News Update - July 2024
FCC Announces Updated Lifeline Minimum Service Standards & Indexed Budget Amount
July 30, 2024 – The FCC’s Wireline Competition Bureau has announced the updated minimum service standards for Lifeline-supported services and the budget for federal universal service support for the Lifeline program for calendar year 2025.
Mobile Broadband Minimum Service Standard – Due to the pause in the increase in the Lifeline minimum service standards for mobile broadband data capacity, the standard will continue to be 4.5 GB per month until at least December 1, 2025.
Fixed Broadband Minimum Service Standard For Data Usage Allowance – Beginning December 1, 2024, the Lifeline minimum service standard for fixed broadband data usage will be 1230 GB per month, as calculated from the 2024 Urban Rate Survey data.
Mobile Voice Telephony Minimum Service Standard – Pursuant to the 2016 Lifeline Order, on December 1, 2024, the Lifeline minimum service standard for mobile voice service will remain unchanged, at 1000 minutes per month.
Annual Lifeline Program Budget – The 2016 Lifeline Order adopted an initial budget of $2.25 billion for the calendar year beginning January 1, 2017, and stated that the budget amount will be indexed to inflation in accordance with the Consumer Price Index for all items from the Department of Labor, Bureau of Labor Statistics. Based on this calculation, the indexed budget for federal universal service support for the Lifeline program for the calendar year beginning January 1, 2024 was $2,778,691,284, and the indexed budget for the calendar year beginning January 1, 2025 will be $2,892,617,627.
FCC Approves E-Rate Funding For Wi-Fi Hotspots
July 29, 2024 – The Federal Communications Commission (FCC or Commission) has approved a Report and Order and Further Notice of Proposed Rulemaking “to modernize the E-Rate program to meet the evolving needs of schools and libraries around the country by allowing for the distribution of Wi-Fi hotspots and services to students, school staff, and library patrons for off-premises use.” More specifically, in the Report and Order, the FCC adopted rules that do the following:
Allow schools and libraries to use E-Rate funding to loan out Wi-Fi hotspots and support high-speed internet access for students, school staff, and library patrons in both rural and urban parts of the country;
Adopt a budget mechanism that sets a limit on the amount of support that an applicant can request for Wi-Fi hotspots and services over a three-year period. In the event that demand for E-Rate support exceeds available funding in a given funding year, eligible on-premises category one and category two equipment and service requests will be prioritized and funded before eligible off-premises equipment and service requests;
Adopt numerous safeguards to protect the integrity of the E-Rate program, including measures to ensure the supported Wi-Fi hotspots and services are in use, are used for educational purposes, are not funded through other sources, and are properly documented for auditing purposes; and
Require compliance with the Children’s Internet Protection Act.
In the Further Notice of Proposed Rulemaking, the FCC seeks public comment “on additional ways to ensure the continued success of such Wi-Fi hotspot lending programs funded through the E-Rate program.” Comments are due 45 days after the date the Further Notice is published in the Federal Register. Reply comments are due 75 days after Federal Register publication.
FCC Consent Decree Resolves Investigation Of Charter Communications’ Network Outage And 911 Outage
July 29, 2024 – The FCC’s Enforcement Bureau has entered into a Consent Decree with Charter Communications, Inc., which resolves an investigation into whether Charter violated the FCC’s rules related to network outages and outages impacting 911 service. As part of the Consent Decree settling the investigation, Charter admits that it: (1) failed to timely notify more than 1,000 public safety answering points (PSAPs) of an outage on February 19, 2023 (Outage); (2) failed to meet reporting deadlines for reports in the NORS associated with the Outage, and separate outages on March 31 and April 26, 2023; and (3) failed to meet other NORS reporting deadlines associated with hundreds of planned maintenance outages, all in violation of the FCC’s rules. Additionally, “Charter has agreed to implement a robust compliance plan, including cybersecurity provisions related to compliance with the Commission’s 911 rules, and will pay a $15,000,000 civil penalty.”
Fifth Circuit Court Of Appeals Declares Universal Service Contribution Mechanism To Be An Unconstitutional Tax
July 24, 2024 – In a 9-3 en banc decision, the United States Court of Appeals for the Fifth Circuit has declared the universal service contribution mechanism to be an unconstitutional tax. The opinion, in Consumers’ Research et al. v. FCC, Case: 22-60008, granted a petition for review challenging the universal service contribution factor for the first quarter of 2022, and remanded the decision to the FCC for further proceedings. To reach its result, the Court concluded the following:
The power to levy USF “contributions” is the power to tax—a quintessentially legislative power;
Congress through 47 U.S.C. § 254 may have delegated legislative power to FCC because it purported to confer upon FCC the power to tax without supplying an intelligible principle to guide FCC’s discretion;
The FCC may have impermissibly delegated the taxing power to private entities; and
The Court need not definitively answer either delegation question because even if § 254 contains an intelligible principle, and even if FCC was permitted to enlist private entities to determine how much universal service tax revenue it should raise, the combination of Congress’s broad delegation to FCC and FCC’s subdelegation to private entities certainly amounts to a constitutional violation.
The Fifth Circuit’s decision is at odds with prior decisions by two other federal circuit courts of appeals – the Sixth Circuit and the Eleventh Circuit – in which both courts found there are no unconstitutional delegations with respect to the universal service regime created by Congress. Specifically, in May 2023, the U.S. Court of Appeals for the Sixth Circuit denied Consumers’ Research’s petition challenging the constitutionality of the Universal Service Fund (USF), and in December 2023, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion denying an identical Consumers’ Research’s petition. The U.S. Supreme Court denied petitions for certiorari for both of those decisions in June 2024.
FCC Consent Decree Resolves Investigation Of Alleged TracFone Violations Of FCC Privacy Rules; TracFone Fined $16 Million
July 22, 2024 – The FCC’s Enforcement has entered into a Consent Decree with TracFone Wireless, Inc. which resolves an investigation into whether TracFone violated the FCC’s privacy rules. Specifically, the Consent Decree resolves whether TracFone:
(i) failed to meet its duty to protect the confidentiality of customer proprietary information (PI);
(ii) impermissibly used, disclosed, or permitted access to individually identifiable customer proprietary network information (CPNI) without customer approval;
(iii) failed to take reasonable measures to discover and protect against attempts to gain unauthorized access to CPNI; and
(iv) engaged in unjust and unreasonable information security practices in connection to three data breaches that occurred between 2021 and 2023.
As part of the settlement, TracFone will pay a civil penalty of $16,000,000. Also, TracFone must implement a compliance plan to improve its privacy and data security practices by: (i) designating a compliance officer with specific knowledge of the information security principles and practices required by the Consent Decree; (ii) implementing a comprehensive information security program that is reasonably designed to protect the security, confidentiality, integrity, and availability of customer information collected, processed, stored, or accessed by TracFone web applications, including application programming interfaces (APIs); (iii) implementing Subscriber Identity Module (SIM) change and port-out protections; (iv) performing annual assessments of the sufficiency and maturity of the TracFone’s information security program; and (vi) providing privacy and security awareness training to employees and certain third-parties.
FCC Adopts New Next Generation 911 Rules
July 19, 2024 – The Federal Communications Commission (FCC) has approved a Report and Order containing new rules to accelerate the nation’s transition to Next Generation 911 (NG911) networks. Under the new rules, originating service providers (OSPs) – wireline providers, Commercial Mobile Radio Service (CMRS) providers, covered text providers, providers of interconnected Voice over Internet Protocol (VoIP) services, and providers of Internet-based Telecommunications Relay Service (Internet-based TRS) – are required to take actions to start or continue the transition to NG911 networks and services. The transition to NG911 will be undertaken in two phases:
Phase 1: Upon receiving a valid Phase 1 request from a 911 Authority, an OSP must commence delivery of 911 traffic in IP-based Session Initiation Protocol (SIP) format to one or more in-state NG911 Delivery Points designated by the 911 Authority. Phase 1 will enable 911 Authorities to deploy Emergency Services IP Networks (ESInets) in a cost-effective manner by selecting convenient delivery points to receive 911 traffic; will improve 911 reliability by using an IP-based format, rather than legacy format, to deliver 911 traffic; and will establish the transmission platforms necessary for upgrading to Phase 2.
Phase 2: Upon receiving a valid Phase 2 request from a 911 Authority, an OSP must commence delivery of 911 traffic to the designated in-state NG911 Delivery Point(s) in an IP-based SIP format that complies with NG911 commonly accepted standards identified by the 911 Authority, including having location information embedded in the call signaling using Presence Information Data Format—Location Object (PIDF-LO) or the functional equivalent. In Phase 2, the OSP must install and put into operation all equipment, software applications, and other infrastructure, or acquire all services, necessary to use a Location Information Server (LIS) or its functional equivalent for the verification of its customer location information and records. Phase 2 will facilitate use of the functional elements of Next Generation 911 Core Services (NGCS), which can deliver dynamic information to Public Safety Answering Points (PSAPs), enabling them to use policy routing functions to dynamically reroute 911 traffic to avoid network disruptions, thus reducing the impact of outages on 911 continuity.
Among other things, the Report and Order adopts new rules covering the origination and delivery of 911 traffic, such as the following:
OSP Cost Responsibility For Taking 911 Traffic To NG911 Delivery Points – Starting at Phase 1, OSPs must transmit and deliver 911 traffic to NG911 Delivery Points designated by 911 Authorities and must bear the financial responsibility for such transmission, including costs associated with completing any needed TDM-to-IP translation and the costs of delivering associated routing and location information in the requested IP-based format.
Home State NG911 Delivery Points – OSPs must transmit and deliver 911 traffic to NG911 Delivery Points designated by a 911 Authority only if those points are located within the same state or territory as the PSAPs connected to the 911 Authority’s ESInet.
OSPs’ Use of Aggregation Services and Other Cost-Saving Measures – The default NG911 delivery rule does not prohibit OSPs from using aggregation services, and it allows OSPs to choose the methods of transport they will use to deliver 911 traffic to ESInets.
FCC Tentative Agenda For August 7, 2024 Open Meeting
July 17, 2024 – Federal Communications Commission Chairwoman Jessica Rosenworcel has announced the following tentative agenda for the FCC’s next open meeting scheduled for Wednesday, August 7, 2024:
Establishing a Missing and Endangered Persons Alert Code – The Commission will consider a Report and Order to establish a Missing and Endangered Persons event code that will provide law enforcement, EAS Participants, and WEA providers with a means to quickly disseminate information pertaining to missing and endangered persons cases. (PS Docket Nos. 15-91, 15-94)
Protecting Consumers from Unwanted Artificial Intelligence Robocalls – The Commission will consider a Notice of Proposed Rulemaking that would propose steps to protect consumers from the abuse of AI in robocalls and robotexts alongside actions that clear the path for positive uses of AI, including its use to improve access to the telephone network for people with disabilities. (CG Docket No. 23-362)
Strengthening a Key Tool for Combatting Robocalls – The Commission will consider a Notice of Proposed Rulemaking that would propose and seek comment on procedural measures to promote the highest level of diligence when providers submit required information to the Robocall Mitigation Database, technical validation solutions to identify data discrepancies in filings, and accountability measures to ensure and improve the overall quality of submissions in the Robocall Mitigation Database. (WC Docket No. 24-213; MD Docket No. 10-234)
Restricted Adjudicatory Matter – The Commission will consider a restricted adjudicatory matter from the Media Bureau.
Enforcement Bureau Action – The Commission will consider an enforcement action.
FCC Updates Interim Eligible Locations List For Enhanced A-CAM
July 17, 2024 – The FCC’s Wireline Competition Bureau has released an update to the Interim Eligible Locations list for use in the Enhanced Alternative Connect America Model (Enhanced A-CAM) mechanism. The updated list uses location data from the December 2023 Broadband Serviceable Location Fabric (Fabric Version 4) and availability data as of June 2023. It also corrects minor errors, such as incorrect study area boundaries, that were identified since the release of the first Interim Eligible Locations list on January 25, 2024. Additionally, the updated list includes information related to Enhanced A-CAM support amounts that was not previously included.
In the Public Notice, the Bureau notes that it must issue a final report on Enhanced A-CAM obligations and support amounts no later than December 31, 2025. There are a number of factors that must addressed before the list can be finalized. Supporting data is not currently available, and the problems cannot be fixed at this time. These outstanding problems include the following:
Federal enforceable commitments to deploy 100/20 Mbps or faster broadband that were made by August 30, 2023, but have not yet been entered into the Broadband Funding Map;
State enforceable commitments to deploy 100/20 Mbps or faster broadband that were made by August 30, 2023;
Successful challenges to the Fabric that would add or remove locations from the December 2023 version;
Successful challenges to the June 2023 availability data (or later availability data, as applicable to locations for which there is no June 2023 availability data) that were not resolved in time for inclusion in the May 2024 National Broadband Map; and
Tribal locations removed from Enhanced A-CAM by mutual agreement of the Tribal entity and the Enhanced A-CAM recipient.
Finally, with respect to the Enhanced A-CAM cost model, the Wireline Competition Bureau found that “there is a relatively small number of locations for which the model does not provide a cost estimate, and therefore a support amount, because the locations are in census blocks which did not have any locations in Version 2 (December 2022) of the Fabric (the version was used to model cost estimates).” Consequently, the Bureau estimated the cost of serving those locations by using the following methodology:
1) using the model-estimated cost of the nearest location in an incumbent study area of the Enhanced A-CAM carrier, if the nearest location is within one airline mile of the location without a cost estimate; 2) where there is no location with a cost estimate within one airline mile, using the highest estimated cost of any location within the census block group and the Enhanced A-CAM carrier’s incumbent service area; 3) if there is no location with a cost estimate within the census block group, using the highest cost location served within the census tract and the Enhanced A-CAM carrier’s service area; or 4) if there is no location within the census tract, using the highest cost location within the study area.
More Rate-Of-Return Carriers Move Business Data Services To Incentive Regulation
July 11, 2024 – The FCC’s Wireline Competition Bureau has announced that an additional 120 rate-of-return local exchange carriers in 33 states have elected to move their business data services (BDS) offerings to incentive regulation effective July 2, 2024. Rate-of-return carriers that chose to move to the Enhanced A-CAM program were given an opportunity to also move their BDS offerings to incentive regulation. These new Enhanced A-CAM carriers were required to notify the Wireline Bureau of their decision by May 1, 2024, with any affirmative election being effective July 2024. The Bureau’s Public Notice provides the following guidance on moving BDS to incentive regulation:
Carriers electing BDS incentive regulation this year were eligible to begin detariffing their high capacity (above DS3) business data services and low capacity (DS3 and below) end user channel termination in study areas deemed competitive beginning in tariff filings effective July 2, 2024 and must detariff these BDS offerings no later than July 1, 2027. Enhanced A-CAM recipients electing BDS incentive regulation are also required to detariff their low capacity (DS3 and below) end user channel termination services in competitive study areas within 36 months after those services are deemed competitive by the competitive market test pursuant to sections 61.50(j) and 69.803(c) of the Commission’s rules.
New RDOF Census Blocks Now Eligible For Other Funding Programs – Michigan, Missouri, Oregon, Texas, & Wisconsin
July 10, 2024 – The FCC’s Wireline Competition Bureau has announced that certain Rural Digital Opportunity Fund (RDOF) census block groups (CBG) are now eligible for other funding programs. Three companies – Charter Communications, Co-Mo Connect, and Coleman County Telephone Cooperative, Inc – were awarded funding for the CBGs, but all three have now notified the FCC that they have decided to default on their RDOF commitments there. The following Charter Communications companies have notified the FCC that they are defaulting on their RDOF commitments to offer voice and broadband service to certain additional CBGs within their RDOF supported service areas in Michigan, Missouri, Oregon, and Wisconsin:
Charter Fiberlink – Michigan, LLC (Charter Fiberlink Michigan) (Study Area Code (SAC) 319053);
Charter Fiberlink – Missouri, LLC (Charter Fiberlink Missouri) (SAC 429051);
Charter Fiberlink OR-CCVII, LLC (Charter Fiberlink OR) (SAC 539021); and
Charter Fiberlink CCO, LLC (Charter Fiberlink CCO) (SAC 339064)
Co-Mo Comm, Inc. d/b/a Co-Mo Connect (SAC 429038) has notified the FCC that it is defaulting on its commitment to offer voice and broadband service to certain CBGs within its RDOF-supported service area in Missouri. Coleman County Telephone Cooperative, Inc. (SAC 442057) has notified the FCC of its decision to withdraw from the RDOF support program and default on all the CBGs covered by its authorized winning bids in Texas.
By issuing the Public Notice, Wireline Competition Bureau officially notifies stakeholders that the defaulted census blocks in Michigan, Missouri, Oregon, Texas, and Wisconsin are eligible for broadband funding from other federal and state funding programs subject to the rules of the other programs.
FCC Issues Notice of Apparent Liability For Forfeiture (NAL) Against Cause Based Commerce
July 10, 2024 – The FCC’s Enforcement Bureau has issued a Notice of Apparent Liability for Forfeiture (NAL) against Cause Based Commerce, Inc. for its failure to cooperate with Telecommunications Reporting Worksheets documentation requirements in apparent violation of section 54.711(a) of the FCC’s rules. The NAL proposes Cause Based Commerce pay a penalty of $100,000. The Enforcement Bureau provides the following summary of Cause Based Commerce’s failure to comply with the FCC’s rules:
Between March 23, 2021, and September 26, 2023, USAC repeatedly tried to verify the accuracy of data reported in Cause Based Commerce’s Annual Worksheet filings for 2021 through 2023. As detailed below, however, the Company repeatedly failed to respond, responded late, or submitted non-responsive documents to USAC over the course of three years, thereby repeatedly preventing USAC from verifying the accuracy of the Annual Worksheet filings during that period. Cause Based Commerce did not provide USAC the documentation needed to complete the verification process for the Annual Worksheets for 2021 through 2022, and it did not produce sufficient documentation to verify the 2023 Annual Worksheet until September 26, 2023.
No Amnesty For RDOF & CAF II Defaults
July 3, 2024 – The FCC’s Wireline Competition Bureau has issued a Public Notice in which the Bureau declines to provide blanket amnesty for Rural Digital Opportunity Fund (RDOF) and Connect America Fund (CAF) Phase II defaults. Under the FCC’s rules, every RDOF and CAF Phase II support recipient must comply with service milestones by serving a defined number of locations across all of the eligible census blocks in each state where they were awarded support. When a service milestone is not met, the support recipient is subject to the non-compliance penalties, which can include, among other things, the withholding of support and the claw back of support provided to the recipient. In the Public Notice, the Bureau determined there is no need for broad relief from default penalties because “RDOF and CAF Phase II support recipients have shown significant progress toward meeting deployment obligations, with only 4% of CAF Phase II carriers reporting not timely meeting buildout milestones, and with 71% of RDOF carriers reporting locations served a full year prior to the first deployment milestones required by the program.” The Bureau followed this reasoning by summarizing numerous examples of how the FCC’s existing processes are sufficient to address early defaults under RDOF and CAF Phase II. Finally, the Bureau noted that in response to the request for comment on potentially granting amnesty for defaults, many parties “rejected the concept of allowing defaults with no support recovery as thwarting the reverse auction system, encouraging bad actors, and undermining certainty in future support programs.”
Consumers’ Research Files Another Legal Challenge To USF Contribution Factor
July 1, 2024 – Consumers’ Research, Cause Based Commerce, Inc., and 14 individuals have filed a Petition For Review in the U.S. Court Of Appeals For The Fifth Circuit challenging the Federal Communications Commission’s (FCC) approval of the proposed third quarter 2024 universal service fund (USF) contribution factor. The group is seeking review of the FCC’s approval and the 3Q 2024 USF contribution factor “on the grounds that they exceed the FCC’s statutory authority and violate the Constitution and other federal laws.” The group wants the Court to declare the USF contribution factor unlawful and vacate it. They make the following claims in their petition:
Congress’s standardless delegation to the FCC of legislative authority to raise and spend nearly unlimited money via the Universal Service Fund violates Article I, section 1 of the U.S. Constitution.
To the extent Congress permitted the FCC to re-delegate (or de facto re-delegate) to a private company the authority to raise and spend nearly unlimited money via the Universal Service Fund, Congress unconstitutionally delegated its legislative power to a private entity—the Universal Service Administrative Company (USAC)—in contravention of Article I, section 1 of the Constitution.
The revenues raised for the Universal Service Fund pursuant to 47 U.S.C. § 254 are taxes and therefore Congress’s standardless delegation to the FCC of authority to raise and spend nearly unlimited taxes violates Article I, section 8 of the U.S. Constitution.
To the extent Congress permitted the FCC to re-delegate (or de facto re-delegate) to USAC the authority to raise and spend nearly unlimited taxes for FCC-defined “universal service,” Congress unconstitutionally delegated its taxing power to a private entity in contravention of Article I, section 8 of the Constitution. And the FCC subsequently delegated its Article II executive power to a private entity, also in violation of the Appointments Clause.
To the extent Congress did not to permit the FCC to delegate to a private company the authority to raise and spend nearly unlimited money for FCC-defined “universal service,” the FCC’s subsequent re-delegation to USAC is beyond the FCC’s lawful statutory authority, regardless of whether the charges are deemed to be “taxes.”
If USAC is determined not to be a private entity, and to the extent Congress permitted the FCC Chair to appoint USAC board directors, Congress and the FCC violated the Constitution’s Appointments Clause.
To the extent Congress did not statutorily permit the FCC Chair to appoint USAC board directors, the FCC has acted in excess of its statutory authority in doing so.
The USF Tax Factor is a binding legislative rule, but the FCC did not comply with the APA’s requirements for rulemaking, nor with the Federal Register Act’s requirements for publication.
The FCC’s action and inaction are otherwise contrary to law. Petitioners reserve the right to modify, add, or abandon grounds.
FCC Proposes Extending Freeze On Jurisdictional Separations For Another Six Years
July 1, 2024 – The Federal Communications Commission (FCC) has released a Notice of Proposed Rulemaking (NPRM) which proposes a six-year extension to the existing freeze on jurisdictional separations category relationships and cost allocation factors for rate-of-return incumbent local exchange carriers (ILECs). If the extension is ultimately adopted, instead of ending on December 31, 2024, the freeze will continue until the end of 20230. This freeze began in May 2001 when the FCC, acting on a Federal-State Joint Board on Jurisdictional Separations recommended decision, issued a separations order that placed an interim freeze, for a period of five years, on part 36 category relationships and jurisdictional allocation factors for rate-of-return ILECs. According to the FCC, extending the freeze yet again will enable the FCC to continue to work Joint Board “to determine next steps in amending the separations rules in light of sweeping technological and regulatory changes since these rules were initially adopted.” Comments on the NPRM are due on or before 30 days after the NPRM is published in the Federal Register. Reply comments are due 45 days after Federal Register publication.
