control over them. In Auction 97 – AWS-3 spectrum, Northstar Wireless, LLC won 345 licenses and SNR Wireless LicenseCo, LLC won 357 licenses, with bids totaling over $13.3 billion. They applied for over $3.3 billion in very small businesses bidding credits, which were denied after the FCC concluded both entities were under de facto control of DISH Network Corporation.
On appeal to the U.S. Court of Appeals for the D.C. Circuit, the FCC’s finding of de facto control was affirmed, but the Court remanded the case back to the FCC to allow Northstar and SNR an opportunity to eliminate DISH’s control. Northstar and SNR then attempted to cure the problems. In the Order On Remand, the FCC has concluded that while Northstar and SNR have now modified their agreements with DISH, the terms, conditions, and obligations, as well as the relationships among the parties are virtually identical to those of the original agreements. Based on this, the FCC found “Northstar and SNR are not eligible for bidding credits because they remain under DISH’s de facto control.”
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Verizon Wireless & Bluegrass Cellular File Spectrum License Assignment Applications
November 20, 2020 – The FCC’s Wireless Telecommunications Bureau has announced that Verizon Wireless and Bluegrass Cellular Inc. have filed applications seeking to assign 600 MHz, 700 MHz, Cellular, Personal Communications Service, Upper Microwave Flexible Use Service, and common carrier fixed point-to-point microwave licenses held by Bluegrass to Verizon Wireless. The spectrum licenses cover portions of Indiana, Kentucky, and Tennessee.
In October, Verizon announced it had entered into an agreement to purchase Bluegrass Cellular’s assets – spectrum licenses, substantially all network assets and facilities, and approximately 220,000 customers. Bluegrass Cellular, formed 29 years ago, was Kentucky’s first wireless company. It provides mobile wireless service in 34 counties in Kentucky, and has partnered with Verizon over the past several years “to bring 4G LTE services to some of the most rural parts of the state.”
Interested parties must file petitions to deny no later than December 10, 2020. Oppositions to petitions to deny must be filed no later than December 21, 2020. Replies to oppositions must be filed no later than December 29, 2020. All filings should refer to WT Docket No. 20-387.
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FCC Enforcement Advisory: Inmate Calling Service Rules
November 20, 2020 – The FCC’s Enforcement Bureau has issued an Enforcement Advisory to remind providers of inmate calling services (ICS) of their obligations to comply with the FCC’s ICS rules, their duty of candor with the FCC, and the potential penalties for noncompliance. First, the FCC reminds ICS providers they are prohibited from charging more than the interim rate caps currently in effect for all interstate calls – $0.25 per minute for interstate collect calling or $0.21 per minute for interstate debit calling, prepaid calling, or prepaid collect calling. Second, the FCC reminds ICS providers that the FCC’s rules permit five types of ancillary service charges in connection with interstate or international calls: automated payment fees; single-call and related services fees; live agent fee; paper bill/statement fees; and third-party financial transaction fees. Third, the FCC reminds ICS providers they are liable for ensuring compliance with all of the FCC’s ICS rules, not just those covered in the Enforcement Advisory. Finally, the FCC reminds ICS providers they have a duty of absolute candor in connection with their interactions with the FCC.
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Mergers & Acquisitions: GI Partners Purchasing Vast Broadband
November 20, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Python Holdings, L.P., Clarity Telecom, LLC, and GI DI Rushmore Topco LLC (GI DI) requesting consent to transfer control of Clarity to GI DI. Comments are due on or before December 4, 2020, and reply comments are due December 11, 2020.
Clarity Telecom, LLC, headquartered in Sikeston, Missouri, provides telecommunications services in Minnesota and South Dakota under the brand Vast Broadband. Vast Broadband is an incumbent local exchange carrier in South Dakota and is authorized to provide competitive LEC and interexchange services in Minnesota and South Dakota. Clarity Telecom, LLC is a wholly owned subsidiary of Clarity Telecom Holdings, LLC, a Delaware limited liability company. Clarity Telecom Holdings is an indirect, wholly owned subsidiary of Python Holdings, L.P. Python Holdings, L.P. is an investment fund primarily owned and controlled by funds and entities affiliated with Pamlico Capital and Oak Hill Capital Partners, which are private equity funds based in the U.S.
GI DI, a Delaware limited liability company, was created for the purpose of completing the proposed transaction. GI DI is wholly owned by GI DI Rushmore Parent, which, in turn, is wholly owned by GI DI Rushmore Holdings LP. Rushmore Holdings is owned and is controlled by two private equity funds, GI Partners Data Infrastructure Fund LP and GI Partners Data Infrastructure Fund-A LP and another limited partner, Rushmore Opportunity LP.
The parties have entered into an agreement whereby GI DI will indirectly acquire all of the ownership interests in Clarity Telecom, LLC, making Clarity a wholly owned, indirect subsidiary of GI DI. The Section 214 authorizations currently held by Clarity will continue to be held by Clarity following consummation of the proposed Transaction. The Transaction will not result in any loss or impairment of service for any of Clarity’s customers and will have no adverse effects upon competition in any areas where Clarity provides telecommunications service.
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FCC Will Approve Rules To Secure U.S. Communications Networks, Rip & Replace Blacklisted Equipment
November 19, 2020 – During its December 10th open meeting, the Federal Communications Commission is expected to approve a Second Report And Order which contains new rules aimed at securing U.S. communications networks. The Order contains the following FCC actions:
The FCC will adopt a rule that requires Eligible Telecommunications Carriers (ETCs) to remove and replace covered equipment from their networks (equipment or services produced or provided by a covered company posing a national security threat to the integrity of communications networks or the communications supply chain).
The FCC will establish the Secure and Trusted Communications Networks Reimbursement Program to subsidize smaller carriers to remove and replace covered equipment, once Congress appropriates at least $1.6 billion that Commission staff estimate will be needed to reimburse providers eligible under current law.
The FCC will establish the procedures and criteria for publishing a list of covered communications equipment or services that pose an unacceptable risk to the national security of the U.S or the security and safety of U.S. persons and prohibit universal service fund support from being used for such covered equipment or services.
The FCC will adopt a reporting requirement to ensure we are informed about the ongoing presence of covered equipment in communications networks.
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FCC Office Of Economics And Analytics Releases Memo On Incorporating Economic Analysis Into FCC Decision-Making
November 19, 2020 – The FCC’s Office of Economics and Analytics and Office of General Counsel have issued a memorandum covering the legal framework and considerations for regulatory impact analysis. The memo formalizes the FCC’s procedures for incorporating economic analysis into its decision-making. It is intended to assist those involved in FCC rulemaking by explaining (1) the legal and policy role of Regulatory Impact Analysis and other economic analysis; and (2) the elements of a “rigorous, economically-grounded cost-benefit analysis” required by the FCC’s rules for major rulemakings. Additionally, it explains how the formal cost-benefit analysis – defining the ends that regulation is intended to achieve, identifying alternatives, and identifying costs and benefits – will apply to rulemakings in which the Office of Economics and Analytics is called to provide economic analysis.
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FCC Studying Costs Of Including Location Information With 988 Calls
November 19, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on “the feasibility and cost of including an automatic dispatchable location that would be conveyed with a 988 call.” Comments are due on or before December 21, 2020, and reply comments are due January 11, 2021. On October 17, 2020, the National Suicide Hotline Designation Act of 2020, signed into law in October 2020, which among other things, directs the FCC to submit a report on including automatic location identification with 988 calls. As such, the FCC is seeking comment on this generally, as well as the following, specifically:
What is the feasibility of including location information with a 988 call?
What technical issues are involved and how can they be overcome, including with respect to multi-line telephone systems?
How long would an implementation process take?
What are the costs involved – both the financial costs and any potential risks to consumer privacy or other non-monetary costs?
In the Public Notice, the FCC also has clarified the 988 implementation date, as well as the effective date of the designation of 988 as the universal telephone number within the U.S. for the national suicide prevention and mental health crisis hotline. In July 2020, the FCC approved a Report And Order designating “988” as the three digit number for reaching the National Suicide Prevention Lifeline. The FCC views the subsequent National Suicide Hotline Designation Act of 2020 as a “ratification” of the FCC’s prior action. Therefore, the FCC has clarified that the designation of 988 as the national suicide prevention and mental health crisis hotline will take effect on October 17, 2021, which is one year after the date of enactment of the Suicide Hotline Act.
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FCC Releases December 10th Open Meeting Tentative Agenda
November 19, 2020 – Federal Communications Commission Chairman Ajit Pai has announced the tentative agenda for the FCC’s next open meeting, scheduled for Thursday, December 10, 2020:
Securing the Communications Supply Chain – The Commission will consider a Report and Order that would require Eligible Telecommunications Carriers to remove equipment and services that pose an unacceptable risk to the national security of the United States or the security and safety of its people, would establish the Secure and Trusted Communications Networks Reimbursement Program, and would establish the procedures and criteria for publishing a list of covered communications equipment and services that must be removed. (WC Docket No. 18-89)
National Security Matter – The Commission will consider a national security matter.
National Security Matter – The Commission will consider a national security matter.
Allowing Earlier Equipment Marketing and Importation Opportunities – The Commission will consider a Notice of Proposed Rulemaking that would propose updates to its marketing and importation rules to permit, prior to equipment authorization, conditional sales of radiofrequency devices to consumers under certain circumstances and importation of a limited number of radiofrequency devices for certain pre-sale activities. (ET Docket No. 20-382)
Promoting Broadcast Internet Innovation Through ATSC 3.0 – The Commission will consider a Report and Order that would modify and clarify existing rules to promote the deployment of Broadcast Internet services as part of the transition to ATSC 3.0. (MB Docket No. 20-145)
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National Lifeline Eligibility Verifier To Fully Launch In California On December 18th
November 18, 2002 – The FCC’s Wireline Competition Bureau has announced the full launch of the National Lifeline Eligibility Verifier in California, effective December 18, 2020. Currently, the California LifeLine Administrator manages eligibility verification and duplicate checking for the federal Lifeline program and its own state low-income program. Beginning December 18th, the National Verifier will leverage California’s existing eligibility verification processes so that Lifeline consumers in California can continue to apply using a streamlined state application process for both federal and state benefits. Additionally, starting on December 18, 2020, the National Verifier will be responsible for eligibility verification for all new subscribers of standalone broadband service, as well as reverification of existing subscribers of standalone broadband service.
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President-Elect Biden Announces FCC Transition Team
November 18, 2020 – President-Elect Joe Biden has announced his agency review team for the Federal Communications Commission. According to the President-elect’s transition website, agency review teams “are responsible for understanding the operations of each agency, ensuring a smooth transfer of power, and preparing for President-elect Biden and Vice President-elect Harris and their cabinet to hit the ground running on Day One.” The FCC agency review team includes the following four individuals:
John Williams, team lead, U.S. House of Representatives, Committee on the Judiciary
Mignon Clyburn, currently self-employed, and former FCC Commissioner
Edward Smitty Smith, attorney with DLA Piper, LLP, and former Legal Advisor to past FCC Chairman Tom Wheeler
Paul de Sa, currently self-employed, and former FCC official
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House Passes Three Communications & Technology Bills
November 17, 2020 – The U.S. House of Representatives has passed three separate bills related to communications and technology issues:
Reliable Emergency Alert Distribution Improvement (READI) Act of 2020 – H.R. 6096 amends the Warning, Alert, and Response Network Act to classify emergency alerts from the Federal Emergency Management Agency as a type of alert that commercial mobile service providers may not allow subscribers to block from their devices. The bill also directs the Federal Communications Commission to adopt regulations to facilitate coordination with State Emergency Communications Committees in developing and modernizing State Emergency Alert System plans. Finally, the READI Act directs the FCC to examine the feasibility of modernizing the Emergency Alert System by expanding alert distribution to the internet and streaming services.
Utilizing Strategic Allied (USA) Telecommunications Act of 2020 – H.R. 6624 creates a new grant program through the National Telecommunications and Information Administration (NTIA) to promote technology that enhances supply chain security and market competitiveness in wireless communications networks.
Spectrum IT Modernization Act of 2020 – H.R. 7310 requires NTIA – in consultation with the Policy and Plans Steering Group – to submit to Congress a report on its plans to modernize agency information technology systems relating to managing the use of federal spectrum.
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FCC Releases 5G Adjustment Factor Values For Disaggregating Legacy High-Cost Support
November 16, 2020 – The FCC’s Office of Economics and Analytics and Wireline Competition Bureau have adopted 5G adjustment factor values that will be used for disaggregating legacy high-cost support that some mobile wireless providers currently receive. The FCC approved the use of an adjustment factor for 5G Fund Phase I auction, as well as for disaggregating legacy high-cost support In the recent 5G Fund Order. The adjustment factor values will be updated using more current data prior to the beginning of the 5G Fund Phase I auction. Generally, the Office and Wireline Bureau adopted the adjustment factor values they proposed in their June 2020 Public Notice. The 5G adjustment factor will consist of two elements: the relative cost of serving areas with differing terrain characteristics, and the potential business case for each area. The first component, the relative cost of serving areas with differing terrain characteristics, will be based on terrain elevation variation. The second, the potential business case for each area, will be based on demand for service, using median household income as a proxy for demand.
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Court Rules On T-Mobile & Inteliquent Motions To Dismiss Rural Call Completion Lawsuit
November 16, 2020 – The U.S. District Court for The Northern District Of Illinois (Eastern Division) has issued a ruling on motions to dismiss the lawsuit filed against T-Mobile and Inteliquent related to violations of the FCC’s rural call completion rules. To provide background, in November 2019, two rural communications providers, Craigville Telephone Co. and Consolidated Telephone Co., filed a class action lawsuit, individually and on behalf of a class of similarly situated companies, against T-Mobile USA, Inc., and Inteliquent, Inc., for damages stemming from T-Mobile’s violation of the FCC’s rural call completion rules. The lawsuit alleges violations of the Communications Act (Counts I to III); the Racketeer Influenced and Corrupt Organizations (RICO) Act (Counts IV and V); and several state-law tort claims (Counts VI to VIII).
T-Mobile filed a motion to dismiss all of the claims, which was granted in part and dismissed in part. The Court ruled that the following claims against T-Mobile will move forward: Count 1 – Violation Of Section 201(b) Of The Communications Act Of 1934, Fake Ringtones; Count 2 – Violation Of Section 201(b) Of The Communications Act Of 1934, Failure to Ensure Delivery of Calls; Count 3 – Violation Of Section 202(a) Of The Communications Act Of 1934; and Count 8 – Civil Conspiracy. The Court has ruled that the following claims against T-Mobile are dismissed without prejudice: Count 4 – Violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c); Count 5 – Violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(d); Count 6 – Tortious Interference With Contract, Illinois Law; and Count 7 – Violation Of Illinois Consumer Fraud And Deceptive Business Practice Act
Inteliquent filed a motion to dismiss all claims, and to stay the case and refer three questions to the FCC. The Court ruled that Count 8, the claim for Civil Conspiracy against Inteliquent will move forward, and it denied Inteliquent’s motion to refer to the FCC. Additionally, the Court denied without a prejudice a motion to intervene filed by a group of rural communications companies.
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FCC Sets Lifeline Program’s Mobile Broadband Minimum Usage Standard At 4.5 GB/Month
November 16, 2020 – The FCC’s Wireline Competition Bureau has released an Order which revises the Lifeline program’s minimum service standard for mobile broadband usage to 4.5 GB per month. The mobile broadband minimum usage standard was set to increase from 3 GB/month to 11.75 GB/month on December 1, 2020. After the FCC announced, in July 2020, such a dramatic increase to the usage minimum based on an existing formula, the National Lifeline Association petitioned the FCC for a waiver of the increase. It sought to keep the minimum usage standard for mobile broadband at 3 GB/month. In its petition, the National Lifeline Association explained how the proposed increase would make most Lifeline mobile broadband service unaffordable, resulting “in less access to Lifeline by those the program is intended to serve.” For a number of reasons, the Bureau has partially granted the waiver request. Primarily, the Bureau concluded “the benefits of a dramatic increase are outweighed by the likely hardship on Lifeline subscribers as it risks making Lifeline service prohibitively expensive for at least some Lifeline subscribers.” But, the Bureau declined to keep the standard at its current level, determining such a freeze “is equally unreasonable and counter to [its] statutory obligations and the [FCC’s] goals.” Accordingly, the Lifeline program’s minimum service standard for mobile broadband usage will be set at 4.5 GB per month beginning December 1, 2020.
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FCC Authorizes Price Cap Carriers To Receive 7th Year Of Connect America Cost Model Support
November 16, 2020 – The FCC’s Wireline Competition Bureau has announced that all eligible price cap carriers that currently receive Connect America Phase II support based on the Connect America Cost Model (CAM) have elected to receive an additional, seventh year of model-based support. Further, the Bureau has directed the Universal Service Administrative Company (USAC) to obligate and disburse Universal Service Fund support to the respective price cap carriers beginning January 2021. A list of the price cap carriers that will receive a seventh year of cost model support, as well as the states where they are located and their state-level support amounts, is included as Attachment A to the Public Notice.
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FCC Extends Waiver Of Certain Lifeline Program Rules Through February 28, 2021
November 16, 2020 – On its own motion, the FCC’s Wireline Competition Bureau has extended prior waivers of the FCC’s Lifeline program rules governing documentation requirements for subscribers residing in rural areas on Tribal lands, recertification, reverification, general de-enrollment, subscriber usage, and income documentation through February 28, 2021. The Bureau decided to extend the waivers in light of the impact of the ongoing COVID-19 pandemic in the U.S. The Bureau previously waived these Lifeline program rules to provide necessary relief for low-income households. Pursuant to the Bureau’s Order, the following sections of Title 47 of the Code of Federal Regulations are waived through February 28, 2021:
54.405(e)(1),
54.405(e)(3),
54.405(e)(4),
54.407(c)(2),
54.410(a),
54.410(b)(1)(i)(B), and
54.410(f)
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FCC Authorizes Siyeh Communications To Receive A-CAM II Support
November 13, 2020 – The FCC’s Wireline Competition Bureau has authorized Siyeh Communications to receive Alternative Connect America Cost Model (A-CAM) II model-based support. The authorization is subject to Siyeh Communications designation as an eligible telecommunications carrier. Siyeh’s A-CAM support over an 8-year term, from January 1, 2021 to December 31, 2028, will be $1,551,375 per year, and $12,411,000 over the full term. SiyCom must meet defined broadband network deployment obligations over the 8-year support term, and must comply with annual reporting requirements.
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FCC Approves 3 Rivers Telephone’s Sale Of Browning Exchange To Siyeh Communications
November 13, 2020 – The FCC’s Wireline Competition Bureau has granted, subject to conditions, the sale of 3 Rivers Telephone Cooperative, Inc.’s Browning Exchange in Montana to Siyeh Communications. Also, to facilitate the transfer of the Browning Exchange from 3 Rivers to Siyeh Communications, the Wireline Bureau has granted the parties’ petition for waiver of the FCC’s study area boundary freeze. 3 Rivers is an incumbent LEC in Montana that serves 26 exchanges, including the Browning Exchange, which has 2,322 lines and is located almost entirely on the Blackfeet Reservation. 3 Rivers receives universal service fund (USF) support under the FCC’s cost-based rules. Siyeh Communications currently provides broadband services to approximately 179 subscribers on the Blackfeet Reservation. It is wholly owned and chartered by Siyeh Corporation, a federally chartered for-profit corporation owned by the Blackfeet Nation. Siyeh Communications is acquiring substantially all of 3 Rivers’ assets in the Browning Exchange, including telecommunications facilities, customer databases, and associated contracts. Pursuant to the FCC’s rules, when “an entity other than a rate-of-return carrier acquires exchanges from a rate-of-return carrier, absent further action by the Commission, the carrier will receive model-based support and be subject to public interest obligations.” The Wireline Bureau granted the sale of the Browning Exchange with conditions to prevent an increase in USF support payments beyond current levels. The conditions cap the high cost USF support received by 3 Rivers and sets a fixed amount of A-CAM II support for SiyCom. These will remain in effect for eight years from the consummation of the transaction.
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C-Band Auction – 57 Qualified Bidders
November 12, 2020 – The FCC’s Office of Economics and Analytics and Wireless Telecommunications Bureau have announced that 57 applicants are qualified to bid in the upcoming C-Band auction (Auction 107). There were 17 entities that submitted applications to participate but failed to qualify. The list of qualified bidders is available here, while a list of the non-qualified applicants is available here. Bidding in Auction 107 is scheduled to begin on December 8, 2020.
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FCC Authorizes CAF Phase II Auction Support For Six Winning Bids
November 12, 2020 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund Phase II support for six winning bids placed by Velocity.Net Communications, Inc. in Pennsylvania. The Wireline Bureau has directed the Universal Service Administrative Company (USAC) to obligate and disburse Universal Service Fund support to Velocity.Net in the amounts identified in the Public Notice. USAC will disburse support in 120 monthly payments, beginning at the end of November 2020.
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FCC Releases New Form 477 Broadband Deployment Data
November 12, 2020 – The FCC’s Office of Economics and Analytics, Wireline Competition Bureau, and Wireless Telecommunications Bureau have released updated data collected through FCC Form 477 on fixed broadband deployment, and mobile voice and broadband deployment as of December 31, 2019. Newly-released fixed broadband data include revisions made by Form 477 filers through October 8, 2020, while the mobile deployment data include revisions made by filers through May 28, 2020. Fixed broadband deployment data are available for download here, and mobile broadband deployment data are available here. Among other things, the data shows:
At the end of 2019, the number of Americans living in areas without access to terrestrial fixed broadband with speeds of at least 25/3 Mbps decreased to 14.5 million. This is a 46% decrease from the end of 2016.
The number of Americans living in areas without broadband speeds of at least 250/25 Mbps has decreased by 77% since the end of 2016.
During the three-year period of 2016 – 2019, the number of rural Americans living in areas with 250/25 Mbps broadband service increased by 268%.
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FCC Announces Final Agenda For November 18th Open Meeting
November 10, 2020 – The Federal Communications Commission has announced the final agenda for the FCC’s open meeting on November 18, 2020. It is scheduled to begin at 10:30 a.m., and will be in a wholly electronic format, streamed live at www.fcc.gov/live and on the FCC’s YouTube channel. The final agenda contains the following items:
(1) Modernizing the 5.9 GHz Band – The Commission will consider a First Report and Order, Further Notice of Proposed Rulemaking, and Order of Proposed Modification that would adopt rules to repurpose 45 megahertz of spectrum in the 5.850-5.895 GHz band for unlicensed operations, retain 30 megahertz of spectrum in the 5.895-5.925 GHz band for the Intelligent Transportation Systems (ITS) service, and require the transition of the ITS radio service standard from Dedicated Short-Range Communications technology to Cellular Vehicle-to-Everything technology. (ET Docket No. 19-138)
(2) Further Streamlining of Satellite Regulations – The Commission will consider a Report and Order that would streamline its satellite licensing rules by creating an optional framework for authorizing space stations and blanket-licensed earth stations through a unified license. (IB Docket No. 18-314)
(3) Facilitating Next Generation Fixed-Satellite Services in the 17 GHz Band – The Commission will consider a Notice of Proposed Rulemaking that would propose to add a new allocation in the 17.3-17.8 GHz band for Fixed-Satellite Service space-to-Earth downlinks and to adopt associated technical rules. (IB Docket No. 20-330)
(4) Expanding the Contribution Base for Accessible Communications Services – The Commission will consider a Notice of Proposed Rulemaking that would propose expansion of the Telecommunications Relay Services (TRS) Fund contribution base for supporting Video Relay Service (VRS) and Internet Protocol Relay Service (IP Relay) to include intrastate telecommunications revenue, as a way of strengthening the funding base for these forms of TRS and making it more equitable without increasing the size of the Fund itself. (CG Docket Nos. 03-123, 10-51, 12-38)
(5) Revising Rules for Resolution of Program Carriage Complaints – The Commission will consider a Report and Order that would modify the Commission’s rules governing the resolution of program carriage disputes between video programming vendors and multichannel video programming distributors. (MB Docket Nos. 20-70, 17-105, 11-131)
(6) Licensing Matter – The Commission will consider a licensing matter. (Wireless Telecommunications Bureau and Office Of General Counsel)
(7) Enforcement Bureau Action – The Commission will consider an enforcement action.
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FTC Reaches Settlement With Zoom Over Alleged Privacy & Security Violations
November 9, 2020 – The Federal Trade Commission has reached a settlement with Zoom Video Communications, Inc. which ends an investigation into whether Zoom misled its users about privacy and security measures. The FTC began investigating video conferencing platform Zoom after receiving a complaint from the Electronic Privacy Information Center about Zoom’s business practices. The FTC then filed its own complaint, alleging Zoom had violated the Federal Trade Commission Act by misrepresenting to its users that the service used end-to-end encryption. The FTC also alleged Zoom made deceptive claims to consumers about the level of encryption the service used and the security of stored zoom meeting recordings. The settlement resolves the allegations in the FTC’s complaint, but requires Zoom to implement a comprehensive information security program that protects the security, confidentiality, and integrity of Zoom users’ information. Among other things, the security program requires Zoom to annually assess potential internal and external security risks; deploy safeguards such as multi-factor authentication to protect against unauthorized access to its network; institute data deletion controls; and review any software updates for security flaws. The FTC voted 3-2 to issue the proposed administrative complaint and to accept the consent agreement with Zoom. Democratic Commissioners Rohit Chopra and Rebecca Kelly Slaughter issued dissenting statements, while Chairman Joe Simons as well as Republican Commissioners Noah Joshua Phillips and Christine S. Wilson issued a majority statement.
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FCC Preempts Missouri Duplicative Rights-Of-Way Fees
November 9, 2020 – The FCC’s Wireline Competition Bureau has issued a Declaratory Ruling that preempts a rights-of-way fee framework imposed by three cities in Missouri. More specifically, the Bureau has preempted the legal framework imposed by the cities of Cameron, Maryville, and St. Joseph, Missouri to the extent that it has been or may be used to require Missouri Network Alliance, LLC d/b/a Bluebird Network to pay duplicative rights-of-way fees based solely on the passive ownership of the facilities it uses to provide telecommunications services by Leasing MW, LLC.
Bluebird is a competitive local exchange carrier that provides telecommunications services in Missouri and has extensive fiber optic networks facilities in various Missouri cities. Pursuant to a series of agreements in 2019 between Bluebird’s parent company, Leasing MW, LLC, and MIP IV MidWest Fiber, LLC, the Bluebird fiber optic network was sold to Leasing MW, LLC, but leased back to MIP IV MidWest Fiber, LLC so that Bluebird could continue to operate and provide telecommunications services to customers. Thereafter, the Missouri cities attempted to require both Bluebird (as the operator and provider of services) and LMW (as the passive owner of the Network) to enter into rights-of-way use agreements and pay associated fees. The parties then petitioned the FCC for preemption.
Section 253(a) of the Communications Act states that no state or local statute, regulation, or legal requirement may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. Section 253(d) of the Act requires the FCC to preempt the enforcement of State or local requirements that are contrary to Sections 253(a). Upon reviewing the issue, the Bureau found the cities’ rights-of-way ordinance would allow the cities to “double-charge Bluebird for its single use of the public rights-of-way simply because another entity owns the Network – an entity that does not have any physical connection to the public rights-of-way itself.” This would increase Bluebird’s rights-of-way costs by 100%.
The Bureau determined “such a dramatic increase in costs for Bluebird’s use of the Network would impose a financial burden that effectively prohibits Bluebird from providing its services in violation of section 253(a).”
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FCC Provides Guidance For Voice Service Providers To Seek An Exemption From Caller ID Authentication Rules – Deadline Is December 1st
November 9, 2020 – The FCC’s Wireline Competition Bureau has released a Public Notice which provides guidance for voice service providers that plan to seek an exemption from the FCC’s caller ID authentication rules. Voice service providers may seek an exemption for their Internet Protocol (IP) networks, non-IP networks, or both. To seek an exemption, voice service providers must electronically file all required certification materials with the FCC no later than December 1, 2020. The Bureau will review the certifications and issue a list of parties that receive an exemption on or before December 30, 2020. However, the FCC must first obtain Office of Management and Budget (OMB) approval for the certification process. It is doing so now. When OMB approval is received, the Wireline Bureau will publish a notice in the Federal Register, making the caller ID authentication exemption certification rule effective. The Public Notice lays out the following requirements for submitting an exemption:
Each voice service provider that seeks to qualify for an exemption will be required to submit one certification that the company meets the stated criteria for the IP networks exemption, non-IP networks exemption, or both exemptions.
An officer of the voice service provider seeking an exemption will be required to sign the certification stating under penalty of perjury that the officer has personal knowledge that the company meets each criterion.
Each voice service provider seeking an exemption will be required to submit an accompanying statement explaining, in detail, how the company meets each of the prongs of each applicable exemption so that the FCC can verify the accuracy of the certification.
All certifications and supporting statements must be filed electronically in WC Docket No. 20-68, Exemption from Caller ID Authentication Requirements, in the FCC’s Electronic Comment Filing System (ECFS), no later than December 1, 2020.
Filers will be able to request that any materials or information submitted to the FCC in their certification be withheld from public inspection pursuant to the procedures set forth in Section 0.459 of the FCC’s rules.
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Ace Telephone Of Michigan Petitions FCC To Modify Switched Access Revenue Requirements
November 9, 2020 – The FCC’s Wireline Competition Bureau is seeking comment from interested parties on a petition for waiver filed by Ace Telephone Company of Michigan, Inc., in connection with the merger of affiliated study areas in Michigan. Specifically, Ace Telephone is seeking a waiver of Sections 51.909(a), 51.917(b)(1) and 51.917(b)(7) of the FCC’s rules to modify access rate bands and charges, and 2011 Switched Access Revenue Requirement and 2011 Base Period Revenue. The merging study areas are Ace Telephone Company of Michigan, Inc. (Study Area Code (SAC) 310704); Ace Telephone Company of Michigan, Inc. – Old Mission (SAC 310777); Ace Telephone of Michigan, Inc. – Allendale (SAC 310669); and Ace Telephone Company of Michigan, Inc. – Drenthe (SAC 310692). Comments are due on or before November 24, 2020, and reply comments are due December 4, 2020.
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Mergers & Acquisitions: Infralink Holdings Purchasing LS Networks
November 6, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by CEC Resources, Inc., LightSpeed Networks, Inc., d/b/a LS Networks, and Pacific Broadband Partners IA LLC requesting consent to transfer control of LS Networks to Pacific Broadband Partners. LS Networks is an Oregon corporation that operates a fiber-optic communications network primarily in Oregon and Washington, but also serves customers in California and Idaho. LS Networks provides competitive communications services to schools, libraries, and medical facilities and to residential customers. CEC Resources is the controlling majority shareholder of LS Networks, and is a wholly owned subsidiary of Central Electric Cooperative, Inc., a not-for-profit electric cooperative operating throughout central Oregon. Pacific Broadband Partners is a Delaware corporation created for purposes of the proposed transaction. It does not provide telecommunications services and is an indirect wholly owned subsidiary of Infralink Holdings IA LP, a limited partnership investment fund and Delaware corporation. Comments are due on or before November 20, 2020, and reply comments are due November 27, 2020.
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Mergers & Acquisitions: Future Fiber Buying Ontario Telephone, Trumansburg Telephone, & Finger Lakes Communications Group
November 6, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Ontario Telephone Company, Inc., (OTC), Trumansburg Telephone Company, Inc. (TTC), Finger Lakes Communications Group Inc. (FLCG), and Future Fiber Parent, L.P., requesting consent to transfer of control of OTC, TTC, and FLCG to Future Fiber Parent. Comments are due on or before November 20, 2020, and reply comments are due November 27, 2020. OTC, TTC, and FLCG are all New York corporations that provide telecommunications services to business and residential customers in north central New York. OTC and TTC operate as rural incumbent local exchange carrier with eligible telecommunications carrier status in New York. OTC has approximately 1,429 access lines in portions of Ontario county, while TTC has approximately 3,085 access lines in portions of Seneca, Schuyler, and Tompkins counties. FLCG is a resale provider of intrastate and interstate long distance services within the areas served by OTC and TTC. Future Fiber Parent is a Delaware limited partnership that is primarily owned and controlled by funds and entities affiliated with Oak Hill Capital Management, a private equity fund based in the United States but whose funds are organized in the Cayman Islands. The application has not been streamlined due to the complexities. Because the transaction involves foreign ownership, the Wireline Bureau has referred. the application to the relevant Executive Branch agencies for their views on any national security, law enforcement, foreign policy or trade policy concerns.
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Connected Care Pilot Program Application Window Opens November 6th
November 5, 2020 – The FCC has announced that the Connected Care Pilot Program application window will open on November 6 at 12:00 p.m. ET and close on December 7, 2020, at 11:59 p.m. ET. The FCC’s Connected Care Pilot Program will provide up to $100 million from the Universal Service Fund over a three-year period to selected applicants to support the provision of connected care services. Funding will cover 85% of a selected project’s eligible costs of broadband connectivity, network equipment, and information services necessary to provide connected care services to an intended patient population. The Pilot Program will not fund end-user devices or medical equipment. A September 2020 Public Notice issued by the Wireline Competition Bureau contains guidance on the application submission process, prerequisites for the submission of an application, and examples of services eligible for support.
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DOJ Seizes $1 Billion Worth Of Silk Road Bitcoins
November 5, 2020 – The U.S. Department of Justice has seized over a thousands Bitcoins valued at over $1 billion that were associated with now-defunct dark web marketplace Silk Road. Specifically, 69,370.22491543 Bitcoin, Bitcoin Gold, Bitcoin SV, and Bitcoin Cash were seized as part of a judicial forfeiture action filed by the DOJ in the U.S. District Court for the Northern District of California. In the Complaint For Forfeiture, the DOJ alleges the cryptocurrency were proceeds from the sale of unlawful goods and services on Silk Road, but had been stolen by an unnamed individual. Two days prior to the DOJ action, the unnamed individual entered into a Consent and Agreement to Forfeiture with the U.S. Attorney’s Office of the Northern District of California. This is the largest seizure of cryptocurrency in the history of the Department of Justice.
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T-Mobile Fined $200 Million For Sprint’s Lifeline Fraud
November 4, 2020 – The FCC’s Enforcement Bureau has entered into a Consent Decree with Assurance Wireless USA, LP, Sprint Corporation, and T-Mobile US, Inc. which resolves the Bureau’s investigation into whether the Sprint violated the FCC’s Lifeline rules by requesting and receiving support from the Lifeline program for ineligible subscribers. The Enforcement Bureau began investigating Sprint and its subsidiary, Assurance Wireless, in 2019 for potential violations of the FCC’s Lifeline program rules. Sprint apparently made Lifeline claims for ineligible subscribers and subscribers that did not meet the Lifeline program’s non-usage requirements. Also, the investigation considered whether Sprint received duplicative Lifeline support for customers in two states – payments for multiple Lifeline-supported services to the same individual. Under the Consent Decree, T-Mobile, the parent company of Sprint, will implement a Lifeline compliance plan and make a $200,000,000 settlement payment to the U.S. Treasury.
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Missouri PSC To Increase Lifeline Support For Voice-Only Service For Missouri Consumers
November 4, 2020 – The Missouri Public Service Commission has announced an increase to the discount for Lifeline voice-only service. Specifically, the Missouri PSC has increased the Missouri Universal Service Fund support amount for Lifeline voice-only service by $2.00 a month, if the Federal Communications Commission continues with its plan to reduce support by $2.00 a month on December 1, 2020. If the FCC moves forward with its reduction, eligible Missouri consumers will see the monthly discount increase for Lifeline voice-only service by $2.00 a month, from $16.75 a month to $18.75 a month. The Lifeline discount is available for landline or wireless voice service. Missouri Lifeline voice service providers may implement the support change at any time from December 1, 2020 through February 1, 2021.
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Mergers & Acquisitions: Swedish-Owned Telia Carrier U.S. Being Sold To Swedish Company Polhem Infra KB
November 3, 2020 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by filed by Telia Company AB, Telia Carrier U.S. Inc., and Oura Bidco US, Inc. requesting consent to transfer control of Telia Carrier U.S. from Telia Company AB to BidCo US. Comments are due on or before November 17, 2020, and reply comments are due November 24, 2020. Telia Carrier U.S., a Delaware corporation, operates a nationwide fiber-optic communications network. Pursuant to domestic and international Section 214 authority, it provides carrier-grade or wholesale services to carriers, and offers a range of information services and telecommunications services. Telia Carrier U.S. is a direct wholly owned subsidiary of Transferor Telia Company AB, a Swedish multinational telecommunications company. BidCo US is a corporation organized under Delaware law for purposes of completing the proposed transaction. BidCo US is indirectly wholly owned by Polhem Infra KB, a Swedish limited partnership that was established in 2019 under Swedish law for the purpose of managing and investing in infrastructural assets for the benefit of the Swedish Parliament and the Swedish people. Telia Company AB and Polhem Infra KB have entered into a Master Share Purchase Agreement, pursuant to which Telia Company AB will sell its entire stake in 34 Telia Carrier subsidiaries, including Telia Carrier U.S., to Polhem Infra KB’s wholly owned indirect subsidiaries. The Wireline Bureau has referred the application to the relevant Executive Branch agencies for their views on any national security, law enforcement, foreign policy or trade policy concerns related to the foreign ownership of the applicants.
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FCC Enforcement Bureau Proposes $75,000 Fine Against US South Communications, Inc.
November 2, 2020 – The FCC’s Enforcement Bureau has issued a Notice of Apparent Liability for Forfeiture (NAL) against US South Communications, Inc. d/b/a US South & IWCOMM for apparently failing to timely respond to requests from the Universal Service Administrative Company (USAC) concerning telecommunications reporting worksheets. The NAL proposes US South pay a penalty of $75,000. Telecommunications carriers use the annual and quarterly telecommunications reporting worksheets (FCC Form 499-A and 499-Q) to calculate their contributions to the universal service fund and other mechanisms. After originally filing its 2018 annual worksheet, US South filed a revised worksheet which made substantial changes to its reported revenues for the 2017 calendar year. USAC then made numerous requests to US South to submit documentation supporting the revised revenue amounts, but each time, US South failed to respond by USAC’s deadline. The matter was then referred to the Enforcement Bureau, resulting in the instant NAL. US South has 30 calendar days to pay the full amount or file a written statement seeking reduction or cancellation of the proposed forfeiture.
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ACAM Broadband Coalition Petitions FCC For Six More Years Of A-CAM Funding
November 1, 2020 – The ACAM Broadband Coalition has filed a petition for expedited rulemaking with the FCC requesting the Alternative Connect America Cost Model (A-CAM) program be extending for an additional six years in exchange for deploying faster broadband speeds. Currently, there are 446 rate-of-return companies participating in the ACAM I and ACAM II programs. The ACAM Broadband Coalition’s proposal, however, does not include the 19 ACAM I companies that, in April 2019, declined to accept increased ACAM I support in exchange for increased deployment obligations. Support for those companies ends in 2026. But, the group’s proposal recommends seeking comment on their inclusion. This means the proposal would apply to A-CAM II participants. Currently, the FCC’s A-CAM II program provides universal service support to certain rural broadband providers, on a per-location basis, in exchange for deploying broadband service with speeds of at least 25/3 Mbps, 10/1 Mbps, or 4/1 Mbps based a location’s level of funding. That support is scheduled to end in 2028. In the petition, the ACAM Broadband Coalition “proposes to provide to current ACAM plan companies that voluntarily agree to participate in the enhanced ACAM plan six (6) years of additional support at current support levels in return for providing significantly faster broadband speeds to consumers more quickly than consumers otherwise would receive them.” Under the coalition’s plan, the requirement to deploy broadband to eligible locations at lower speeds would decrease due to the obligation to deploy service at higher speeds. Also, this would eliminate the requirement that some eligible locations be built to at 4/1 Mbps speed.
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Mergers & Acquisitions: Private Equity Firm Stonepeak Infrastructure Partners Buying RCN, Wave Broadband, Grande Communications, & En-Touch
November 1, 2020 – Stonepeak Infrastructure Partners has entered into an agreement to purchase Astound Broadband from TPG Capital and Patriot Media Management for $8.1 billion. Astound Broadband is the parent company of regional cable and broadband providers RCN Telecom Services, Grande Communications Networks, Wave Broadband, En-Touch Systems, and various subsidiaries of those companies. The group comprises the sixth largest cable and broadband operator in the U.S. TPG is a global alternative asset firm founded in 1992 with investment platforms across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG ultimately owns and controls Astound, RCN, Grande Communications, Wave Broadband, and En-Touch. The deal is expected to close in the second quarter of 2021.
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Mergers & Acquisitions: Intelsat Purchasing Gogo’s Commercial Aviation Business For $400 Million
November 1, 2020 – Commercial satellite operator Intelsat is purchasing Gogo Inc.’s commercial aviation business for $400 million. Intelsat is currently operating under Chapter 11 bankruptcy protection, but has received approval for the transaction. Gogo Inc., headquartered in Chicago, Illinois, is a provider of in-flight broadband Internet service and other connectivity services for commercial and business aircraft. According to Gogo’s third quarter 2020 financial disclosure, the sale remains on track to close before the end of the first quarter of 2021. Gogo has cleared the Hart-Scott-Rodino antitrust process and received all foreign antitrust approvals, although FCC and CFIUS clearance and one foreign telecommunications approval is still outstanding.
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