Telecom Law Monitor

Commissioners Rosenworcel and Pai Take Office

Steve Augustino — Tue, 15 May 2012 07:53:04 -0500

One week after Senate confirmation, new FCC Commissioners Jessica Rosenworcel and Ajit Pai were sworn in to office. With these appointments, the FCC reaches its full complement of commissioners for the first time in nearly a year. Both Commissioners released short statements expressing excitement to begin their tenures on the FCC. The statements are available here and here.

They will get their first opportunity to comment publicly as commissioners tomorrow, when the Senate Commerce Committee will hold an oversight hearing. Their first full Commission meeting will be May 24th.

VoIP Outage Reporting Obligations One Step Closer to Implementation

Steve Augustino — Mon, 30 Apr 2012 07:20:52 -0500

This post was co-written by Randy Sifers.

In February, the FCC adopted new outage reporting rules for interconnected VoIP providers. Our story and our advisory on the new rules are available at this link. At the time, we told you that the rules would become effective 90 days after OMB approved the new information collection.

On Friday, the new outage reporting rules took one step closer to becoming effective. No, OMB has not yet approved the rules. However, the FCC published notice in the Federal Register of its Report and Order extending the network outage reporting requirements to interconnected VoIP service providers. Friday’s publication was made to comply with OMB information collection requirements. The FCC will make a future publication announcing the effective date of the new rule when OMB approval is obtained.

This notice does have the effect of starting the clock for appeals or petitions for reconsideration of the new outage reporting rules. Interested parties may file for reconsideration within 30 days of the notice; petitioners may appeal the decision within 60 days.

FCC Settles Slamming Case with Unusual Remedies

Steve Augustino — Fri, 06 Apr 2012 08:53:08 -0500

Slamming cases are a rarity these days, but this settlement is noteworthy not because it involves slamming, but because of the unusual remedies the FCC required in its consent decree.

The case involves two Notices of Apparent Liability issued to companies now under common ownership, Horizon Telecom, Inc. and Reduced Rate Long Distance, LLC. In Horizon, the Commission proposed a fine of $5,084,000 for slamming. In Reduced Rate, the Commission proposed a fine of $8,000 for failing to respond to two informal consumer complaints. Both NALs were issued in 2008. Yesterday, the Enforcement Bureau released a consent decree settling the two cases.

What is so unusual about the settlement?

For starters, the settlement amount is only $53,000. This is a significant reduction from the over $5 million in fines proposed against the two companies. (Though not quite this significant.) The Order notes that the payment "is reduced from the proposed NAL amounts based upon their demonstrated inability to pay."
Second, Horizon, which had sold its customer base to Reduced Rate in 2007, agreed never to provide telecommunications services again. Not since the Fletcher Companies in 1997 have I seen a telecommunications carrier barred from the market.
Third, Reduced Rate's compliance plan requires outside counsel review of its materials. The consent decree states that Reduced Rate "shall submit [its Policy Manual, sales scripts, TPV scripts and other marketing materials] to legal counsel of its own designation for review and editing ..." The order further requires that such counsel "shall have experience with federal telecommunications and consumer protection laws, including the law relating to fraudulent, deceptive, unconscionable, and unfair acts or practices." To our knowledge, this is the first time the FCC has ever required a regulated entity to obtain counsel.
Finally, although not unprecedented, the consent decree requires Horizon and Reduced Rate to self-report non-compliance with the consent decree within 30 days. Such self-reporting obligations have appeared in a few consent decrees in the past year or so (though not in the Verizon and Verizon Wireless consent decrees last month). It's not quite a trend, but it is something worth monitoring in the future. (That's what we're here for).

Verizon and Verizon Wireless Pay $200,000 to Settle Outage Reporting Investigations

Steve Augustino — Fri, 16 Mar 2012 09:00:11 -0500

Randy Sifers contributed to this blog post.

On March 14, 2012, the FCC released two consent decrees settling investigations into Verizon’s and Verizon Wireless’s outage reporting practices. Collectively, the two affiliates will pay $200,000 to resolve a Notice of Apparent Liability for filing inaccurate outage reports and possibly other violations. The release of these two settlements confirms that the Enforcement Bureau views the filing of inaccurate or incomplete network outage reports, not just the failure to file outage reports, as significant violations of the Communications Act.

The cases involve Verizon and Verizon Wireless. In July 2009, Verizon experienced a reportable network outage and submitted a timely report concerning that outage. In July 2010, the FCC issued a Notice of Apparent Liability against Verizon for failing to file a true, complete and accurate outage report regarding a significant disruption in service. The Bureau proposed a monetary forfeiture of $25,000. Subsequently, in March 2011, the Bureau issued a letter of inquiry to Verizon, expanding its investigation into Verizon’s compliance with reporting requirements. In the Consent Decree released on Wednesday, Verizon agreed to pay $90,000 to resolve the investigation.

In the other investigation, the Bureau first issued a letter of inquiry in June 2008, directing Verizon Wireless to submit a sworn written response to a series of questions relating to Verizon Wireless’s compliance with the Commission’s network outage reporting rules. Verizon Wireless submitted a timely response and, in response, the Bureau subsequently issued five follow-up letters of inquiry over the September 2008 through October 2009 time period. Because no notice of inquiry was issued, it is not clear whether the Verizon Wireless investigation involved failure to report or the filing of inaccurate or incomplete reports, or both types of infractions. But in the Consent Decree released on Wednesday, Verizon Wireless agreed to pay $110,000 to resolve the investigation.

Both consent decrees contain provisions requiring Verizon and Verizon Wireless to develop a compliance plan, designate a compliance officer, to perform training of its personnel, to file compliance reports, and to report future violations to the FCC. In addition, the Verizon decree requires it to modify its existing processes for gathering, analyzing, and reporting information about its network outages particularly as they relate to public safety answering points. The Verizon decree does not indicate how many outages were involved, but nothing suggests that it was more than one.

Because the FCC received substantially more than the amount it originally proposed in the Verizon NAL, it appears that the Bureau found additional potential violations in its subsequent investigation. In a case settled in August 2011, Alpheus Communications agreed to pay $55,000 for failing to timely file outage reports.

FCC Releases 2012 Universal Service Revenue Reporting Worksheet

Steve Augustino — Tue, 06 Mar 2012 08:48:16 -0500

As it does every year, the FCC released its update to the annual Form 499-A. The Form 499-A is used to report revenues for purposes of the federal Universal Service Fund and also for calculating associated revenue-based contribution obligations such as TRS, NANP, LNP and FCC Regulatory Fees. The Public Notice describes changes to the form, primarily to implement the new requirement that non-interconnected VoIP providers contribute to the TRS fund. (Non-interconnected VoIP providers were required to register with USAC for this purpose by December 31, 2011.)

The 2012 Form 499-A has been posted on USAC's website. Go to "universal service links" in our Resource Center on the right-hand side of this page for the USAC Forms page.

REMINDER: Kelley Drye will discuss these changes, important developments in USF audits and other topics at our 3rd Annual USF Update Webinar next week. This is our most popular webinar of the year. Please register today.

FCC Extends Outage Reporting Requirements To All Interconnected VoIP Providers

Steve Augustino — Thu, 01 Mar 2012 15:33:58 -0500

On February 21, 2012, the Federal Communications Commission issued a Report and Order ("Order") adopting outage reporting requirements for both facilities-based and non-facilities-based interconnected Voice over Internet Protocol ("VoIP") service providers on a mandatory basis in order to further ensure reliable 9-1-1 service. Outage notification and reporting requirements currently apply to a variety of voice providers, including wireline carriers, CMRS providers, cable companies, and satellite providers. The Commission's final action was narrower than had been first suggested in 2011, when the FCC also proposed to extend outage reporting requirements to providers of broadband Internet services. In short, interconnected VoIP providers will be subject to notification and reporting requirements only in the event of complete loss of service. Their reporting obligations do not extend to situations where service is technically available but technical conditions effectively prevent communication. Rather, the FCC deferred action on performance degradation thresholds for measuring an outage of interconnected VoIP service and all action relative to outages of broadband Internet services. Finally, the Commission clarified that Part 4 of its rules relating to outage reporting applies to voice services provided using new wireless spectrum bands.

Click here to read the full Kelley Drye Client Advisory.

Please Join Us for Kelley Drye's 3rd Annual USF Update Webinar

Steve Augustino & John Heitmann — Tue, 28 Feb 2012 17:37:08 -0500

With the Universal Service Fund continuing to grow and the USF contribution factor skyrocketing to nearly 18%, the federal Universal Service Fund remains a critical area for all telecommunications providers. Customers increasingly are focusing on the USF surcharge in negotiations, and the competitive consequences of over- or under- reporting USF directly affect the company’s bottom line.

In this annual webinar, Kelley Drye will walk you through the USF changes you need to know, with an eye toward what to expect in 2012. We also will discuss the audit and appeal process in detail, including the differences between USAC and Inspector General audits. Our speakers will offer analysis and practical advice based on front line experience in audits and appeals, and years of providing compliance and enforcement advice in this area.

The following topics will be addressed:

The 2012 USF Reform Agenda -- High Cost (CAF) and Low-Income (Lifeline)
Changes to the 2012 Form 499A and instructions
Significant USF Appeals in 2011
Developments in the USF Audit and FCC Appeal Process

Kelley Drye Speakers:

Steve Augustino, Partner
John Heitmann, Partner

When:
March 13, 2012, 12:00PM - 1:00 PM

Where:
Webinar

RSVP:
This webinar is free of charge. Presentation slides and a recording of the webinar will be available to registrants. Email dcevents@kelleydrye.com or contact Cassidy Russell at 202.342.8400.

Reminder: Annual CPNI Certification Due March 1

Steve Augustino — Sun, 26 Feb 2012 14:16:40 -0500

All telecommunications carriers and interconnected VoIP providers must file an annual report certifying their compliance with the Federal Communications Commission’s (FCC) rules regarding Customer Proprietary Network Information (CPNI). The report covers calendar year 2011 and must be filed with the FCC by March 1, 2012. Providers may file CPNI certifications via an FCC web application or via ECFS, mail or hand delivery.

The FCC’s Enforcement Bureau actively enforces the filing requirement, and proposes fines for failure to file the certification at approximately this time every year. Any company that submits USF revenue reports should ensure that it is in compliance with the CPNI certification requirement.

Insights from Kelley Drye's 4th Annual Privacy Seminar

John J. Heitmann — Thu, 23 Feb 2012 10:01:08 -0500

On February 16, 2012, Kelley Drye & Warren LLP hosted the seminar and audiocast, “Privacy in 2012: What to Watch Regarding COPPA, Mobile Apps, and Evolving Law Enforcement and Public Policy Trends.” The seminar highlighted regulatory and legislative developments in privacy and information security during the past year, with an emphasis on children's online privacy and mobile applications.

Peter Swire, a professor at The Ohio State University Michael E. Moritz College of Law and a Senior Fellow with the Center for American Progress, opened the seminar with a keynote address that gave historical context to the most recent regulatory efforts addressing consumer privacy. Professor Swire’s remarks were followed by two panel sessions that included six experts representing key industry representatives and the federal agencies integral to recent privacy initiatives. The first panel discussed children's online privacy and the Federal Trade Commission’s proposed revisions to the Children's Online Privacy Protection Rule. The second panel discussed various consumer privacy enforcement and regulatory initiatives relating to mobile apps.

For more on the seminar, including a synopsis of key takeaways, see the Kelley Drye client advisory. An audio recording of the full program is also available.

Interconnected VoIP Providers Required to Report Outages

Steve Augustino — Wed, 15 Feb 2012 14:42:03 -0500

As we've discussed, today the FCC adopted rules to require interconnected VoIP providers to report network outages to the FCC. The text of the FCC's order has not been released, but the order adopts a much narrower outage reporting requirement than originally proposed. Under the new rules, interconnected VoIP providers will be required to report "hard" outages -- inabilities to complete calls -- that meet thresholds also applicable to traditional telecom services. This decision continues the trend to treat interconnected VoIP the same as traditional TDM voice services, at least with respect to its obligations.

According to the Public Notice, the Report and Order "means that interconnected VoIP service providers will be obligated to report significant service outages to the FCC." The Public Notice also promises that the Report and Order "defines outage reporting for interconnected VoIP service, establishes reporting criteria and thresholds, and discusses how the reporting process should work, what information should be reported, and confidential treatment of the outage reports." Details on these obligations will not be available until the text of the order is released.

Importantly, the FCC also significantly narrowed the scope of the rules that it initially proposed. The FCC deferred action on a number of questions, including the possibility of setting thresholds for reporting outages of broadband Internet service, and measurements for outages of both interconnected VoIP and broadband Internet services based on performance degradation, as opposed to complete service outage.

Significant Enforcement Penalties May Apply. Meanwhile, interconnected VoIP providers should take note of these rules. In the past, the FCC has set significant fines for failing to file the required outage reports. It has proposed a base forfeiture of $40,000 for failing to file the Electronic Notification, $20,000 for failing to file the subsequent Outage Reports and $25,000 for filing incomplete or inaccurate reports. Presumably, the same fines will apply, but only after the VoIP provider first receives a citation.

FCC Releases Comprehensive Low-Income Program Reform

John Heitmann — Tue, 14 Feb 2012 17:32:24 -0500

The Federal Communications Commission ("FCC" or "Commission") released an Order on February 6, 2012 to comprehensively reform the low-income program of the Universal Service Fund to eliminate Link Up in non-Tribal areas; impose uniform eligibility, certification and verification requirements in part through the use of duplicates and eligibility databases; begin the process of modernizing the program to shift to supporting broadband and constrain the growth of the $2.1 billion low-income fund by $200 million in 2012 and by an estimated $2 billion over the next three years. Many of the new rules will be effective 30 days after publication of the Order in the Federal Register, however, there will be important deadlines for eligible telecommunications carriers ("ETCs") throughout the year. At the same time, the FCC released a Further Notice of Proposed Rulemaking ("FNPRM") seeking comment on a number of issues presented by its reform of the program. Comments and reply comments on the issues raised in the FNPRM are due 30 days and 60 days, respectively, after publication of the FNPRM in the Federal Register.

Click here to read the Kelley Drye Client Advisory outlining the entire Order.

Tidbits from the FCC's Proposed Budget

Steve Augustino — Tue, 14 Feb 2012 08:54:20 -0500

Yesterday, the FCC released its proposed budget for fiscal year 2013 (beginning in October 2012). The budget offers a few interesting insights into the balance of the FCC's functions. It also offers a preview of what to expect with the FCC's regulatory fees, which are due in September of each year. See below for more.

FCC Proposed Budget. The FCC released its proposed FY 2013 budget yesterday. It also released a press release highlighting that the budget will, among other things, promote its efforts to "accelerate broadband deployment" and to implement reforms to the Universal Service Fund programs.

A few highlights relevant to the areas we cover in this blog:

Enforcement is the FCC's largest bureau. The budget proposes an Enforcement Bureau of 299 FTEs, 15% of the total FTEs in the Commission. Enforcement is largest bureau, larger than Wireless Telecom (232 FTEs) and Media (213 FTEs). The Wireline Competition Bureau is proposed to have only 170 FTEs, which is smaller than the Consumer & Governmental Affairs Bureau (195 FTEs).

Twice as many employees work on "competition and innovation" in wireless than in the Wireline Competition Bureau. The budget distributes the number of FTEs by goal identified by the FCC. According to the distribution, in FY 2012 (the current year), Wireless Telecom has 143 FTEs working on "competition and innovation," while the Wireline Competition Bureau has roughly half that amount, 77 FTEs. For FY 2013, the budget restates the goals somewhat, but Wireless Telecom will have 100 FTEs furthering the goal to "promote competition," while the Wireline Competition Bureau will have only 54. Enforcement (53), OET (53) and International (52) have nearly as many FTEs identified as promoting competition as does the Wireline Competition Bureau.

Wireless also will have more FTEs who "advance key national purposes" than Wireline Competition (34 vs 20).

Enforcement has nearly as many employees working on "public safety" as does the Public Safety and Homeland Security Bureau. The budget identifies 61 Enforcement FTEs as furthering the goal of "public safety and homeland security." The Public Safety Bureau, by contrast, has 83.

FCC Regulatory Fees should rise 3% over the next two years. FY 2011 Regulatory Fees (which were paid in September 2011) collected $335 million. The FY 2102 budget calls for the FCC to collect $339 million in Regulatory Fees. The FY 2013 budget proposes a request of $346 million in Regulatory Fees. Next year's fee total is 1% higher; while the fee total proposed in the budget (which would be collected in two years) is 3% higher. There always is a slight shift in the FTE allocations each year, so the actual amount of the increase for each category may vary slightly.

Broadcasters and other entities with spectrum not obtained via auction should be cautious. The FCC is also backing legislation that will allow the Commission to collect user fees on unauctioned spectrum licenses. This legislation, if enacted, would phase the user fees in over time, but would collect $4.8 billion through 2022, per the FCC.

VoIP Outage Reporting Obligations to be Adopted at February 15 FCC Meeting

Steve Augustino — Wed, 08 Feb 2012 15:52:08 -0500

VoIP providers, prepare to report outages to the FCC. Since early in 2010, the FCC has been on a path to impose new outage reporting obligations on providers of interconnected VoIP services, despite industry opposition to the new requirements. Today, the FCC released its "Sunshine Notice" confirming that it will vote on an order to adopt reporting requirements at its February 15th open meeting. Here is how it described the VoIP item:

The Commission will consider a Report and Order to extend outage reporting under
Part IV of the rules to interconnected Voice over Internet Protocol (VoIP) service providers. Extended reporting will enable the Commission to fulfill statutory E9-1-1 obligations and help protect the growing number of Americans who rely on VOIP phone service.

The FCC notice is available at this link. On the 15th, interested persons may view the FCC meeting at this link.

FCC Clarifies USF Reform/Intercarrier Compensation Order

Steve Augustino — Wed, 08 Feb 2012 12:28:14 -0500

This post was drafted by Chip Yorkgitis and Josh Guyan.

On Friday, February 3, 2012, the FCC's Wireline Competition Bureau and Wireless Telecommunications Bureau jointly released an order revising and clarifying certain aspects of the sweeping universal service and intercarrier compensation reform order adopted last November. The clarifications address the rates applicable to VoIP-PSTN traffic, access stimulation and the CETC phase-down of high-cost support, among other things.

The clarification order will be effective thirty days after it is published in the Federal Register, which is likely to occur quickly. However, as a practical matter, the clarifications are effective immediately in light of the rules being clarified already having taken effect.

For more information, see Kelley Drye's Advisory on the clarification order.

FCC Issues Clarification, Warning about Call Blocking Practices

Steve Augustino — Tue, 07 Feb 2012 08:40:41 -0500

Responding to complaints by rural LECs that call blocking has increased, the FCC yesterday issued a clarification and a stern warning to carriers not to block, choke or restrict calls to other carriers’ customers. While call completion issues can occur for a variety of reasons, allegations of “blocking” have arisen in a number of access charge disputes and other forms of telecommunications litigation that we track.

The FCC’s declaratory ruling serves as a warning that carriers involved in such disputes should not intentionally block or restrict the ability of callers to reach their intended destinations. It also appears to create affirmative obligations to correct call completion problems that are occurring.

Yesterday’s Declaratory Ruling came in response to filings made in June 2011 by several rural local exchange carriers. It reiterates and builds upon a similar Declaratory Ruling issued in 2007 that call blocking is unlawful.

As explained by the FCC, the latest order addresses issues raised by rural carriers:

Call completion problems appear to be occurring particularly in rural areas served by rate of return carriers where the costs that long distance providers incur to complete calls are generally higher than in non-rural areas. To minimize call termination charges, long distance providers often use third-party “least cost routers,” which attempt to connect calls to their destination at the lowest cost possible, usually within defined service parameters. Rural associations state that the call completion problems appear to arise from how originating carriers choose to set up the signaling and routing of their calls, and that many of these call routing and termination problems could lie with underlying routing providers selected by carriers who offer retail long distance services.

In the Declaratory Ruling, the FCC broadly asserted that, “carriers are prohibited from blocking, choking, reducing or restricting traffic in any way, including to avoid termination charges.” This prohibition, said the FCC, extends to VoIP-PSTN traffic as well as traditional TDM traffic.

Unjust and Unreasonable Blocking Practices. The noteworthy portion of the Declaratory Ruling is the Commission’s list of practices that it considers unjust and unreasonable. The order continues a recent trend by the Commission to rely broadly on Section 201(b) to declare specific practices unlawful. For example:

It is unjust and unreasonable for a carrier that knows (or should know) that it is providing degraded service to certain areas to fail to correct the problem or to fail to ensure that intermediate carriers “are performing adequately.”
It may be unjust and unreasonable to provide a false or misleading intercept message when a call fails to complete, such as stating that a number is out of service when in fact the number is in service and is reachable.

In addition, the Commission warned that the provision of lower quality service to rural or high cost areas could constitute an unreasonable discrimination under Section 202 of the Act.

Enforcement Actions. The Commission warned that it may “take appropriate enforcement action” against carriers that violate these prohibitions. Although not setting a base forfeiture for call blocking, the FCC noted that the statute authorizes a penalty of up to $150,000 per violation or $1.5 million for a continuing violation of the Act.

FCC Takes No Action Against Verizon 911 Outage; Maryland Still Investigating

Steve Augustino — Fri, 03 Feb 2012 08:50:33 -0500

Last year, we posted a couple of items about outages in Verizon's 911 call completion systems, and investigations by the FCC and the Maryland PSC. We thought now would be a good time for an update on those investigations.

FCC: As we noted previously, the FCC investigation was started by the Public Safety Bureau, not the FCC's Enforcement Bureau, which suggested to us that the Commission was not looking to impose fines for the outages. We are left to guess what happened, however, because the FCC has not released any information about the investigation since the February 2011 Inquiry Letter.

One thing we do know, however, is that the FCC cannot now impose a fine for the outage that sparked the investigation. Section 503 of the Communications Act limits the FCC to taking enforcement action against common carriers only for violations that occurred within one year of the date of the Notice of Apparent Liability. The outages in question occurred on January 26, 2011, which would mean that the FCC had to issue a NAL by January 26, 2012 if if sought to impose a fine. Because it has not done so, the FCC is barred from proposing a fine for that outage.

Maryland PSC: The Maryland PSC held a hearing in March 2011 and then ordered Verizon to show cause why a civil penalty should not be imposed. Subsequently, the Maryland PSC expanded its investigation to include another outage affecting wireless and VoIP 911 calls that occurred on May 30, 2011. After a hearing into that outage, Verizon maintains that no fines may be imposed. The Maryland PSC staff is recommending a civil penalty be assessed. The Maryland case has been under advisement since October 2011.

Prepaid Card Provider Settles Failure to Disclose Action for $2.3 Million

Steve Augustino — Thu, 02 Feb 2012 09:10:19 -0500

In 2011, the FCC was extremely active in the prepaid calling card area, proposing $25 million in fines and investigating several other prepaid card providers. While the FCC has exclusive jurisdiction over prepaid cards when provided by common carriers, the Federal Trade Commission also has jurisdiction over non-carrier marketers of prepaid calling cards. This case is a reminder of the shared jurisdiction between the agencies.

The FTC case was initiated in May of 2011 against Millennium Telecard, Inc. and related entities. The FTC complaint alleged that Millennium made inaccurate claims about the number of minutes calling cards provided to a wide range of international locations, including Argentina, Brazil, the Dominican Republic, Ecuador, Mexico, Pakistan, Poland, Vietnam, Ghana, Nigeria, and El Salvador. But the FTC alleged that consumers didn't receive the number of minutes advertised. Much of the FTC's case was based on test calls made by the agency, which, it claimed, showed that consumers received only 45% of the advertised minutes.

The FTC asserted that Millennium violated the FTC act by failing to provide the advertised minutes and (in a claim similar to that made by the FCC in its section 201(b) cases) that Millennium failed to adequately disclose the fees applicable to the cards. The FTC complaint did not explain in detail the failure to disclose claim, but its discussion of Millennium posters and cards suggested that the statements of fees were in fonts that were too small and were not prominently placed.

In the settlement agreement, Millennium agrees to two injunctive provisions that require it to clearly and conspicuously disclose all material fees. It also agrees to pay a fine of $2.32 million to resolve the case. However, Millennium pays only a $500,000 installment now, and is obligated to pay the remaining $1.82 million over ten years, in ten annual installments (plus interest). The ten year installment is quite unusual, as is the defendants' grant of a lien on property as collateral for the installment payment.

This case serves as a reminder that prepaid calling card providers and marketers should closely review their marketing practices to ensure that all material terms are clearly and conspicuously disclosed in their marketing materials.

FCC Affirms 2008 Audio Bridging Classification Order

Steve Augustino — Wed, 01 Feb 2012 09:02:19 -0500

Back in November, we told you that the FCC was considering an order on reconsideration in the 2008 audio bridging classification appeal brought by InterCall, Inc. It took over two months, but the FCC last week issued an order denying in full the petitions for reconsideration of the Classification Order.

The petitions were brought by two free conferencing providers, who argued that the FCC had misinterpreted the nature of audio bridging service (or at least their audio bridging services). In the reconsideration order, the FCC denies the petitions. While we had hoped that the reconsideration order would provide additional explanation of the rationale for classifying audio bridging as telecommunications, except for a discussion of bundled services, the order does not provide further guidance on the classification of bridging services. As a result, audio conferencing providers will be left with the existing uncertainty for the foreseeable future when making classification decisions.

The FCC Reconsideration Order denies in full the recon petitions submitted by two "free" conferencing providers, Global Conferencing Partners (GCP) and A+ Conferencing. The order affirms the conclusions in the 2008 Classification Order that audio bridging is "telecommunications" and that audio bridging providers must contribute to the USF. With respect to the role of the conference bridge, the FCC does not classify the bridge as a switch or an intermediate point of routing. Instead, it concludes that the bridge facilitates routing, not that it performs the routing itself.

The Commission provides the most guidance in its discussion of additional features of the conference bridge. In the Classification Order, the Commission had found that features such as recording and playback are separate from the audio bridging functionality. In the Reconsideration Order, the FCC reiterated that the question is whether such functions are sufficiently integrated with the telecommunications so as to form a single service. If so, then the entire service can be treated as an information service; if not, then the provider must treat the offering as a bundle of services and perform an allocation of the revenues between the two services.

The Commission briefly referred to two services offered by petitioner GCP -- a "whiteboarding" feature and "other computing capabilities" made available to conference participants -- both of which, the FCC concluded, are offered "simultaneously" with the audio bridging. This was, in the FCC's view, not sufficiently integrated to constitute a single service. Conferencing providers should review any similar services they offer carefully in light of this additional guidance.

Join us Feb. 16 for "Privacy in 2012" Seminar and Teleconference

John Heitmann — Wed, 25 Jan 2012 13:20:25 -0500

Changes to privacy regulations, such as proposed revisions to the Children's Online Privacy Protection Act (COPPA), and continuously evolving technologies, including mobile apps with location-based services, can make it difficult for businesses to ensure their privacy practices are up to par.

On February 16, Kelley Drye will gather government leaders from the FTC and FCC, and thought leaders in the industry, for a discussion about new regulations, enforcement trends, and best practices to avoid consumer privacy risks. Please join us for "Privacy in 2012: What to Watch Regarding COPPA, Mobile Apps, and Evolving Law Enforcement and Public Policy Trends."

Email dcevents@kelleydrye.com to register for the live seminar or teleconference.

KEYNOTE SPEAKER

Peter Swire, Professor of Law, Ohio State University; former Clinton Administration Chief Counselor for Privacy, U.S. Office of Management and Budget

PANEL 1: COPING WITH COPPA: CHILDREN'S PRIVACY AND PROPOSED REVISIONS TO THE COPPA RULE

Ellen Blackler, Vice President - Global Public Policy, The Walt Disney Company

Mamie Kresses, Senior Attorney, Division of Advertising Practices, Federal Trade Commission

Saira Nayak, Director of Policy, TRUSTe

Moderated by partners Dana Rosenfeld and Alysa Hutnik of Kelley Drye & Warren LLP

PANEL 2: MOBILE APPS: A PRIVACY AND CONSUMER PROTECTION HOT SPOT

Michael Altschul, Senior Vice President and General Counsel, CTIA

Jessica Rich, Associate Director, Division of Financial Practices, Federal Trade Commission

Jennifer Tatel, Associate General Counsel, Federal Communications Commission (invited)

Moderated by partners John Heitmann and Gonzalo Mon of Kelley Drye & Warren LLP

When:
February 16, 2012, 2:30 PM - 5:30 PM EST

Location:
Kelley Drye & Warren LLP
3050 K Street, NW, Suite 400
Washington, DC 20007-5108

And via audio webcast

RSVP:
Email dcevents@kelleydrye.com or contact Cassidy Russell at 202.342.8400.

This seminar is free of charge, but space is limited. Reserve your place today.

CLE and CPE credit may be available in certain jurisdictions.

FCC Issues Enforcement Advisory on VoIP, Broadband Reporting Requirements

Steve Augustino — Fri, 13 Jan 2012 17:15:41 -0500

Here's another VoIP item from our backlog. On December 16, the FCC's Enforcement Bureau issued an "Enforcement Advisory" reminding providers of their obligation to submit an FCC Form 477 every six months. The Form 477 collects information about broadband deployment on a Census Tract level. All facilities-based broadband providers and all interconnected VoIP providers are required to submit the form.

The Advisory lists several "problems" the Enforcement Bureau has noticed with the filings, including:

failing to file the form in a timely fashion, if at all;
failing to properly certify the form (and provide contact information); and
filing incomplete or inaccurate data (including failing to update data from previous submissions

The FCC has not issued any forfeitures for failure to submit a Form 477, nor, to our knowledge, are any investigations into Form 477 compliance pending. Nevertheless, as a reminder, below is a summary of the Form 477 filing obligations for broadband providers and VoIP service providers.

Form 477: Local Competition and Broadband Report

The Local Competition and Broadband Report, containing data as of December 31, must be filed by March 1 of the following year. In addition, data as of June 30 of each year must be filed by September 1. The report requires the submission of information regarding broadband connections in individual states.

Who Must File:
(1) ILECs or CLECs that provide local exchange service to one or more end user customers;
(2) facilities-based providers of mobile telephony services that serve one or more mobile telephony subscribers;
(3) entities (including all commonly-owned or commonly-controlled affiliates) that are facilities-based providers of broadband (i.e., faster than 200 kbps, in at least one direction) connections (including both wired lines and wireless channels) to one or more end users in a state; and
(4) providers of interconnected VoIP services that provide interconnected VoIP service to one or more subscribers in a state.

Reporting Basis:
In addition to specific reporting requirements contained in the Form 477 Instructions, for all broadband technologies other than terrestrial mobile wireless, filers must report broadband subscribership information by Census Tract.

Filing Process:
The Form 477 Report must be submitted via an FCC web-based interface and filers will need to use their Federal Registration Number (FRN) and associated password to access the system.