News Update - August 2021
Locast Copyright Infringement Lawsuit: Court Rules In Favor Of Broadcast TV Networks, Says Locast Does Not Qualify For Non-Profit Exemption
August 31, 2021 – The U.S. District Court for the Southern District Of New York has ruled in favor of the largest U.S. broadcast television networks in their copyright infringement lawsuit against Locast, a “non-profit” streaming service that makes local, over-the-air television available for free online. The broadcast TV networks filed their lawsuit in July 2019, alleging Locast’s streaming service was stealing their copyrighted content and illegally retransmitting it at will over the internet. They are seeking statutory damages for a massive number of instances of copyright infringement, and a permanent injunction enjoining and restraining Locast from offering its service. Locast, in response, claims its service does not infringe the copyrights of broadcasters because Locast believes its service is covered by the exemption in Section 111(a)(5) of the Copyright Act that applies to nonprofit organizations.
After the suit was initiated, both parties agreed to limit the scope of the litigation to the issue of applicability of the Section 111(a)(5) exemption, and each party subsequently filed for summary judgment in favor of their interpretation of the exemption. Locast, to be specific, sought summary judgment on its affirmative defense – that the copyright infringement suit should be dismissed because it qualifies for the exemption in Section 111(a)(5). That exemption rests on Locast’s secondary transmission of copyrighted content “without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.”
The Court, however, said “it is clear that the Locast service is not offered without charges other than those ‘necessary to defray the actual and reasonable costs of maintaining and operating’ its service.” It didn’t buy Locast’s characterization of the $5 monthly fee as a recommended donation:
“The payments defendants elicit from users are charges assessed on users to avoid constant service interruptions, regardless of whether defendants euphemistically call them publicly “recommended donations.” Locast users pay the minimum $5 monthly fee in exchange for month-long, uninterrupted service. It is not merely a recurring gift to a charitable cause. It is of no consequence that a number of users employ the service without paying. [Locast] still solicits, and receives, substantial amounts in charges from recipients for its uninterrupted service.”
In the end, the Court said portions of users’ payments are actually used to fund the expansion of Locast’s service. The Court explained that this exceeds the statutory exemption granted in Section 111(a)(5). All told, the Court denied Locast’s motion for summary judgment, struck Locast’s affirmative defense, and granted summary judgment in favor of the TV broadcasters.
T-Mobile Rural Call Completion Class Action Lawsuit: Court Again Dismisses Four Of Eight Counts Against T-Mobile
August 31, 2021 – The U.S. District Court for the Northern District Of Illinois, Eastern Division, has dismissed four of the eight counts of a putative class action lawsuit filed against T-Mobile by Craigville Telephone Company, Inc. d/b/a AdamsWells Internet Telecom TV, and Consolidated Telephone Company d/b/a CTC. In their suit, the two rural telephone company Plaintiffs allege injuries and claims for relief stemming from T-Mobile’s admitted violations of the FCC’s rural call completion rules a few years ago. They claim T-Mobile “engaged in a scheme to perpetuate call connection issues for calls originating from cell phones and terminating to landline telephones located in certain rural areas, which they covered up by inserting false ring tones on the caller’s end.”
The four rejected claims were previously dismissed without prejudice from the Plaintiffs’ first complaint, allowing the Plaintiffs to submit a second amended complaint in December 2020 which attempted to correct the deficiencies in their arguments. This time the Court dismissed the four counts with prejudice under Federal Rule of Civil Procedure 12(b)(6) – failure to state a claim upon which relief can be granted. The following were dismissed with no option to refile: Count IV: Violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act; Count V: RICO Violation; Count VI: Tortious Interference With Prospective Economic Advantage; and Count VII: Violation Of Illinois Consumer Fraud And Deceptive Business Practices Act. The following claims against T-Mobile remain active: Count 1 – Violation Of Section 201(b) Of The Communications Act (fake ringtones); Count 2 – Violation Of Section 201(b) Of The Communications Act (failure to ensure delivery of calls); Count 3 – Violation Of Section 202(a) Of The Communications Act; and Count 8 – Civil Conspiracy.
T-Mobile Releases More Information On Massive Data Breach
August 27, 2021 – T-Mobile has released additional information on the massive data breach it recently experienced. An investigation of the incident, supported by security experts Mandiant, revealed how cyber attackers illegally gained entry to T-Mobile servers. The vulnerability has been fixed and T-Mobile is “confident that there is no ongoing risk to customer data from this breach.” T-Mobile also provided the following update on the type of customer information that was compromised:
On August 17th we confirmed that T-Mobile’s systems were subject to a criminal cyberattack that compromised data of millions of our customers, former customers, and prospective customers. Fortunately, the breach did not expose any customer financial information, credit card information, debit or other payment information but, like so many breaches before, some SSN, name, address, date of birth and driver’s license/ID information was compromised. To say we are disappointed and frustrated that this happened is an understatement. Keeping our customers’ data safe is a responsibility we take incredibly seriously and preventing this type of event from happening has always been a top priority of ours. Unfortunately, this time we were not successful.
Mergers & Acquisitions: Poka Lambro Buying Vexus Fiber
August 27, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by NTS Communications, LLC d/b/a Vexus Fiber and Poka Lambro Telecommunications, Ltd. requesting consent to transfer certain assets of Vexus Fiber to Poka Lambro. Comments are due on or before September 10, 2021, and reply comments are due September 17, 2021.
Vexus Fiber provides competitive telecommunications services and other services in Texas, Louisiana, New Mexico, and Arizona. It is registered as a competitive local exchange carrier (LEC) in Texas and Louisiana and has been designated as an eligible telecommunications carrier (ETC) in Texas. Vexus Fiber provides Lifeline services as well as interstate telecommunications services to customers over fiber facilities in the west Texas communities of Brownfield, Lamesa, Ropesville, Wilson, and Meadow.
Poka Lambro is a wholly owned subsidiary of Poka Lambro Telephone Cooperative, Inc., a Texas cooperative and incumbent LEC. Poka Lambro provides telecommunications services and other services as a competitive LEC in Post, Tahoka, and Seagraves, Texas. Pursuant to the transaction, Poka Lambro will acquire substantially all of Vexus’ fiber facility assets and Vexus’ customers. Following consummation of the deal, Poka Lambro will provide competitive local exchange and long-distance services to West Texas customers on substantially the same terms and conditions as previously provided by Vexus Fiber.
NTIA Receives Over 230 Applications For Broadband Infrastructure Program Funding
August 24, 2021 – The U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) has announced it has received over 230 applications for its Broadband Infrastructure Program (BIP) seeking more than $2.5 billion in funding across 49 states and territories. NTIA will award BIP grants to “covered partnerships” for “covered broadband projects.” Covered partnership means a partnership between: (1) a State, or one or more political subdivisions of a State; and (2) a provider of fixed broadband service. Covered broadband project means a competitively and technologically neutral project for the deployment of fixed broadband service that provides qualifying broadband service (25/3 Mbps and low latency) in an eligible service area. The term eligible service area means a census block in which broadband service is not available at one or more households or businesses in the census block.
NTIA expects the award process will be highly competitive. Funding priority will be given to applications with proposed broadband projects that: (1) are designed to provide broadband service to the greatest number of households in an eligible service area; (2) will provide broadband service to rural areas (an eligible service area that is wholly within any area other than: (i) a county, city, or town that has a population of more than 50,000 inhabitants; and (ii) the urbanized area contiguous and adjacent to a city or town of more than 50,000 inhabitants); (3) are the most cost-effective, prioritizing such projects in areas that are the most rural; and (4) are designed to provide broadband service with speeds of at least 100/20 Mbps. NTIA expects to complete its selection of award by November 15, 2021, and begin announcing winners no earlier than November 29, 2021.
T-Mobile Confirms Data Breach, Some Customer Information Compromised
August 18, 2021 – Mobile wireless provider T-Mobile has confirmed it was the victim of a cyber attack which resulted in a breach of customer information. T-Mobile estimates that information related to roughly 7.8 T-Mobile customers were stolen by hackers. Also, over 40 million records from past or prospective T-Mobile customers were compromised by the cyberattack. According to a statement released by T-Mobile, “[s]ome of the data accessed did include customers’ first and last names, date of birth, SSN, and driver’s license/ID information for a subset of current and former postpay customers and prospective T-Mobile customers.” The investigation of the breach remains ongoing.
FCC Seeking Comment On Two Section 253 Petitions For Declaratory Ruling
August 13, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on two petitions for declaratory ruling filed pursuant to Section 253(d) of the Communications Act. Comments are due on or before September 22, 2021. Reply comments are due October 12, 2021. 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).
The first Section 253 petition was filed by Missouri Network Alliance, LLC d/b/a Bluebird Network. In the petition, Bluebird Network requests that the FCC “preempt a per linear foot fee charged by the city of Columbia, Missouri for use of its rights of way on the grounds that the fee requirement violates Section 253(a) of the Act.”
In the second petition, MCC Iowa LLC (Mediacom) argues that rights and privileges conferred to one ISP under a contract with the city of West Des Moines, Iowa for the construction of a conduit network, together with regulatory and other burdens imposed on other ISPs by West Des Moines, effectively prohibit Mediacom from providing telecommunications services in violation of Section 253(a) of the Communications Act.
USDA Awards $167 Million For New Broadband Networks In 12 States
August 11, 2021 – The U.S. Department of Agriculture has awarded $167 million to deploy broadband infrastructure in rural areas in 12 states. The funding consists of loans, grants, and loan/grant combinations, and is part of the second round of USDA’s ReConnect Program. Award recipients will use the funding to deploy new broadband networks in areas without sufficient access to high-speed internet in the states of Alaska, Arizona, Colorado, Georgia, Missouri, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Utah and Virginia. The full list of award recipients along with descriptions of their broadband projects is available here.
FCC Releases Mobile Broadband Map Showing 4G LTE Coverage
August 6, 2021 – The FCC has announced the release of a new online map showing 4G LTE mobile broadband coverage, as of May 15, 2021, from the country’s largest mobile providers – AT&T Mobility, T-Mobile, UScellular, and Verizon. The map was created using data that was voluntarily submitted by the four mobile wireless providers outside of the FCC’s normal Form 477 data collection. Additional information is available form the FCC News Release. The map is publicly available online.
Big Tech Accountability For Broadband Act Introduced In House
August 3, 2021 – Representative Jack Bergman (R-MI) has introduced the Big Tech Accountability for Broadband Act, which would require Big Tech companies to contribute to the universal service fund (USF) to help “finance rural broadband programs.” Specifically, the bill would require the FCC to “promulgate regulations to require covered businesses to contribute to the Federal universal service support mechanism” within 180 days of enactment. A covered business is defined in the legislation as a business offering an online platform which has more than 30 million monthly users in the U.S. or more than 300 million monthly worldwide users, and that had more than $10 billion in global revenue during the most recent tax year. The term online platform is defined as a website, online or mobile application, mobile operating system, search engine, e-commerce site, or other online service. Additionally, the bill directs the FCC to consider creating a new rule prohibiting telecommunications carriers from recovering USF contributions from end users that are “considered by the [FCC] to be unserved or underserved with respect to broadband internet access service.”
USAC Files Fourth Quarter 2021 USF Size Projections
August 2, 2021 – The Universal Service Administrative Company (USAC) has filed the fund size and administrative cost projections for the federal universal service support mechanisms for the fourth quarter of calendar year 2021. USAC’s filing shows the following total projected 4Q 2021 funding requirements for each federal Universal Service Fund (USF) support mechanism:
High Cost Support Mechanism – $1.1377 billion (The 3Q 2021 funding requirement was $1.289 billion; The 2Q 2021 requirement was $1.413 billion)
Low Income Support Mechanism – $230.93 million (The 3Q 2021 funding requirement was $286.26 million; The 2Q 2021 requirement was $254.82 million)
Rural Health Care Support Mechanism – $153.12 million (The 3Q 2021 funding requirement was $149.39 million; The 2Q 2021 requirement was $149.36 million)
Connected Care Pilot Program – $8.55 million (The 3Q 2021 funding requirement was $8.59 million; The 2Q 2021 requirement was $8.76 million)
E-Rate Schools and Libraries Support Mechanism – $594.14 million (The 3Q 2021 funding requirement was $579.84 million; The 2Q 2021 requirement was $634.61 million)
USAC projects a consolidated budget of $61.14 million for 4Q 2021. This breaks out into $30.89 million in direct costs for all USF support mechanisms, and $30.25 million in total joint and common costs which include costs associated with billing, collection, and disbursement of universal service funds. (The consolidated budget for 3Q 2021 was $59.83 million, and it was $60.58 million for 2Q 2021.)
The FCC will use the of the quarterly funding requirements for the four USF support mechanisms, the projected administrative expenses, and the USF contribution base amount, to establish a quarterly USF contribution factor. Then, USAC will bill USF contributors on a monthly basis for their individual obligations based on the USF contribution factor, collect these owed amounts, and distribute USF support to eligible recipients.
Infrastructure Bill Includes $65 Billion For High-Speed Broadband
August 2, 2021 – The U.S. Senate is expected to vote this week on a $1 trillion infrastructure bill – the Infrastructure Investment and Jobs Act. It includes $65 billion to fund the deployment of broadband networks in unserved and underserved areas and to help low-income Americans afford monthly broadband service. Among other things, the bill would create a $42.45 billion Broadband Equity, Access, and Deployment Program, which would provide grants for broadband projects to bridge the digital divide. NTIA would administer the program by distributing funding to states, who would then award grants for broadband deployment. Of the total amount, $100 million will be allocated to each state, and $100 million will be allocated to and divided equally among U.S. territories. The White House released a fact sheet on the bipartisan Infrastructure Investment and Jobs Act which describes the $65 billion investment in high-speed internet as follows:
Broadband internet is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected. Yet, by one definition, more than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds – a particular problem in rural communities throughout the country. The legislation’s $65 billion investment – which builds on the billions of dollars provided for broadband deployment in the American Rescue Plan – will help ensure every American has access to reliable high-speed internet with an historic investment in broadband infrastructure deployment, just as the federal government made a historic effort to provide electricity to every American nearly one hundred years ago.
The bill will also help lower prices for internet service by requiring funding recipients to offer a low-cost affordable plan, by requiring providers to display a “Broadband Nutrition Label” that will help families comparison shop for a better deal, and by boosting competition in areas where existing providers aren’t providing adequate service. It will also help close the digital divide by passing the Digital Equity Act (which creates new grant programs for digital inclusion), by requiring the Federal Communications Commission to adopt rules banning digital redlining, and by creating a new, permanent program to help more low-income households access the internet. Over one in four households will be eligible for this new Affordable Connectivity Benefit.
Senators Introduce Privacy Legislation
August 1, 2021 – U.S. Senators Roger Wicker (R-MS) and Marsha Blackburn (R-TN) have introduced the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act. According to the Senators’ press release, the bill “would provide Americans with more choice and control over their data and direct businesses to be more transparent and accountable for their data practices,” and would “enhance the Federal Trade Commission’s (FTC) authority and provide additional resources to enforce the Act.”
According to the Senators’ press release, the bill would provide Americans with more choice and control over their data by:
Requiring businesses to allow consumers to access, correct, delete, and port their data;
Prohibiting businesses from processing or transferring consumers’ sensitive data without their consent;
Prohibiting businesses from denying consumers products or services for exercising their privacy rights;
Minimizing the amount of consumer data businesses can collect, process, and retain;
Limiting secondary uses of consumer data without their consent; and
Establishing uniform data protections across the country enforced by the Federal Trade Commission (FTC) and state attorneys general.
The bill would direct businesses to be more transparent and accountable for their data practices by:
Requiring businesses to disclose a privacy policy to consumers detailing their data collection, processing, and transfer activities, and notify consumers of any material changes to those activities;
Requiring businesses to conduct privacy impact assessments of data processing activities that may present a heightened risk of harm to consumers;
Requiring businesses to secure consumers’ data and maintain internal controls and reporting structures to assess data privacy risks to consumers; and
Prohibiting businesses from processing data in ways that violate federal Civil Rights laws.
Charter Communications Sued Again In Colorado For Copyright Infringement
August 1, 2021 – Charter Communications is fighting another copyright infringement lawsuit in U.S. District Court for the District of Colorado. A group of recording companies have filed a lawsuit alleging Charter is liable for contributory and vicarious copyright infringement based on the direct infringements of its subscribers. The Plaintiffs claim they identified infringing subscribers and notified Charter via multiple infringement notices (more than 150,000), and are seeking relief for claims of infringement that accrued from July 26, 2018 to present. Many of the same Plaintiffs filed a nearly identical lawsuit against Charter in March 2019 (Warner Records Inc. et al. v. Charter Communications, Inc., Civ. No. 19-cv-874-RBJ-MEH (D. Colo.)). They say Charter has “persisted in contributing to and profiting from its subscribers’ infringement of Plaintiffs’ copyrighted works through Charter’s network, even after receiving Plaintiffs’ notices of claims in March 2016, and even after Plaintiffs initiated formal action in March 2019.” The Plaintiffs are seeking statutory damages.
FCC Announces Counties Where Forbearance From Lifeline Voice Service Requirement Applies
August 1, 2021 – The FCC’s Wireline Competition Bureau has announced the counties in which conditional forbearance from the obligation to offer Lifeline-supported voice service applies for those eligible telecommunications carriers (ETCs) that are designated for purposes of receiving both high-cost and Lifeline support. Forbearance does not apply to Lifeline-only ETCs.
Pursuant to the FCC’s 2016 Lifeline Order, forbearance from high-cost/Lifeline ETCs’ obligation to offer and advertise Lifeline voice service in counties where the following conditions are met: (1) 51% of Lifeline subscribers in the county are obtaining broadband Internet access service; (2) there are at least three other providers of Lifeline broadband Internet access service that each serve at least 5% of the Lifeline broadband subscribers in that county; and (3) the ETC does not actually receive federal high-cost universal service support. The Appendix to the Bureau’s Public Notice lists the counties where conditional forbearance will apply, effective September 21, 2021.
