Mid-Month News Update - June 1-15 - Broadband, USF, FCC, Copyright Lawsuits, Google, & More
Emergency Connectivity Fund Application Window Opens June 29th
June 15, 2021 – The Federal Communications Commission has announced that the Emergency Connectivity Fund 45-day application window will extend from June 29 to August 13, 2021. The new $7.17 billion Emergency Connectivity Fund Program will provide funding for schools and libraries for the purchase, during the COVID-19 pandemic, of connected devices and broadband connections for off-campus use by students, school staff, and library patrons. During the 45-day application period, eligible schools, libraries, and consortia of schools and libraries may submit requests for funding for the 2021 – 2022 school year.
The FCC will conduct a webinar on June 25th at 2:00 p.m. EDT that will provide an overview of the Emergency Connectivity Fund, including applicant eligibility, supported equipment and services, reasonable support amounts, and the application and invoicing processes. The webinar will be streamed online at www.fcc.gov/live. Registration is not required. Additional information about the Emergency Connectivity Fund and instructions on how to apply are available online at www.fcc.gov/emergency-connectivity-fund.
Court Grants Preliminary Injunction Halting Enforcement Of New York Affordable Broadband Act
June 11, 2021 – The U.S. District Court for the Eastern District of New York has granted a preliminary injunction which stops the enforcement of New York’s Affordable Broadband Act. Passed in April 2021, the law would require Internet service providers “to offer qualifying low-income costumers high-speed broadband service at or below certain price ceilings” beginning June 15, 2021. Specifically, the NY Affordable Broadband Act would require ISPs to offer qualifying low-income households at least two service plans: (i) download speeds of at least 25 Mbps at no more than $15 per month; or (ii) download speeds of at least 200 Mbps at no more than $20 per month.
Shortly after passage of the law, a group of trade associations that represents ISPs – ACA Connects–America’s Communications Association; the Satellite Broadcasting & Communications Association; the New York State Telecommunications Association, Inc.; CTIA–The Wireless Association; USTelecom–The Broadband Association; and NTCA–The Rural Broadband Association – filed a lawsuit on behalf of their members to have the court declare the law is preempted by federal law. They also sought preliminary and permanent injunctive relief to preventing New York from enforcing or giving effect to the law.
The Court’s order grants the motion for a preliminary injunction, finding the ISP associations have established (1) they are likely to succeed on the merits, (2) they are likely to suffer irreparable harm if the injunction is not granted, (3) that the balance of the equities tips in their favor, and (4) that the injunction serves the public interest. Notably, the Court provided a lengthy analysis concluding the ISP associations’ have shown a likelihood of success on their argument that the NY Affordable Broadband Act is preempted by federal law based on theories of conflict preemption and field preemption. The Court said the law “is rate regulation, and rate regulation is a form of common carrier treatment,” which “directly contravenes the FCC’s determination that broadband internet investment, innovation, and availability best obtains in a regulatory environment free of threat of common-carrier treatment, including its attendant rate regulation.”
Louisiana Enacts $180 Million “GUMBO” Broadband Grant Program
June 11, 2021 – The Louisiana legislature has passed a law (HB648) creating a new state broadband grant program titled “Granting Unserved Municipalities Broadband Opportunities.” It now awaits the Governor’s signature. The GUMBO program will earmark $180 million in federal funds for grants, and is expected to bring broadband Internet access service to 400,000 households in Louisiana. Under the program, entities eligible to apply for grants include providers of broadband service, including providers operated by a local government, cooperatives, or any partnerships thereof. Eligible broadband projects must be located in an unserved area of an eligible parish seeking to provide broadband service to homes, households, businesses, educational facilities, healthcare facilities, and community anchor points not currently served with broadband. A project that is primarily engaged in middle-mile, backhaul, or similar work is not an eligible project. The program defines an unserved area as a designated geographic area that is presently without access to 25/3 Mbps broadband service offered by a wireline or fixed wireless provider. Grant recipients will be required to provide matching funds of at least 20 percent of the total estimated cost of their awarded broadband projects.
Third Quarter 2021 USF Contribution Factor: 31.8 Percent
June 10, 2021 – The Federal Communications Commission’s Office of Managing Director has announced that the proposed universal service fund (USF) contribution factor for the third quarter of 2021 will be 31.8 percent. For the third quarter of 2021, the Universal Service Administrative Company (USAC) projects $9.665944 billion in total interstate and international end-user telecommunications revenues will be collected. USAC estimates that $2.313400 billion is needed to cover the total demand and expenses for all Federal universal service support mechanisms in the third quarter of 2021. This includes projected program support, administrative expenses, and true-ups and adjustments, and breaks out as follows:
E-Rate Schools & Libraries: $579.84 million
Rural Health Care: $149.39 million
High-Cost: $1.28932 billion
Lifeline: $286.26 million
Connected Care: $8.59 million
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.
FCC Releases Final Agenda For June 17, 2021 Open Meeting
June 10, 2021 – The Federal Communications Commission has released the final agenda for its next open meeting set for Thursday, June 17, 2021, at 10:30 am:
Protecting Against National Security Threats to the Communications Supply Chain through the Equipment Authorization and Competitive Bidding Programs – The Commission will consider a Notice of Proposed Rulemaking and Notice of Inquiry seeking comments on steps it could take to secure the nation’s critical communications networks through its equipment authorization and competitive bidding programs. (ET Docket No. 21-232; EA Docket No. 21-233)
Allowing Earlier Equipment Marketing and Importation Opportunities – The Commission will consider a Report and Order that would adopt changes to the equipment authorization rules to allow expanded marketing and importation of radiofrequency devices prior to certification, with conditions. (ET Docket No. 20-382)
Improving the Emergency Alert System and Wireless Emergency Alerts – The Commission will consider a Report and Order and Further Notice of Proposed Rulemaking to implement section 9201 of the National Defense Authorization Act for Fiscal Year 2021, which is intended to improve the way the public receives emergency alerts on their mobile phones, televisions, and radios. (PS Docket Nos. 15-94, 15-91)
Improving Robocall and Spoofing Input from Private Entities – The Commission will consider a Report and Order to implement Section 10(a) of the TRACED Act by adopting a streamlined process that will allow private entities to alert the FCC’s Enforcement Bureau about suspected unlawful robocalls and spoofed caller ID. (EB Docket No. 20-374)
Promoting Telehealth for Low-Income Consumers – The Commission will consider a Second Report and Order that would provide guidance on the administration of the Connected Care Pilot Program and further instructions to program participants. (WC Docket No. 18-213)
Exploring Spectrum Options for Devices Used to Mark Fishing Equipment – The Commission will consider a Notice of Proposed Rulemaking that would satisfy the Commission’s statutory obligation in Section 8416 of the National Defense Authorization Act for Fiscal Year 2021 to initiate a rulemaking proceeding to explore whether to authorize devices that can be used to mark fishing equipment for use on Automatic Identification System (AIS) channels consistent with the core purpose of the AIS to prevent maritime accidents. (WT Docket No. 21-230)
Improving Low Power FM Radio – The Commission will consider an Order on Reconsideration of a proceeding to modernize the LPFM technical rules. (MB Docket No. 19-193)
Enforcement Bureau Action – The Commission will consider an enforcement action.
Another DMCA Lawsuit: Record Labels Sue Frontier Communications For Copyright Infringement
June 8, 2021 – A group of the largest record companies in the U.S. have filed a copyright infringement lawsuit against Frontier Communications, one of the country’s largest Internet service providers. The Plaintiffs are UMG Recordings, Inc., Capitol Records, LLC, and ABKCO Music & Records, Inc.; Sony Music Entertainment, Arista Music, Arista Records LLC, Sony Music Entertainment US Latin, and Zomba Recording LLC; and Plaintiffs Atlantic Recording Corporation, Elektra Entertainment Group Inc., Lava Records LLC, Rhino Entertainment LLC, Warner Music Inc., Warner Music International Services Limited, and Warner Records Inc. They allege Frontier is secondarily liable for its broadband subscribers’ direct infringement of 2,856 copyrighted works. According to the complaint, these infringements, which began on May 1, 2021, are purported to have occurred after Frontier received multiple notices of subscribers’ infringing activity, and are ongoing. Like similar lawsuits filed against other ISPs, the record companies claim Frontier failed to adequately respond to DMCA notices by terminating infringing subscribers:
At all pertinent times, Frontier knew that its subscribers were using its high-speed network to illegally download and distribute Plaintiffs’ sound recordings on Frontier’s network. Frontier has received hundreds of thousands of copyright infringement notices from copyright owners, including Plaintiffs, but chose not to act on those notices and address the rampant infringement on its network.
The suit was filed in U.S. District Court for the Southern District of New York (Civ. Case No.21-cv-5050). The record companies make two claims in the complaint: (1) contributory copyright infringement; and (2) vicarious copyright infringement. As for relief, the Plaintiffs are seeking statutory damages for each violation of each copyrighted work.
Yukon-Waltz Telephone Company Petitions FCC To Convert To Average Schedule Regulation
June 8, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a petition for waiver filed by Yukon-Waltz Telephone Company which requests approval to convert to average schedule regulation. Comments are due on or before July 8, 2021, and reply comments are due July 23, 2021. Yukon-Waltz is a rate-of-return carrier that provides voice and broadband services within approximately 10 square miles in southwestern Pennsylvania. It converted from an average schedule company to a cost-based rate-of-return company in 2011. Yukon-Waltz explains that if it is allowed to convert back to average schedule, it “will experience a reduced administrative and regulatory burden that will reduce costs, which will allow [it] to better focus limited time and resources on providing service, maintaining its network, and deploying broadband-capable facilities in conjunction with its obligations under the [FCC’s] high-cost universal service rules.”
Ohio Files Lawsuit To Have Google Classified As Common Carrier
June 8, 2021 – The state of Ohio has filed a lawsuit against Google which seeks to have Google classified as a common carrier under Ohio law, and prevent Google from prioritizing its own businesses and products in search results. The Complaint For Declaratory Judgment and Injunctive Relief was filed in Ohio state court in Delaware County. Ohio claims that declaring Google a common carrier will result in fairness:
“Ohio has an interest in ensuring that Google, its users, and the entities whose information Google carries are aware that Google Search is a common carrier under Ohio law. Ohio also has an interest in ensuring that as a common carrier Google Search does not unfairly discriminate against third party websites; that Google carries all responsive search results on an equal basis; and that it provides the public with ready access to organic search results that the Google Search algorithms produce.”
FCC Waives Budget Control Mechanism For Rate-Of-Return Carriers
June 3, 2021 – The Federal Communications Commission (FCC) has issued an Order which waives application of the budget control mechanism for rate-of-return carriers that receive High Cost Loop Support (HCLS) and Connect America Fund Broadband Loop Support (CAF BLS). The waiver effectively sets the budget control adjustment factor to 0 percent for the 2021-2022 tariff year.
There is a “budget” of $2 billion per year for total high-cost universal service support for rate-of-return carriers. In the event total support is forecasted to exceed the $2 billion budget in a given year, the budget control mechanism kicks in to produce support reductions on a going forward basis to forecasted HCLS and CAF BLS disbursements. This ensures the rate-of-return budget only increases to match the rate of inflation.
In May, the Universal Service Administrative Company (USAC) published budget control mechanism data showing an 8.5814 percent the budget control adjustment factor for July 1, 2021, through June 30, 2022. For comparison purposes, the prior budget control adjustment factor was only 3 percent.
On its own motion, the FCC has waived application of the budget control mechanism for the 2021-2022 tariff year “given unique cash flow challenges related to the pandemic.” The FCC noted that the 8.6 percent adjustment factor, which is over twice as high as the prior adjustment factor, is problematic for rate-of-return carriers that are continuing to deal with financial issues related to the coronavirus pandemic:
These circumstances could pose significant burdens on legacy carriers, by subjecting them to insufficient cash flow at a time when they are facing increased expenses. To ensure that these small companies are not subject to financial strain, we find it is in the public interest to waive the application of our rules. The last year of the COVID-19 pandemic has put all Americans under strain and demonstrated the importance of broadband. Telecommunications companies, including legacy companies serving some of the most rural areas of the country, may be subject to increased costs to provide safe working conditions, maintain existing services, and meet the demands of new customers. Granting a waiver here is also consistent with relief the Commission provided in other contexts in acknowledgment of the unprecedented challenges raised by the pandemic to carriers and consumers.
NTIA Announces $1 Billion For Broadband Grants To Tribal Lands
June 3, 2021 – The National Telecommunications and Information Administration (NTIA) has announced the availability of $1 billion in grants to expand broadband access and adoption on Tribal lands. NTIA’s Tribal Broadband Connectivity Program will distribute grants to eligible Native American, Alaska Native, and Native Hawaiian entities to support broadband infrastructure deployment, and to facilitate digital inclusion, workforce development, telehealth, and distance learning. Applications are due September 1, 2021. Further information about the Tribal Broadband Connectivity Program and its requirements are available via the Notice Of Funding Opportunity.
FCC Reaches Agreements With Nationwide Mobile Wireless Providers Over Delivering Vertical Location Information With 911 Calls
June 3, 2021 – The Federal Communications Commission (FCC) has entered into consent decrees with the three largest mobile wireless service providers concerning the delivery of vertical location information in connection with 911 calls. In 2015, the FCC established rules requiring nationwide mobile wireless carriers to deliver z-axis (vertical) location information for 911 wireless calls in the nation’s largest 25 markets by April 3, 2021, and certify deployment by June 2, 2021. The big three mobile wireless carriers – AT&T, T-Mobile, and Verizon – asked for an eighteen-month extension of the deadlines, citing testing challenges due to the COVID-19 pandemic. The FCC’s Enforcement Bureau then began investigating their progress on compliance, which eventually led to consent decrees. The consent decrees (AT&T Consent Decree, T-Mobile Consent Decree, and Verizon Consent Decree) require each company to take the following actions:
Start providing wireless 911 callers’ z-axis location information to 911 call centers within seven days;
Implement a compliance plan that includes specific testing, reporting, and public interest conditions; and
Pay a $100,000 settlement amount.
FCC Enters Into Memorandum Of Understanding With Australia To Fight Illegal Robocalls
June 3, 2021 – The Federal Communications Commission (FCC) has entered into a Memorandum of Understanding (MOU) with Australia’s telecom regulator, the Australian Communications and Media Authority on Mutual Assistance, to work together to fight illegal robocalls. The MOU – Mutual Assistance in the Enforcement of Laws on Certain Unlawful Communications – sets the course for the agencies to “develop and coordinate a global approach to addressing unlawful robocalls or robotexts, and the unlawful use of inaccurate caller ID information or ‘spoofing.’” Among other things, the MOU states that the two regulatory agencies understand that it is in their common public interest to:
Cooperate with respect to the enforcement against illegal robocalls and robotexts, unlawful caller ID spoofing, and other violations of law, including sharing complaints and other relevant information and providing investigative assistance;
Facilitate research and education related to unlawful robocalls and caller ID spoofing or overstamping;
Facilitate mutual exchange of knowledge and expertise through training programs and staff exchanges;
Promote a better understanding by each participant of economic and legal conditions and theories relevant to the enforcement of applicable laws; and
Inform each other of developments in their respective countries that relate to the MOU in a timely fashion.
NTCA, CTIA, & USTelecom Tell Fourth Circuit To Overturn Decision Finding Cox Communications Liable For Subscribers’ Copyright Infringement
June 1, 2021 – NTCA – The Rural Broadband Association, CTIA – The Wireless Association, and USTelecom – The Broadband Association have jointly filed an amicus curiae brief in Sony v. Cox urging the U.S. Court of Appeals for the Fourth Circuit to overturn the District Court’s judgment in favor of Sony. In July 2018, a group of recording companies sued Cox Communications for contributory and vicarious copyright infringement based on Cox’s failure to prevent its broadband subscribers from illegally downloading copyrighted material. Cox was ultimately found to have vicariously and contributorily infringed 10,017 works, and ordered to pay $1 billion in damages. Cox appealed to the Fourth Circuit. In their amicus brief, NTCA, CTIA, and USTelecom claim the District Court incorrectly found Cox had knowledge of infringement by its broadband subscribers. The broadband associations argue that the DMCA notices sent by Sony to Cox, which contained limited information, did not give Cox specific knowledge of copyright infringement that could be acted upon. They further argue that the District Court’s ruling is inconsistent with established precedent and could lead ISPs to terminate broadband service to subscribers based on unproven and unverifiable allegations of past copyright infringement.
FCC Releases List Of Census Blocks Where Lifeline Support For Voice-Only Services Will Remain Available
June 1, 2021 – The FCC’s Wireline Competition Bureau has announced the U.S. Census blocks where Lifeline support for voice-only service will continue to be available from December 1, 2021 through November 30, 2022. In these Census blocks there is only one Lifeline provider, necessitating the continuation of support of voice-only services. Support will continue at $5.25 per month for qualifying voice-only services. The list of Census blocks is available on the Universal Service Administrative Company’s website.
USAC Files Third Quarter 2021 USF Contribution Base Data: $9.665 Billion
June 1, 2021 – The Universal Service Administrative Company (USAC) has filed data detailing the universal service fund (USF) contribution base to be used for the third quarter of calendar year 2021. The data shows the total collected interstate and international end-user revenue amount that will be used to determine the contribution factor for all universal service support mechanisms. USAC has determined that the total projected end-user revenue base for the third quarter of 2021 is $9,665,944,070.
To provide a comparison, the USF contribution bases for the past six quarters are as follows:
Second Quarter 2021: $9,905,669,690
First Quarter 2021: $10,068,712,553
Fourth Quarter 2020: $10,428,377,862
Third Quarter 2020: $10,219,123,520
Second Quarter 2020: $10,865,131,593
First Quarter 2020: $11,129,976,956
USAC’s estimated revenue base for the third quarter of 2021 was derived from projected collected revenue for July to September 2021 reported by telecommunications service providers using FCC Form 499-Q submitted in May 2021 – 4,654 reporting carriers, of which 3,189 are USF contributors and 1,465 are non-contributing de minimis carriers. As of May 19, 2021, USAC has yet to receive information from 261 non-de minimis telecommunications service providers that had previously submitted information to USAC. Upon Federal Communications Commission approval of the total USF contribution base, the quarterly funding requirements for the four USF support mechanisms, and projected administrative costs, the FCC will establish a USF contribution factor for the third quarter of 2021. USAC will then bill USF contributors on a monthly basis for their individual obligations based on the approved contribution factor.
