SHLB SHLB 2014 National Conference2014 National Conference

May 7, 2014May 7, 2014

Jim BallerJim BallerThe Baller Herbst Law Group, PCThe Baller Herbst Law Group, PCWashington, DCWashington, DC(202) 833-1144(202) 833-1144Jim@Baller.com Jim@Baller.com

How to Comply With Key How to Comply With Key Federal Regulatory RequirementsFederal Regulatory Requirements

DisclaimerDisclaimer

This presentation does not constitute legal advice This presentation does not constitute legal advice and should not be interpreted as such. and should not be interpreted as such.

For advice on federal, state or local law, please For advice on federal, state or local law, please consult qualified legal counsel.consult qualified legal counsel.

OverviewOverview

• See BHLG memo for much more detail. See BHLG memo for much more detail. •

• Focus today: Federal Focus today: Federal communicationscommunications compliance issues affecting compliance issues affecting serviceservice providersproviders, as such, as such

• not requirements of general applicabilitynot requirements of general applicability

• not BTOP requirementsnot BTOP requirements

• not state law counterpartsnot state law counterparts

• not requirements other capacitiesnot requirements other capacities

• not requirements on not requirements on othersothers – poles, towers, content, programming, – poles, towers, content, programming, MDUs, etc. MDUs, etc.

• Approach:Approach:

• Key classificationsKey classifications

• Major requirementsMajor requirements

Key ClassificationsKey Classifications

• Communications Act and State counterpartsCommunications Act and State counterparts

• Separate “silos” for telecom, cable, wireless, and Separate “silos” for telecom, cable, wireless, and “enhanced” or “information services” “enhanced” or “information services”

• Each has its own history, policies, definitions, Each has its own history, policies, definitions, benefits, burdens, FCC rulings, court decisions, benefits, burdens, FCC rulings, court decisions, constituenciesconstituencies

• Convergence: Technological + Corporate + MarketConvergence: Technological + Corporate + Market

For compliance, it’s critical to know how an activity is For compliance, it’s critical to know how an activity is classified for regulatory purposes.classified for regulatory purposes.

““Telecommunications”Telecommunications”

““[T]he [T]he transmissiontransmission, between or among points , between or among points specified by the user, of information of the user's specified by the user, of information of the user's choosing, without change in the form or content choosing, without change in the form or content of the information as sent and received.”of the information as sent and received.”

47 U.S.C. § 153(43)47 U.S.C. § 153(43)

“Telecommunications” can be provided by either private carriers or common carriers.

““Telecommunications Service”Telecommunications Service”

““[T]he offering of telecommunications [T]he offering of telecommunications for a fee directly to the for a fee directly to the publicpublic, or to such classes of users as to be effectively available , or to such classes of users as to be effectively available directly to the public, directly to the public, regardless of the facilities usedregardless of the facilities used.” .”

47 U.S.C. § 153(46)47 U.S.C. § 153(46)

“ “Telecommunications service” ≡ common carriage Telecommunications service” ≡ common carriage

““Cable Service”Cable Service”

““The The one-wayone-way transmission to transmission to subscriberssubscribers of (i) video of (i) video programmingprogramming, or (ii) other programming service, and subscriber , or (ii) other programming service, and subscriber interaction, if any, which is required for the selection interaction, if any, which is required for the selection or use or use of of such video programming or other programming service.”such video programming or other programming service.”

47 U.S.C. § 602(6) 47 U.S.C. § 602(6)

““Information Service”Information Service”

““The offering of a The offering of a capabilitycapability for generating, acquiring, for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications…”making available information via telecommunications…”

47 U.S.C. § 153(20)47 U.S.C. § 153(20)

FCC: Telecommunications <=> Information Service = Information Service, which is generally unregulated.

IP-Enabled Services?IP-Enabled Services?

• IP-Enabled Services – not yet classified (2004 docket)IP-Enabled Services – not yet classified (2004 docket)

• ““Interconnected Voice over Internet Protocol”:Interconnected Voice over Internet Protocol”:

“ “[I]nterconnected VoIP services include those VoIP [I]nterconnected VoIP services include those VoIP services that: (1) enable real-time, two-way voice services that: (1) enable real-time, two-way voice communications; (2) require a broadband connection communications; (2) require a broadband connection from the user’s location; (3) require IP-compatible from the user’s location; (3) require IP-compatible customer premises equipment; and (4) permit users customer premises equipment; and (4) permit users to receive calls from to receive calls from and and terminate calls to the PSTN”terminate calls to the PSTN”

• Internet Protocol Television: Not defined or regulatedInternet Protocol Television: Not defined or regulated

Application of DefinitionsApplication of Definitions

• IntraIntra-governmental provisioning-governmental provisioning

• InterInter-governmental provisioning-governmental provisioning

• Infrastructure leasing (e.g., poles, dark fiber, towers)Infrastructure leasing (e.g., poles, dark fiber, towers)

• Point-to-point data (“lit” or “dim” fiber)Point-to-point data (“lit” or “dim” fiber)

• Transmission + Info Service = Info ServiceTransmission + Info Service = Info Service

• Telephony (“traditional” v. VoIP)Telephony (“traditional” v. VoIP)

• Video (“traditional cable” v. SMATV v. IPTV)Video (“traditional cable” v. SMATV v. IPTV)

• Emerging services (games, security, interactive, etc.)Emerging services (games, security, interactive, etc.)

Registration RequirementsRegistration Requirements

• FCC Registration Number (FRN)FCC Registration Number (FRN)• Required to do business with FCCRequired to do business with FCC• https://fjallfoss.fcc.gov/coresWeb/publicHome.do https://fjallfoss.fcc.gov/coresWeb/publicHome.do

• Form 499 Filer IDForm 499 Filer ID• Entities that must file universal service Form 499-A (telecom, VoIP) Entities that must file universal service Form 499-A (telecom, VoIP)

(obtained after first 499-A filed)(obtained after first 499-A filed)• http://transition.fcc.gov/Forms/Form499-A/499a-2012.pdf http://transition.fcc.gov/Forms/Form499-A/499a-2012.pdf • Required for E-Rate SPINRequired for E-Rate SPIN

• USF Service Provider Identification Number (SPIN)USF Service Provider Identification Number (SPIN)• For E-Rate subsidies, file Form 498 www.usac.orgFor E-Rate subsidies, file Form 498 www.usac.org

• PSID / CUIDPSID / CUID• All new cable operators, for all new communities served, must file Form All new cable operators, for all new communities served, must file Form

322 online at https://apps.fcc.gov/coals/ 322 online at https://apps.fcc.gov/coals/

Construction and DiscontinuanceConstruction and Discontinuance

• 47 U.S.C. § 214 requires all telecommunications carriers and I-47 U.S.C. § 214 requires all telecommunications carriers and I-VoIP providers to obtain FCC approval before con-structing, VoIP providers to obtain FCC approval before con-structing, acquiring, operating, or extending a line that is interstate in acquiring, operating, or extending a line that is interstate in nature or is a local, branch, or terminal line within a single nature or is a local, branch, or terminal line within a single state and is more than 10 miles in lengthstate and is more than 10 miles in length

• Telecommunications carriers and I-VoIP providers must also Telecommunications carriers and I-VoIP providers must also obtain FCC approval before discontinuing service: obtain FCC approval before discontinuing service: •Provide prior notice to all affected customers of its proposed Provide prior notice to all affected customers of its proposed discontinuances.   discontinuances.   •Submit a copy of the discontinuance application to the public Submit a copy of the discontinuance application to the public utility commission and governor of the state of discontinuance utility commission and governor of the state of discontinuance as well as to the Secretary of Defense. as well as to the Secretary of Defense.

““Broadband” ReportingBroadband” Reporting

• Form 477 – Local Telephone Competition and Form 477 – Local Telephone Competition and Broadband ReportingBroadband Reporting

• Who: Who:

• Local exchange carriersLocal exchange carriers

• Interconnected VoIPInterconnected VoIP

• Retail facilities-based broadbandRetail facilities-based broadband

• ““Broadband” begins at 200 kbps for reportingBroadband” begins at 200 kbps for reporting

• Info on what types of services, number of Info on what types of services, number of connections, etc., by Census Tractconnections, etc., by Census Tract

• Deadlines: March 1, September 1Deadlines: March 1, September 1

Universal Service ProgramUniversal Service Program

• Providers of interstate telecom, telecom service, or Providers of interstate telecom, telecom service, or I-VoIP must file FCC Forms 499A and 499Q and must I-VoIP must file FCC Forms 499A and 499Q and must contribute to the USF and other universal service contribute to the USF and other universal service support mechanisms (TRS, LNP, NANPA)support mechanisms (TRS, LNP, NANPA)

• USF contributions can add 15-17% to costs, which can USF contributions can add 15-17% to costs, which can have major competitive impacthave major competitive impact

• Telecom vs. Telecom Service vs. I-VoIPTelecom vs. Telecom Service vs. I-VoIP• Affects when provider must register, file reports, and Affects when provider must register, file reports, and

contribute to USF and other support mechanismscontribute to USF and other support mechanisms

Universal Service (continued 2)Universal Service (continued 2)

• Filing and contribution obligations based on “end-user revenues” Filing and contribution obligations based on “end-user revenues” from sale of covered servicesfrom sale of covered services

• ““End-user” does not just mean a retail customer, but also any End-user” does not just mean a retail customer, but also any

customer that does not contribute to the USFcustomer that does not contribute to the USF • Sellers of exempt services (Cablecos, ISPs)Sellers of exempt services (Cablecos, ISPs)

• Sellers subject to Sellers subject to de minimis de minimis exemptionexemption

• Sellers that do not make required paymentsSellers that do not make required payments

• Wholesalers can avoid liability on sales to resellers by maintaining Wholesalers can avoid liability on sales to resellers by maintaining information required by FCC information required by FCC

• Wholesalers can pass through USF contributionsWholesalers can pass through USF contributions

Universal Service (continued 3)Universal Service (continued 3)• De minimisDe minimis exception exception

• contribution/year < $10,000 (~ $58,824 @ 17%)contribution/year < $10,000 (~ $58,824 @ 17%)• De minimis De minimis providers of telecom service and Interconnected VoIP must providers of telecom service and Interconnected VoIP must

still file 499-A and contribute to TRS/NANPA/LNPstill file 499-A and contribute to TRS/NANPA/LNP• Public Safety or Government Entities exceptionPublic Safety or Government Entities exception

• ““[A]ny entity providing interstate telecommunications [A]ny entity providing interstate telecommunications exclusivelyexclusively to to public safety or government entities public safety or government entities who who does not offer services to othersdoes not offer services to others.”.”

• Self-service exceptionSelf-service exception• ““Government entities that purchase telecommunications services in Government entities that purchase telecommunications services in

bulk on behalf of themselves, such as state networks for schools and bulk on behalf of themselves, such as state networks for schools and libraries.”libraries.”

• Intrastate service exceptionIntrastate service exception• Endpoints in same state and traffic 10% < interstateEndpoints in same state and traffic 10% < interstate

Universal Service (continued 4)Universal Service (continued 4)

• Forms 499A and 499Q are long and labor-intensiveForms 499A and 499Q are long and labor-intensive• Need to get internal or outside accountant involvedNeed to get internal or outside accountant involved• Deadlines: Deadlines:

• Form 499A: April 1Form 499A: April 1• Form 499Q: Feb. 1, May 1, August 1, Nov. 1Form 499Q: Feb. 1, May 1, August 1, Nov. 1

• FCC’s aggressive enforcementFCC’s aggressive enforcement• The number of contributors is dropping while demand for The number of contributors is dropping while demand for

subsidies is increasingsubsidies is increasing• FCC demands back payments + interest + forfeitures FCC demands back payments + interest + forfeitures • City of Manitowoc caseCity of Manitowoc case

CALEACALEA

• Communications Assistance for Law Enforcement Act Communications Assistance for Law Enforcement Act requires facilities-based telecom carriers to adopt technical requires facilities-based telecom carriers to adopt technical features that will enable them to assist law enforcement officials to features that will enable them to assist law enforcement officials to execute promptly lawful interception ordersexecute promptly lawful interception orders

• Definition of “telecom carrier” is broader than under the Telecom Definition of “telecom carrier” is broader than under the Telecom Act and includes ISPs and I-VoIP providersAct and includes ISPs and I-VoIP providers

• ““Private network” and “Interconnection” exceptionsPrivate network” and “Interconnection” exceptions

• Providers must file a compliance plan via FCC Form 445Providers must file a compliance plan via FCC Form 445

• Potential fines of $10,000/day for violating CALEAPotential fines of $10,000/day for violating CALEA

• See http://www.baller.com/calea.htmlSee http://www.baller.com/calea.html

• 47 C.F.R. § 222 requires providers of telecom service 47 C.F.R. § 222 requires providers of telecom service and I-VoIP to safeguard Customer Proprietary Network and I-VoIP to safeguard Customer Proprietary Network Information (CPNI)Information (CPNI)

• CPNI includes phone numbers, frequency, duration, and CPNI includes phone numbers, frequency, duration, and timing of calls and any call services (e.g. call waiting) that timing of calls and any call services (e.g. call waiting) that a customer purchases a customer purchases

• Opt-in/opt-outOpt-in/opt-out customer approval for use of customer's customer approval for use of customer's individually identifiable CPNI for the purpose of marketing individually identifiable CPNI for the purpose of marketing communications-related services to that customercommunications-related services to that customer

CPNI CPNI

• Before use of CPNIBefore use of CPNI,, a provider must a provider must notifynotify the customer the customer of the customer's right to restrict use, disclosure, or of the customer's right to restrict use, disclosure, or access to customer's CPNI. Must maintain record of access to customer's CPNI. Must maintain record of notification.notification.

• A provider must properly A provider must properly authenticateauthenticate a customer prior to a customer prior to disclosing CPNI. disclosing CPNI.

• Providers must Providers must traintrain their personnel as to when they are their personnel as to when they are and are not authorized to use CPNI and must have an and are not authorized to use CPNI and must have an express disciplinary process in place. express disciplinary process in place. 

• Providers must Providers must notify law enforcement notify law enforcement of breaches.of breaches.

CPNI (continued 2)CPNI (continued 2)

• By March 1 each year, providers must file a By March 1 each year, providers must file a certificationcertification of compliance signed by an officer setting forth the of compliance signed by an officer setting forth the provider’s procedures for protection CPNI. A FAQ and provider’s procedures for protection CPNI. A FAQ and compliance form are available here: http://goo.gl/LKdWccompliance form are available here: http://goo.gl/LKdWc

• Recent FCC enforcement actions -- $20,000 fines for Recent FCC enforcement actions -- $20,000 fines for failure to file timely reports. failure to file timely reports.

CPNI (continued 3)CPNI (continued 3)

• 47 U.S.C. §§ 255, 716-718 require providers of telecom-47 U.S.C. §§ 255, 716-718 require providers of telecom-munications service, advanced communications services, munications service, advanced communications services, I-VoIP, and equipment manufacturers to make changes to I-VoIP, and equipment manufacturers to make changes to their services or equipment if they can “readily” make such their services or equipment if they can “readily” make such services and equipment accessible to individuals with services and equipment accessible to individuals with disabilities.  disabilities. 

• Providers must maintain records of their efforts to ensure Providers must maintain records of their efforts to ensure that their services and equipment are accessible to that their services and equipment are accessible to individuals with disabilities.  individuals with disabilities. 

• By April 1 of each year, providers must also file with the By April 1 of each year, providers must also file with the FCC, a certification of their actions to comply with this FCC, a certification of their actions to comply with this requirement and their contact information.  The FCC’s requirement and their contact information.  The FCC’s notice of this requirement is at http://goo.gl/7FAoR  notice of this requirement is at http://goo.gl/7FAoR  

Accessibility RequirementsAccessibility Requirements

• Special access service encompasses all transmission Special access service encompasses all transmission services that do not use local switches. It offers a way for services that do not use local switches. It offers a way for fiber networks to reach off-network sites. Fiber networks fiber networks to reach off-network sites. Fiber networks may also be providers of special access service.   may also be providers of special access service.  

• For years, the FCC regulated special access service For years, the FCC regulated special access service provided by dominant local exchange carriers.  In 1999, provided by dominant local exchange carriers.  In 1999, the FCC adopted a process to relax these requirements. the FCC adopted a process to relax these requirements.

• In August 2012, the FCC suspended this process, finding In August 2012, the FCC suspended this process, finding that it was not working, and in December 2012, the FCC that it was not working, and in December 2012, the FCC launched an inquiry to determine whether and to what launched an inquiry to determine whether and to what extent special access rules may still be necessary. extent special access rules may still be necessary.

Special Access RequirementsSpecial Access Requirements

• On September 18, 2013, the FCC issued an order On September 18, 2013, the FCC issued an order requiring massive amounts of information from all requiring massive amounts of information from all providers and purchasers of special access in ILEC providers and purchasers of special access in ILEC price-cap areas and all price-cap areas and all entities that provide best efforts business broadband Internet access services in these areas (unless they have fewer than 15,000 customers and fewer than 1,500 business broadband customers as of December 18, 2012).

• OMB began review in December 2013

• Fines of up to $150,000 for each violation or each day of a continuing violation, up to a maximum of $1,500,000 for any single act or failure to act that is a continuing violation.

Special Access (continued)Special Access (continued)

FCC FCC Open Internet OrderOpen Internet Order , 2010 WL 5281676 , 2010 WL 5281676 (12-23-10), (12-23-10), aff’d in part aff’d in part and rev’d in partand rev’d in part, , Verizon Corp. v. FCCVerizon Corp. v. FCC, 740 F.3d 623 (D.C. Cir. 2014):, 740 F.3d 623 (D.C. Cir. 2014):

•TransparencyTransparency. Fixed and mobile broadband providers must disclose . Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and the network management practices, performance characteristics, and terms and conditions of their broadband services. (Affirmed) The terms and conditions of their broadband services. (Affirmed) The FCC’s guidance on compliance with this requirement is available at FCC’s guidance on compliance with this requirement is available at http://goo.gl/evL6chttp://goo.gl/evL6c. .

•No blockingNo blocking.. Fixed broadband providers may not block lawful Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services; applications that compete with their voice or video telephony services; (Reversed) (Reversed)

•No unreasonable discriminationNo unreasonable discrimination.. Fixed broadband providers may not Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic. unreasonably discriminate in transmitting lawful network traffic. (Reversed)(Reversed)

Net NeutralityNet Neutrality

• Wireless BIAS providers are subject to even less extensive Wireless BIAS providers are subject to even less extensive requirementsrequirements..

• Providers of BIAS must disclose accurate information about Providers of BIAS must disclose accurate information about network management practices, performance, and commercial network management practices, performance, and commercial terms of its BIAS sufficient for consumers to make informed terms of its BIAS sufficient for consumers to make informed choices regarding use of such services and for content, choices regarding use of such services and for content, application, service, and device providers to develop, market, application, service, and device providers to develop, market, and maintain Internet offeringsand maintain Internet offerings. .

• Providers of BIAS must disclose their practices on a publicly Providers of BIAS must disclose their practices on a publicly available, easily accessible website and at the point of sale. available, easily accessible website and at the point of sale. The FCC’s guidance on compliance with this requirement is The FCC’s guidance on compliance with this requirement is available at http://goo.gl/evL6cavailable at http://goo.gl/evL6c. .

Net Neutrality (continued)Net Neutrality (continued)

Intellectual Property / Privacy Intellectual Property / Privacy

• Digital Millennium Copyright Act of 1998 (DMCA)Digital Millennium Copyright Act of 1998 (DMCA)• Establishes “safe harbor” for providers of Internet Establishes “safe harbor” for providers of Internet

access and hosting services. Providers must:access and hosting services. Providers must:• Adopt and publish policy providing for takedowns Adopt and publish policy providing for takedowns

and termination of repeat infringers’ accounts “in and termination of repeat infringers’ accounts “in appropriate circumstances”appropriate circumstances”

• Register designated agent with U.S. Copyright Register designated agent with U.S. Copyright OfficeOffice

• Potential Section 230 LiabilityPotential Section 230 Liability• Other Other

Other RequirementsOther Requirements

• See BHLG memo for detailsSee BHLG memo for details

• Numerous special Cable System requirementsNumerous special Cable System requirements

• Intellectual Property/ Privacy (DCMA)Intellectual Property/ Privacy (DCMA)

• E911E911

• Form 395: Common Carrier Annual Employment Report

• Other requirements ….

Questions?Questions?