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Earlier this month, the FCC’s Wireless Telecommunications Bureau implemented a temporary freeze on applications for new and modified authority for Land Mobile systems operating in the 896-901/935-940 MHz band.  The freeze was effective as of September 13, 2018.

The freeze stems from a Notice of Inquiry (NOI) issued by the FCC in 2017, seeking input on possibly reconfiguring this band to accommodate a Petition for Rulemaking filed by Pacific Data Vision (PDV) in December 2014.  The FCC delayed PDV’s vision for the band in 2017 when it issued an NOI – which generally seeks information from the public – as opposed to a Notice of Proposed Rulemaking (NPRM) – which is a vehicle through which the FCC could have changed its rules to accommodate PDV’s request.

By issuing the licensing freeze last week, however, it appears the Commission is likely considering the issuance of an NPRM to modify the rules governing this 900 MHz land mobile band.  The stated purpose of the freeze is to allow the Wireless Bureau to examine the band and determine what changes, if any, can be made.

One other important clarifying point: the portion of the 900 MHz band that currently is frozen by the FCC differs from the portion of the 900 MHz band that is used by critical infrastructure entities for Multiple Address Systems (MAS).

For more information, please contact Wes Wright (wright@khlaw.com; 202.434.4239).

Late last month, Marriott International, Inc. entered into a Consent Decree with the FCC to resolve a violation of Section 310(d) of the Communications Act.

Background.  In September 2016, Marriott acquired StarwoodHotels and Resorts Worldwide Inc. The parties closed the transaction without obtaining the Commission’s prior consent to transfer control of 65 wireless FCC licenses held by Starwood to Marriott. Section 310(d) of the Communications Act and Section 1.948 of the Commission’s Rules required the parties to secure prior consent from the FCC before closing the transaction.

Voluntary Disclosure. In February 2017, Marriott admitted to the FCC that it closed its acquisition of Starwood without obtaining the agency’s prior consent to transfer control of the various FCC radio licenses.

FCC Investigation. The Commission’s rules set forth baseline penalties for various rule violations. The baseline penalty for an unauthorized transfer of control is $8,000.  In this instance, however, the various FCC licenses were held by multiple independent companies. The FCC’s rules required each entity to file separate transfer of control applications for independent approval by the FCC.  No applications were filed, and the FCC took an aggressive stance. Instead of viewing this as a single violation (stemming from one large transaction), the FCC treated each application that was not filed as a separate rule violation. The FCC found multiple rule violations and, as a result, significantly increased Marriott’s financial penalty.

Resolution. Marriott agreed to pay $504,000 and implement a compliance plan to promote ongoing compliance with the FCC’s rules.

On the heels of this eye-popping settlement, it is helpful to understand a little more about the FCC’s Enforcement Procedures.

FCC Enforcement Procedures

Investigations typically are initiated by the FCC’s Enforcement Bureau after it receives a complaint, through an inspection, by a referral, or resulting from a voluntary disclosure. In this instance, Marriott voluntarily disclosed its violation directly to the FCC’s Wireless Bureau, which then referred the case to the agency’s Enforcement Bureau.

After an investigation is initiated, the Bureau typically sends the subject of the investigation a Letter of Inquiry (LOI) posing a series of questions related to the alleged violation. The recipient typically has 30 days to respond to the LOI, though it may request additional time.

If the Bureau reviews the LOI responses and believes a rule violation has occurred, it has a few options. It may: (i) take no further action; (ii) issue a Notice of Apparent Liability (NAL); or, (iii) negotiate a settlement agreement with the target company (aka a “Consent Decree”).

  • NAL – Alleges a rule violation occurred, finds the recipient apparently liable for a fine or penalty (typically termed a “forfeiture” in FCC parlance).
  • Consent Decree – Voluntary settlement between the LOI recipient and the FCC. A Consent Decree may require the recipient to admit wrongdoing, pay a fine to the federal government, and implement a compliance plan to guard against future rule violations.

Marriott negotiated a Consent Decree. Perhaps even more onerous than the substantial fine is the FCC-mandated compliance plan. Marriott’s Compliance plan has several burdensome components, including:

  • Compliance Officer – Designate a senior corporate manager to serve as the Compliance Officer.
  • Operating Procedures – Establish operating procedures that all covered employees follow to ensure compliance with the FCC’s transfer of control rules.
  • Compliance Manual – Develop and distribute a compliance manual to all covered employees.
  • Compliance Training Program – Establish and implement a compliance training program and train all covered employees on the FCC’s transfer of control rules within 120 days.
  • Report Noncompliance – Report any noncompliance within 15 days of discovering such noncompliance.
  • Compliance Report – File four periodic compliance reports with the FCC over the next three years. Each report must be certified by the Compliance Officer and provide a detailed description of the steps the company has taken to promote compliance with the FCC’s transfer of control rules.

*       *       *

It is never good to be in the crosshairs of the FCC’s Enforcement Bureau. And corporate transactions are ripe for potential FCC rule violations because FCC licenses are commonly overlooked by transactional teams. Since mergers and acquisitions raise unique FCC licensing issues, such transactions require heightened awareness from both parties. Only by closely tracking all FCC-licensed assets can companies involved in corporate transactions ensure compliance with all FCC requirements.

For more information, please contact Wes Wright (wright@khlaw.com; 202.434.4239).

The FCC has established deadlines for Fixed Satellite Service earth station licensees to certify the accuracy of all information on their current earth station license and provide the agency with additional details about existing operations.  Earlier this year, the Commission sought comment on the feasibility of allowing commercial wireless services to use or share use of the 3.7-4.2 GHz spectrum band.  As part of this effort, the FCC is asking earth station licensees to certify existing operations and provide additional technical information.  The FCC hopes that its efforts will unveil lightly used portions of the 4 GHz band where the agency can introduce fixed and mobile terrestrial use.

The first step is for the Commission to get its arms around existing satellite operations in the band.  As such, the FCC is asking C-Band users to provide the agency with the call sign(s); geographic location(s); licensee contact information; antenna gain; azimuth and elevation gain pattern; antenna azimuth relative to true north; antenna elevation angle; satellite(s) at which the earth station is pointed; number of transponders; how often each is used; and, antenna site elevation and height above ground.  This information is required by October 17th.

Once the FCC has completely digested all this information, it may create an opportunity for fixed microwave links in the band, but it’s a bit too early to tell how expansive any additional use of the 4 GHz band may be. For now, the FCC is focused on protecting existing satellite earth station operations.

For more information, please contact Wes Wright (wright@khlaw.com; 202.434.4239).

 

In December 2013, the FCC adopted rules to improve 911 network reliability.  The rules require Covered 911 Service Providers (“Providers”) to take certain measures to provide reliable 911 service.  The specific measures adopted by the agency attempt to address three network vulnerabilities identified by the FCC in the aftermath of the derecho storm that knocked out 911 service along the east coast in 2012.

Earlier this summer, the FCC released a Public Notice seeking comment on the efficacy of these rules and soliciting input on whether those rules need to be revised.  Comments were filed last month and Reply Comments are due in mid-August.

The Rules

The rules require Providers to promote reliable 911 service with respect to three network elements: circuit auditing, central-office backup power, and diverse network monitoring.  Providers must certify annually that they have met the FCC’s safe harbor provisions for each of those elements or have taken reasonable alternative measures in lieu of those safe harbor protections.  The rules also require Providers to notify PSAPs of any outage that impacts 911 service.

Providers subject to these rules include entities that provide 911, E911, or NG911 capabilities such as call routing, automatic location information (ALI), automatic number identification (ANI), or the functional equivalent of those capabilities, to a public safety answering point (PSAP).

What Has Worked?

Identifying Network Elements.  The Commission considered adopting a generic standard that would have required Providers to take reasonable measures to generally promote network reliability.  Instead, it adopted specific rules that require Providers to meet precise (and narrow) benchmarks that the agency believes will promote network reliability.  This includes conducting circuit audits, ensuring adequate backup power is maintained in data centers, and having diverse paths to monitor network traffic.  These specific standards have worked.  They enable the FCC to address key vulnerabilities in the 911 network while providing the industry with clear, achievable targets.

Annual Certification.  One reason the FCC requires an annual certification is to ensure that senior management is aware of significant vulnerabilities in the 9-1-1 network and accountable for decisions regarding network design, maintenance, and disaster preparedness.  In my experience, this also has worked.  The rules require a senior executive to sign a certification under penalty of perjury, which ensures that senior management is aware of – and involved in – network design and maintenance decisions.

What Needs to be Changed?

Though largely successful, the Commission should consider a few revisions to clarify and strengthen the rules.

Definition of a Provider.  The definition of a Covered 911 Service Provider could be revised to add clarity.  The Commission should tweak this definition to confirm that a Provider must have a direct contractual relationship with a PSAP to provide routing, ALI, and/or ANI service.  This would eliminate confusion about which entities are – and are not – Providers subject to these rules.

PSAP Notifications.  The rules require Providers to communicate outage information directly to PSAPs.  The well-founded intent is to enable PSAP personnel to have real time outage information to formulate appropriate responses to network issues.  However, this frequently leads to individual PSAPs receiving multiple outage updates for a single network event.  By revising the definition of a Provider (as suggested above), the FCC may be able to eliminate some of the duplicative PSAP communication problems so that only the entity with a contractual relationship with the PSAP communicates outage information.

Where Do We Go From Here?

The FCC is seeking objective feedback about the rules because it has not yet determined whether they should be revised, expanded, curtailed, or left unchanged.  One bellwether for determining whether the FCC believes the rules have been effective is going to be how the agency treats the annual certification requirement.

Some commenters have suggested that the certification should be made once every two, three, or even five years.  Other parties urged the FCC to relax the certification obligation so that it need not be made under penalty of perjury by a corporate officer.  Still other parties have urged the FCC to eliminate the certification requirement.

How the Commission handles this issue will indicate whether the agency pursues a deregulatory agenda.

My two cents?  By and large, the rules have worked.  The FCC should make some minor clarifying revisions to the rules, but should otherwise leave the rules unchanged.

The nation watched President Trump take the oath of office last Friday.  On the same day, but to considerably less fanfare, it was widely reported that President Trump would appoint Commissioner Ajit Pai as Chairman of the FCC.  It became official on January 23, 2017.

Chairman Pai is joined by current Commissioners O’Reilly (a Republican) and Clyburn (a Democrat).  The Republican majority should make it easier for Chairman Pai to quickly act on his priorities.

What are his priorities?  To get a sense, we examine then-Commissioner Pai’s public statements in several high-profile – and sometimes contentious – FCC proceedings. Continue Reading FCC Priorities Under Republican Leadership

Last week, the FCC released a Fact Sheet outlining a draft Report and Order and Further Notice of Proposed Rulemaking the Commission will vote on in July.  The proposal would make additional licensed spectrum available in the 28, 37 and 39 GHz bands.  It also would make 7 GHz of spectrum available for unlicensed use in the 64-71 GHz band.  Finally, the item proposes shared use of the 37-37.6 GHz band between commercial and federal users.  The Further Notice will consider additional rule changes that could increase access to various bands above 24 GHz, including 70 GHz (71-76 GHz) and 80 GHz (81-86 GHz) bands.  For more information, please contact Wes Wright (wright@khlaw.com; 202.434.4239).

Among entertainers, the FCC is seen as the self-righteous censor that levies high profile fines against  a broadcaster for a “wardrobe malfunction,” or a radio station for playing a profane song.  It’s no wonder Eminem complained that the FCC wouldn’t let him be!

But, the times they are a-changin.  Earlier this week, a high-profile musician offered his wholehearted support for one of the FCC’s more challenging regulatory initiatives – live, on national television.

As Stevie Wonder prepared to announce the winner of the Grammy for Song of the Year, he opened the envelope and discovered the recipient’s name was written in braille.  He showed the card to the TV audience and taunted the viewers for being unable to read braille, punctuating his impromptu remarks with “nah, nah, nah, nah, nah, nah!”  He then turned serious, telling the audience, “we need to make everything accessible to every person with a disability.”

In 2010, Congress passed the 21st Century Communications and Video Accessibility Act (“CVAA”) looking to make communications devices and services, as well as certain functions of video programming, more accessible to disabled individuals and directing the FCC to adopt rules to make it happen.  The FCC has spent the past few years doing just that.

The rules are broken into two parts.  The first, “Title I,” aims to ensure accessibility features are built in to certain advanced communications services (ex. texting, email, and Facebook) and devices (ex. smartphones and tablets) that rely on broadband.  The second, “Title II,” calls for the inclusion of enhanced accessibility features in devices that enable viewing of video programming (ex. an Apple TV).  The devices are required to support closed captioning and text-to-speech capabilities for on-screen menus and guides.

Under Title I, service providers and device manufacturers must understand whether their service or product meets the FCC’s definition of an advanced communication service.  If so, companies should understand the FCC’s prescribed accessibility functions and incorporate them into their service or device.  The rules also require providers and manufacturers to create and maintain records detailing these efforts, provide the FCC with a company contact person to address consumer complaints, (whose contact information will be publicly-available in a Commission database) and certify annually it has complied with these rules.

The goal of Title II, is to enable disabled individuals to enjoy video programming by imposing certain obligations to support closed captioning and requiring on-screen menus and guides to be accessible to these consumers.  The rules are focused on ensuring that the underlying device is accessible, but the agency’s expansive definition of devices includes any video-playing apps (ex. Netflix) that are preinstalled by the manufacturer.  While the FCC’s rules implementing Title I took effect a few years ago, manufacturers of devices have until December 20, 2016, to comply with the Title II accessibility obligations.

The FCC may consider reasonable waiver requests from device manufacturers under Title II, just as the agency did under Title I.  For instance, the Coalition of E-Reader Manufacturers requested the FCC exempt e-readers (ex. Kindle) from the Title I accessibility rules.  Initially, the FCC granted temporary waivers, but earlier this year made the waivers permanent.  The agency recognized that although e-readers are capable of accessing advanced communications services, they are primarily designed for reading text-based digital works, and not for emailing, texting, or surfing the web.

Notwithstanding the challenges posed by the CVAA, the FCC should do its best to reach Congress’ noble goal of ensuring access to video programming for disabled individuals.  To paraphrase Stevie Wonder:  it’d be great if everybody with a disability could enjoy his next award presentation.