Key Regulatory Dates

Connect America Fund Phase II Challenges Due August 14, 2014

  • The Wireline Competition Bureau has opened the challenge process of Phase II of the Connect America Fund for price cap territories. Parties wishing to participate have until August 14, 2014 to file their initial challenges with the Bureau. The Bureau has released its list of census blocks that are 1) located in price cap territories; 2) “high cost” according to the adopted Connect America Cost Model, which states that the census block has a calculated average cost per location above $52.50 and below $207.81; and (3) shown as unserved by an unsubsidized competitor. Challenges may only be based on whether the block is served by an unsubsidized competitor. Challengers must use FCC Form 505 to file a challenge in WC Docket 14-93. The Public Notice announcing the opening of the process can be found here, and the process in general can be found here. (DA 14-942) For more information, please contact Katherine Barker Marshall or Joseph P. Bowser, or the Arent Fox professional who handles your matters.

FCC Form 477 Due October 1, 2014

  • The Local Telephone Competition and Broadband Report, commonly known as FCC Form 477, is due October 1, 2014, and reports on connections as of June 30, 2014. Entities that are required to file FCC Form 477 include: Providers of wired or fixed wireless local exchange services; facilities-based providers of broadband connections to end users; providers of interconnected Voice over Internet Protocol (VoIP) services to end users, and facilities-based mobile providers. Filers are also required to utilize the new portal for filing FCC Form 477. More information can be found here. For more information, please contact Katherine Barker Marshall or Joseph P. Bowser, or the Arent Fox professional who handles your matters.

FCC Clarifies Standard of Review for Reseller Exemptions for Federal USF

  • In connection with the preparation of your 499 Forms, the FCC released an Order on July 25, 2014 stating that wholesale providers are required to meet a “preponderance of the evidence” standard to demonstrate their “reasonable expectation” that a reseller has directly contributed to the federal Universal Service Fund (USF) on its services that incorporated the wholesaler’s services. In its original Wholesaler-Reseller Clarification Order, the FCC stated that the “clear and convincing evidence” standard applies. This clarification brings the standard of proof in line with what applied in other administrative proceedings and in E-rate adjudications. USAC is instructed to apply the “preponderance of the evidence” standard after evaluating the reliability of any evidence submitted by the wholesaler, to demonstrate that the wholesaler had a reasonable expectation that its customer contributed to the federal USF on revenues from services that incorporated the purchased telecommunications services. A copy of the Order can be found here. For more information, please contact Katherine Barker Marshall or Joseph P. Bowser, or the Arent Fox professional who handles your matters. (FCC 14-104)

Key Industry Events

FCC Open Commission Meeting, August 8, 2014, Washington, DC

  • For more information on the Commission’s next Open Meeting, in which the Commission is slated to take on the Nationwide Text-to-911 issue, among others, click here.

Super Wi-Fi Summit, August 12–14, 2014, Las Vegas

  • Arent Fox partner Ross A. Buntrock will be speaking at the Super Wi-Fi Summit in Las Vegas. For more information, click here.

Next USAC E-rate Applicant Training, September 29, 2014, Washington, DC

  • The Universal Service Administrative Company (USAC) has announced workshops for schools, libraries, and consortia that plan to apply for funding from the Schools and Libraries Program, commonly known as E-rate. The workshops are complimentary and identical, and will take place in various cities throughout the country this fall. The next workshop is in Washington, DC. More information about the workshops, as well as registration information, can be found here.

News Roundup

Seventh Circuit Allows False Claims Act Action Against Wisconsin Bell to Proceed

  • On July 28, 2014, the United States Court of Appeals for the Seventh Circuit reversed a district court’s ruling that it did not have jurisdiction over a False Claims Act (“FCA”) action against Wisconsin Bell. The plaintiff alleged that Wisconsin Bell was overcharging school districts for services provided under the Education Rate Program (“E–Rate Program”). Specifically, the plaintiff alleged that Wisconsin Bell was charging certain schools higher rates than others for the same services and was also charging the Wisconsin Department of Administration (“DOA”) less than the school districts. The plaintiff claimed this practice violated the E-Rate Program’s requirement to offer a school the lowest price charged to similarly situated non-residential customers. Wisconsin Bell argued that because its contract with the DOA was on the DOA website, and this publicly available contract was how the plaintiff had learned about the DOA pricing, the claim was barred by the FCA’s public-disclosure bar. The Seventh Circuit disagreed, noting that the contract alone did not establish fraud and that the plaintiff had conducted significant investigation and acquired extensive knowledge on his own. U.S. ex rel. Heath v. Wisconsin Bell, Inc., 12-3383, 2014 WL 3704023 (7th Cir. July 28, 2014). For more information, please contact Radhika Bhat or Joseph P. Bowser, or the Arent Fox professional who handles your matters.

Senate Report Takes Wireless Carriers to Task for Bill Cramming

  • According to a report released by the Democrat’s Office of Oversight and Investigations for the Senate Commerce, Science, and Transportation Committee, “wireless cramming has been widespread and has likely cost consumers hundreds of millions of dollars.” Cramming is the practice of placing unauthorized charges on a consumer’s phone bill. According to the new report, third-party charges on wireless phone bills is a “billion dollar industry that has yielded tremendous revenues for carriers” with “AT&T, Sprint, T-Mobile, and Verizon generally retain[ing] 30-40 percent of each vendor charge placed” on their customers’ bills. The report was released on July 30, 2014, the same day the Senate Committee held a hearing on wireless cramming. “For as long as they have been giving outside parties access to their customers’ bills, the major phone companies have assured Congress and the public that they are protecting their customers from billing fraud.... But this report makes it clear that is not the case,” Sen. John D. (Jay) Rockefeller IV (D-W.Va.), the committee’s chairman, said in a statement. In prepared remarks for the hearing, Sen. John Thune (R–S.D.), the ranking member of the committee, expressed concern for consumers, but also a need for caution, saying, “while we must strive to protect consumers from fraud, we must also make sure that we do so in a way that does not stifle innovation.” The full report is titled Cramming on Mobile Phones: A Report on Wireless Billing Practices and is available here. For more information, please contact G. David Carter or Joseph P. Bowser, or the Arent Fox professional who handles your matters.

FCC Seeks Comment on Whether and, if So, How Consumers Can Revoke Consent Under the TCPA

  • On August 1, 2014, the FCC’s Consumer and Governmental Affairs Bureau released a public notice seeking comment on a petition for declaratory ruling filed by Santander Consumer USA, Inc. related to the Telephone Consumer Protection Act (TCPA) and the revocation of a consumer’s prior express consent. The Bureau set deadlines for initial comments of September 2, 2014, while reply comments are due September 15, 2014. In its petition, Santander asks the FCC to issue a ruling holding that consumers cannot revoke their “prior express consent” to receive autodialed informational calls to their cell phones under the TCPA. Alternatively, Santander requests that if the FCC decides that the TCPA permits consumers to revoke their prior express consent, calling companies should be permitted to designate one or more methods that a consumer must use, such as in writing at the mailing address designated by the caller, in order for the revocation of consent to be considered effective. Santander asserts that nowhere in the TCPA or in the FCC’s implementing regulations is there a right for consumers to revoke their consent to receive autodialed non-telemarketing calls. Courts, however, have held that such consent is revocable, leading consumers to file TCPA class action lawsuits where the “only issue is whether the consumer’s allegation that he or she ‘verbally revoked’ consent … is sufficient to establish a violation.” Santander argues that even the most sophisticated compliance management system “cannot prevent against this type of claim or the enormous exposure it creates” because companies are forced to prove a negative, i.e., the consumer did not verbally revoke his or her consent. A copy of Santander’s petition can be found here