Articles Posted in Telecommunications

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

FCC Proposes $12,500 Fine for False Certification That FM Translator was Constructed as Authorized
Telecommunications Company Warned Over Apparent Transmission of Illegal Robocalls
Station Licenses in Danger Over Lack of Candor and Intentional Misrepresentation Claims Before the FCC

False Certification Brings $12,500 Proposed Fine for Louisiana FM Translator Station

The FCC issued a Notice of Apparent Liability for Forfeiture (NAL) to the licensee of a Louisiana FM translator for falsely certifying to construction as authorized (but without intent to deceive), failing to file a required form to obtain consent to change antennas, and for constructing and operating with an unauthorized antenna for approximately two months. The violations alleged were raised by a third party Petition for Reconsideration (Petition) asking the FCC to reconsider the grant of a license to the new FM translator station. The Commission found that the station apparently violated its rules and proposed a $12,500 fine.

In April 2018, the licensee applied for a permit to construct a new FM translator, proposing to use a directional antenna mounted 150 meters above ground level. The FCC granted a construction permit in May 2018, requiring completion by May 2021. The licensee completed construction in time and filed a license application in August 2019 certifying that the translator had been constructed as authorized. Fifteen days after the FCC issued a public notice for the application, the license was granted in September 2019. However, the Petition was filed in October, alleging that material in the license application was false, and that the translator had been constructed with an omnidirectional (rather than directional) antenna, and mounted at a height of 145 meters above ground level (5 meters lower than authorized).

In opposing the Petition, the licensee acknowledged it used an omnidirectional antenna for approximately two months in 2019, explaining that the authorized directional antenna had arrived damaged, and it was eager to commence operations. The licensee explained that it operated the facilities at a much lower power level than authorized to minimize any potential for interference from using an omnidirectional antenna. It further explained that it had no intent to deceive but did not know the significance of the antenna substitution, so it did not mention this to legal counsel who prepared the license application. In October 2019, the translator began operating with the repaired authorized antenna, but it was mounted at 146.6 meters. In December 2019, the Licensee filed an application for a minor modification, proposing to operate the antenna 143 meters above ground level and changing the translator’s community of license. The Commission granted a construction permit for this modification, and an application to license the modified facilities was filed in January 2020. The license was granted in February 2020.

Among other requirements, petitioners filing a petition for reconsideration must have either participated in the initial proceeding or show good reason why it was not possible for them to have participated earlier. In this case, the FCC found that the Petitioner had ample time to file an informal objection during the 15-day period that the license application was on public notice before it was granted. As such, the Commission dismissed the Petition as unacceptable under § 1.106(b) of its Rules. Nevertheless, the FCC acknowledged the licensee’s admissions and considered on its own motion an appropriate response.

Section 74.1251(b)(2) requires FM translator licensees to request and receive permission prior to making any changes to their antenna systems. Section 1.17(a)(1) of the FCC’s Rules prohibits individuals from intentionally providing incorrect “material factual information” or intentionally omitting “material information.” The Commission explained that “intent to deceive” is an essential element of “misrepresentation” and “lack of candor,” and thus submitting inaccurate information due to carelessness or gross negligence is not misrepresentation or lack of candor. However, Section 1.17(a)(2) of the Rules prohibits submission of incorrect information, even without deceptive intent.

The FCC found no evidence of deceptive intent and thus no misrepresentation or lack of candor. However, the FCC determined that the licensee acted negligently when it failed to tell its legal counsel that the antenna was not constructed as authorized and when it failed to review the application thoroughly before filing. The FCC found that the licensee apparently violated Section 1.17(a)(2) of the Rules because it had no reasonable basis to certify that the translator was constructed as authorized, Section 74.1251(b) by failing to file an application to alter an antenna system, and Section 74.1251(b)(2) by constructing and operating with an unauthorized antenna at an unauthorized height.

Section 1.80(b) of the Rules sets a base fine of $3,000 for failure to file a required form and $10,000 for construction or operation without an instrument of authorization. The guidelines do not list a base fine amount for a false certification. Thus, the FCC considers the relevant statutory factors in Section 503(b)(2)(E) of the Communications Act, including “the nature, circumstances, extent and gravity of the violation, and with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.” In previous cases of false certifications by secondary stations without intent to deceive, the FCC has found a $5,000 fine appropriate. Taking into consideration all relevant factors, especially that the translator is providing secondary service, the FCC decided to reduce the combined fine here for failing to file an application and unauthorized operation from $13,000 ($3,000 + $10,000 base fines) to $7,500. With respect to false certification, the FCC proposed an additional fine of $5,000, consistent with the prior cases involving secondary stations. Thus, the total proposed fine is $12,500 ($7,500 + $5,000). Continue reading →

Published on: August 8, 2023

FCC Moves to Prevent Unwanted and Illegal Phone Calls and Texts

By Adam J. Sandler

The Federal Trade Commission (FTC) and Federal Communications Commission (FCC) are partnering in “Operation Stop Scam Calls,” a multijurisdictional effort to stop illegal telemarketing calls.
Recent actions by the FCC expand robocall prevention efforts and step up enforcement of its rules.
Additionally, a Notice of Proposed Rulemaking seeks to clarify consumer consent requirements for receiving robocalls and text messages.

With an estimated four billion robocalls per month, it’s not surprising that unwanted and illegal robocalls are the FCC’s top consumer-protection priority, generating about 119,000 complaints in 2022 alone. Unwanted and illegal text messages—estimated at 225 billion in 2022—are increasingly prevalent and uniquely harmful to consumers by including legitimate-looking links designed to fool the recipient into providing personal and financial information. All of us experience on a daily basis the awkwardness of receiving a phone call or text message from an unknown telephone number and deciding whether to answer or reply. Unfortunately, some of these calls and texts are from bad actors and will result in fraud costing consumers billions of dollars.

Recent actions by the FCC are designed to decrease the number of unwanted and illegal phone calls and text messages that reach you. Below is a summary of recent developments in robocall and robotext regulation and open FCC proceedings that seek to eliminate harmful calls and texts. The FCC’s authority to regulate robocalls and robotexts stems from the Telephone Consumer Protection Act (TCPA), enacted in 1991, the Truth in Caller ID Act of 2009, enacted in 2010, and the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), enacted in 2019. The Federal Trade Commission (FTC), through its authority under the Federal Trade Commission Act and Telemarketing and Consumer Fraud and Abuse Prevention Act, also plays a role in robocall reduction and enforcement. The FTC administers the National Do Not Call Registry and has brought more than 150 enforcement actions for “Do Not Call,” robocall and spoofed caller ID violations. The FTC and FCC are partners in “Operation Stop Scam Calls”—a multi-agency, multi-jurisdictional effort by federal and state law enforcement entities to stop illegal telemarketing calls.

As part of its most recent robocall prevention efforts, the FCC has acted to, among other things:

Require intermediate voice service providers to authenticate calls that are not authenticated by originating voice service providers;
Require all voice service providers to take reasonable steps to mitigate illegal robocalls and file their mitigation plans in the Robocall Mitigation Database by a to-be-announced date ;
Give its Enforcement Bureau enhanced tools to penalize bad actors, including the ability to revoke section 214 and other authorizations, licenses and certifications of repeat offenders and expel providers that commit certain rule violations from the Robocall Mitigation Database on an expedited timeline;
Adopt a maximum $23,727 per-call penalty for failure to block illegal calls;
Established STIR/SHAKEN obligations of satellite providers (STIR/SHAKEN is a framework adopted by the FCC and implemented by voice service providers to authenticate an originating caller’s right to use the telephone number displayed on caller ID and is meant to protect against spoofed robocalls);
Expand to all voice service providers its requirements to respond to call traceback requests within 24 hours and block illegal traffic when notified by the FCC; and
Expand to all voice service providers the “know your upstream provider” requirement.

Published on: July 27, 2023

FCC Enforcement Monitor July 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Foreign Ownership Violation by Telecommunications Provider Leads to $50,000 Penalty and Four-Year Compliance Plan
Arizona LPFM Station Hit with $20,000 Penalty and $41,500 Suspended Penalty for Underwriting Violations
Unauthorized Station Transfers Result in $8,000 Consent Decree

Telecommunications Provider to Pay $50,000 and Implement Four-Year Compliance Plan After Foreign Ownership Violations

A Guam-based telecommunications provider (Telecom Provider) settled an investigation by the Federal Communications Commission (FCC) into its ownership structure by entering into a consent decree that requires a $50,000 payment to the government and implementation of a 48-month compliance plan. The Telecom Provider holds domestic and international Section 214 authorizations, 84 wireless licenses, three submarine cable licenses, and an earth station satellite license. The FCC’s investigation concerned the Telecom Provider’s ownership, which includes two foreign corporations and a foreign government’s finance ministry.

Section 310(b)(4) of the Communications Act of 1934, as amended (Act), places a 25 percent limit on ownership by foreign individuals, corporations, and governments in U.S.-organized entities controlling common carrier licensees. Under the Act, the FCC may permit higher levels of foreign ownership of an FCC licensee if it determines it is not contrary to the public interest. Since 2013, FCC approval has also been required for any foreign individual or entity not previously approved by the FCC to acquire more than a five percent equity or voting interest in the entity. These public interest determinations by the FCC incorporate input from a federal Executive Branch review of national security, law enforcement, foreign policy, and trade policy concerns conducted by a multi-agency group known as Team Telecom.

In 2015, the FCC granted an application that allowed the Telecom Provider to have 100 percent foreign ownership consisting of a parent entity two steps up in the ownership chain (Indirect Parent Entity) (owning up to 65.15 percent of the equity and voting interests) and the finance ministry (owning up to 26.95 percent of the equity interests and 41.53 percent of the voting interests). Five years later, the Indirect Parent Entity commenced a tender offer for outstanding shares in the parent entity directly above the telecom provider (Direct Parent Entity). Two months later, the Indirect Parent Entity acquired the tendered shares, which increased its indirect ownership interests in the Telecom Provider to 91.46 percent. At the end of 2020, the Indirect Parent Entity also acquired all shares of the Direct Parent Entity’s common stock held by the remaining minority shareholders, resulting in it owning 100 percent of the equity and voting interests of the Telecom Provider. These transactions led to the finance ministry having an indirect ownership interest in the Telecom Provider (held through Indirect Parent Entity) of 33.93 percent equity and voting. The result was higher levels of foreign ownership in the Telecom Provider than had previously been approved by the FCC.

The Telecom Provider attempted to correct the problem by filing a Petition for Declaratory Ruling seeking approval for the Indirect Parent Entity and finance ministry to exceed their previously approved foreign ownership limits. In late 2021, the International Bureau granted the Petition, but the FCC’s Enforcement Bureau pursued the prior foreign ownership violation, resulting in a Consent Decree with the Telecom Provider.

In addition to paying a $50,000 civil penalty for exceeding the foreign ownership levels approved by the FCC, the Telecom Provider must implement a plan to ensure compliance with the terms of the Consent Decree, including developing a compliance manual, administering employee compliance training, and submitting compliance reports to the Commission for four years regarding foreign ownership compliance. During that time, the Telecom Provider must also report instances of noncompliance with the FCC’s foreign ownership rules and the terms of the Consent Decree within 15 days of discovering them.

Violations of Noncommercial Broadcast Underwriting Laws Result in $20,000 Penalty and a $41,500 Suspended Penalty for Low Power FM Station

The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Arizona LPFM station to resolve an investigation into violations of the FCC’s rules regarding underwriting. Under the Consent Decree, the licensee agreed to implement a compliance plan and pay a $20,000 civil penalty, with a suspended civil penalty of $41,500 to be levied in the event of default. Continue reading →

Published on: June 26, 2023

FCC Enforcement Monitor June 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Sports Entertainment Company’s Malfunctioning Microphone Interferes with Public Safety Communications
Florida Radio Application Dismissed Over Disclosure Issues
Late Issues/Programs Lists and Children’s Television Programming Reports Causes $18,000 Proposed Fine for Maryland Television Station

Notice of Violation Issued After Malfunctioning Wireless Microphone Transmits on Wrong Frequency

A sports entertainment company with dozens of locations across the country received a Notice of Violation from the FCC for causing interference to a city’s licensed wireless operations. FCC field agents investigating interference complaints using direction finding techniques located “drifting” radio emissions in the area and determined that the source was a malfunctioning wireless microphone used by the sports entertainment company in its local operations.

The microphone was causing interference to the city’s 800 MHz communication system, and as noted by the Enforcement Bureau, the sports entertainment company did not hold a license to operate the microphone on that frequency. The city used the 800 MHz facilities for public safety operations, making the interference particularly concerning.

Under the Notice of Violation, the company must respond within twenty days and (1) fully explain each violation, including all relevant surrounding facts and circumstances, (2) include a statement of the specific action(s) taken to correct each violation and prevent recurrence, and (3) include a timeline for completion of any pending corrective action(s). The Notice of Violation also indicated the possibility of further enforcement action “to ensure compliance.”

Applicant Loses Chance at Noncommercial Radio Station After Failing to Make Required Disclosures

An applicant seeking to build a new noncommercial educational (NCE) station in Florida saw its application dismissed after a petition to deny raised disclosure issues with it. The company filed the application in November 2021 during the most recent filing window for new NCE applications. Applicants with applications deemed to be mutually exclusive (MX) are given an opportunity to work together to resolve technical conflicts through settlement arrangements. If the conflicts are not resolved, the FCC compares and analyzes the competing applications and tentatively selects a winning application.

The FCC’s comparative analysis of MX NCE applications generally consists of three main components. When NCE FM applicants in an MX group propose service to different communities, the FCC performs a threshold fair distribution analysis under Section 307(b) of the Communications Act of 1934 to determine if one of the applicants is proposing service to an underserved area. Application conflicts that are not resolved under this “fair distribution” analysis are next compared by the FCC under an NCE point system, which is a simplified, “paper hearing” process. If necessary, the FCC then makes a tie-breaker determination, based on applicant-provided data and certifications. Continue reading →

Published on: May 25, 2023

FCC Enforcement Monitor May 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

LPFM Station Fined $15,000 for Airing Commercial Advertisements
FCC Issues Notices to the Landowners of Sixteen Pirate Radio Sites
Telecommunications Carrier Pays $227,200 To Resolve 911 Outage Investigation

Published on: April 26, 2023

FCC Enforcement Monitor April 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Connecticut Radio Station Risks Losing License Due to Unpaid Regulatory Fees
TV Translator Licensee Faces $16,500 Fine for Late License Renewal Applications
Voice Call Gateway Provider Accused of Flouting Call Blocking Rules, Faces Further Enforcement Action

Published on: February 28, 2023

FCC Enforcement Monitor February 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

Failure to File License Renewal Application Results in Cancelled License
Call Provider Receives Cease-and-Desist Letter From FCC for Apparently Transmitting Illegal Robocalls
New York Broadcaster Agrees to Consent Decree for Violations Relating to the Public Inspection File

Published on: January 30, 2023

FCC Enforcement Monitor January 2023

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

TV Network Draws Proposed Fine of $504,000 for Transmitting False EAS Tones
FCC Cites Equipment Supplier for Marketing Unauthorized Devices
FCC Proposes $62 Million Penalty Against Wireless Provider for Excessive Connected Devices Reimbursement Claims

Published on: January 10, 2023

FCC Adopts Rules Requiring Broadband Providers to Display Point-of-Sale Labels and Proposes New Rules Promoting Equal Access to Broadband Services

By Elizabeth Craig

Broadband Providers Required to Display Point of Sale Labels

On November 17, 2022, the Federal Communications Commission (FCC) released a Report and Order (Order) adopting rules requiring broadband internet service providers (ISPs or providers) to prominently display labels disclosing information about broadband prices, rates, data allowances and broadband speeds. The FCC has not yet announced the effective date for ISPs to comply. The Order also includes a Further Notice of Proposed Rulemaking (FNPRM) in which the FCC seeks comment on the format and content of the label, as well as potential future changes. The comment deadline has been extended to February 16, 2023; reply comments are due by March 16, 2023.

Background

In November 2021, President Biden signed the Infrastructure Investment and Jobs Act (Infrastructure Act) into law. Among other things, the Infrastructure Act directed the FCC to create regulations requiring the display of broadband consumer labels that disclose information regarding broadband internet service plans. The label must also “include information regarding whether the offered price is an introductory rate and, if so, the price the consumer will be required to pay following the introductory period.” The FCC was also required to hold public hearings to evaluate (1) how consumers evaluate broadband internet access service plans; and (2) whether disclosures regarding broadband service plans are available and effective.

In response, the FCC released a Notice of Proposed Rulemaking (NPRM) in January 2022 in which it proposed requiring ISPs to disclose information to consumers by displaying labels at the point of sale. The FCC recommended basing the labels on the voluntary labels it previously approved in 2016. In the NPRM, the FCC asked whether broadband services, and consumers’ use of such services, have changed enough to require modifications to the labels.

Consistent with the Infrastructure Act’s mandate, the FCC held public hearings to gather feedback on the content, format and location of the labels. The FCC asked whether the label should vary depending on the consumer’s interaction with the provider, e.g., in person at a store, on the phone or online. Feedback from dozens of comments showed that consumers can be confused by the pricing, terminology and complexity of internet service plans, and most commenters asked the FCC to update the 2016 labels to better help consumers comparison shop for broadband services.

The Label

The FCC’s Order adopted a new, single version of the label (for both fixed and mobile broadband service offerings) and requires providers to display, at the point of sale, a label containing information regarding the provider’s service offerings, prices, introductory rates, data allowances, broadband speeds and whether the provider participates in the FCC’s Affordable Connectivity Program (ACP). The Order defines the format in which the label must appear and the display location. It must also be accessible for people with disabilities and should appear in machine-readable format.

Below is an image of the label template from the FCC’s Order and details outlining the content, formatting and display location requirements:

Published on: December 29, 2022

FCC Enforcement Monitor December 2022

By Scott R. Flick, Elizabeth Craig and Adam J. Sandler