Category Archives: Regulatory Alerts

Click to Cancel

The Federal Trade Commission voted on May 9 to delay the implementation of click to cancel until July 19. This was originally scheduled to be implemented last week. This blog is a heads up for any ISPs that takes orders online that you are required to offer online process to allow customers to disconnect service that is as easy as the process to buy online. This new rule has become labeled as click to cancel.

More specifically, the FTC rules include a negative option rule that says that a business can’t require customers who want to cancel to go through a different process than the one they used to buy a service. If a customer bought a service or an upgrade online, they must be able to cancel that service online.

This means an ISP can’t do things like making customers contact customer service during limited hours or endure lengthy phone menus to cancel. The new rules imply that an ISP might not be able to divert customers to a win-back process during the cancellation process, but could perhaps contact customers later.

The new rules also require a company to provide information about its cancellation policy before collecting customer payment information – online ordering systems should be modified to provide this information before asking for credit card or bank debit details.

The original rules were adopted by the FTC in 2024. Since taking office, President Trump has controversially fired two democratic FTC Commissioners, but the remaining three Republican Commissioners voted to continue the implementation of this process with the slight delay to give companies more time. The Commissioners recognized pleas from companies of the complexity of implementing the new process.

Another part of the new rules is that a company that sells online must be truthful and clear with customers about what they are buying. For instance, if a customer is subscribing to a promotional product, the instructions must make it clear how long the low price lasts. A seller needs to be able to demonstrate that buyers know what they are agreeing to, which means not putting important facts into fine print. ISPs are already subject to broadband labels required by the FCC, but this new requirement might require clearer language in the description of products and not just in the label.

These new rules might lead some ISPs to consider not offering sales online. However, even if you don’t sell online, the cancellation process can’t be any more complicated than the process to buy a service.

FCC to Stress CALEA

FCC Chairwoman Jessica Rosenworcel circulated a draft Declaratory Ruling within the FCC that will enhance and enforce the Communications Assistance for Law Enforcement Act (“CALEA”).  This law requires carriers to secure their networks from unlawful access or interception of communications, including cybersecurity attacks. Chairman Rosenworcel also released a notice to carriers to ask ISPs to strengthen their cybersecurity measures as a result of the recent evidence that China has infiltrated ISPs. The proposed Declaratory Ruling would require carriers to submit an annual certification to the FCC showing they have created, updated, and implemented a cybersecurity risk management plan.

CALEA has been in place since 1994 and originally provided a mechanism for law enforcement to conduct lawful wiretapping of ISP networks. The law has often been referred to as a government backdoor into telecommunications networks. On its surface, CALEA requires a subpoena from the FBI to wiretap an ISP end-user customer, although there are those in the government who argue that the law also allows for warrantless searches in some situations and even allows for mass surveillance of a communications network.

CALEA was originally intended to provide a way for the government to surveil digital phone calls – a new technology in the early 1990s. The law has been expanded over time to include VoIP, texting, and all broadband traffic.

This warning puts all ISPs on notice that they must be CALEA compliant. CALEA compliance requires two steps. First an ISP must have a CALEA manual on file at the FBI that describes the specific method that is available for law enforcement to wiretap them.

Carriers can allow wiretapping in one of two ways. First, it can own gear and software that will allow it to respond to a law enforcement wiretap in real-time. Very few ISPs have this capability for reaching all customers. The alternative is to use a mediation device that will be installed in the network that will gather and format the information the government is seeking. There are vendors who will contract with an ISP to have this gear in place within 24 hours.

I know there are many small ISPs who never created a CALEA manual. I also suspect that there are companies that act as ISPs, such as large corporate or government networks that do their own connections to the web without an intermediate ISP. For CALEA purposes, I think anybody that directly controls a block of IP addresses and who sends and receives traffic directly from the web should be CALEA compliant.

I also know a lot of ISPs have not updated their CALEA manuals at the FBI. They may have filed the manual decades ago and forgotten they even have a manual. The ISP might have changed technologies and added markets and not identified these changes to the FBI. Anybody with an existing CALEA manual should look at it and update it as needed.

I don’t normally peddle CCG service in these blogs, but the FCC and the government as a whole are about to get extremely serious about the Chinese hack of our telecommunications networks. Please contact me if you need to create or update a CALEA manual to make sure your company is compliant. The Declaratory Ruling is going to be approved soon by the current FCC or the next one, and you should start now to be able to say that you are compliant with the CALEA portion of the annual cybersecurity attestation.

Community Action for the 5G Plan

I took the unusual step of publish two blogs today. The FCC announced the 5G Fund to improve cellular broadband in rural areas – and this second blog talks about several actions communities might want to consider immediately if your area needs better cellular coverage.

The FCC announced it will move forward with the 5G Plan for Rural America. This new subsidy will provide $9 billion to improve rural cellular coverage. I know in working throughout rural America that poor cellular coverage is often a worse problem that broadband coverage.

The FCC is convinced that the current cellular coverage maps are adequate to define the areas that deserve the new subsidy. In the counties I’ve been working in this does not seem to be the case, and the FCC cellular maps often seem to be overstating speed, similar to broadband speed claims. This was bolstered by a recent letter to the FCC from the Rural Wireless Association that claims that the FCC cellular maps are poor.

Since the FCC seems determined to move forward with the current maps and seems to be on a fast track to initiate the 5G plan,  there should be a sense of urgency in any County that thinks it needs better cellular coverage. The following steps should be considered immediately because it is possible that the FCC could launch the new 5G Fund by the end of the year.

First is to look at the FCC cellular map. This is part of the same map system used to show broadband coverage. Type in any address in a county, and a detailed map will appear. Choose the Mobile Broadband button at the top and you’ll be able to see the claimed cellular coverage at any address. The 5G Fund will bring better cellular coverage to locations where there is no 5G today (just 4G LTE) or where 5G speeds are claimed to be slower than 7/1 Mbps. You can look at the parts of your county where you believe cellular coverage is poor and see if the FCC map agrees with your local knowledge.

The 5G Fund subsidy will only be awarded to areas where the FCC map shows that no carrier is offering 5G with speeds of at least 7/1 Mbps. If even only one carrier meets that criteria, the area will not get funding. You might see some cellular carriers you don’t recognize in the FCC map like Project Genesis (which is Dish) or local cellular carriers.

A next step might be to dash off quick comments to the FCC about the 5G Fund timeline. Surprisingly, the FCC is not planning to have a map challenge period for counties to contest the cellular map coverage. Comments are due to the FCC by September 10. If nothing else, tell the FCC they should include some time for a map challenge. The FCC has been talking about launching this fund for four years, and it seems irresponsible to suddenly rush without giving local governments a chance to verify and challenge the FCC cellular maps.

There was a comment made in this docket that said local governments have had plenty of time to dispute the maps since the new FCC maps have been out for several years. However, all of the counties I have been working with have been concentrating on the FCC broadband maps. Almost nobody has looked hard at claimed cellular speeds – until this order came out, nobody knew what to look for on the maps. Making a comment in an FCC docket is relatively easy to do. The first thing on the form is to ask for the proceeding, which in this case is 20-32 Establishing a 5G Fund for Rural America.

Finally, if the FCC maps overstate cellular coverage in your area you need to get folks out taking cellular speed tests using the FCC app in the areas where you think coverage is poor. To be of any use for the 5G Fund the speed tests probably need to be done this month.

Speed tests can only be done using the FCC’s own speed test app. The app is available at the Google Play Store or Apple App store. Speed tests only count if they area taken outside or in a moving vehicle – indoor tests or tests on a WiFi network don’t county. For the 5G Fund, you want to take speed tests from a stationary point, which means pulling over on the side of the road. Tests must be taken between 6:00 AM and 10:00 PM.

You need to have phones subscribed to each carriers you want to dispute. If Dish is the only carrier claiming coverage in a rural area, the only tests that mean anything must be conducted from a Dish phone. Make sure when using the app that you are filing a challenge – it’s possible to use the app to check speeds without the results being sent to the FCC.

Finally, the FCC considers cellular map challenges as a crowd-sourced process. That means a lot of tests are required from each carrier in each disputed area. Taking a handful of tests won’t register with the FCC. Unfortunately, we don’t know how many tests are enough. I have no idea what happens if you try to test a carrier where there is no signal since your phone won’t be connected to broadband.

 

FCC to Tackle Data Breaches

The FCC has a new Notice of Proposed Rulemaking (NPRM) concerning an update of customer proprietary network information (CPNI) rules. The FCC wants to strengthen the rules concerning notifying customers of a data breach.

CPNI rules are codified at the FCC from Section 222(a) of the Telecommunications Act of 1996. CPNI rules are intended to protect customer data. For those that haven’t read CPNI rules for a while, Section 222(a) rules state:

Except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunications service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories.

In plain English, this means that every telecom carrier must take steps to protect customer data that is collected as part of providing a telecommunications service.

There have been a number of well-known data breaches in the industry, and the FCC is proposing to tighten the rules related to notifying customers about data breaches. For example, the current rules give carriers seven days to notify customers of breaches of their personal data, and the NPRM will propose to drastically shorten that time frame. The FCC will also be proposing that carriers must disclose inadvertent breaches of data that were caused by the carrier, as opposed to a malicious outside party. Finally, carriers will be required to report all data breaches to the FCC, the FBI, and the U.S. Secret Service.

For those of you not familiar with the NPRM process, the FCC uses this method to notify the industry of proposed changes in regulations. An NPRM spells out the specific proposed rule changes by showing the proposed change in FCC rules. The FCC then invites comments on the proposed rule changes and often asks additional questions to get feedback. The FCC sometimes adopts the NPRM as proposed but often modifies the proposed rules based upon the comments received.

It doesn’t seem likely that the FCC will allow an opt-out of these rule changes for small carriers and these rules are likely to apply to everybody, like the current CPNI rules.

As is usual these days, there is a regulatory twist. As it sits today, the FCC no longer regulates broadband since it is not classified as a telecommunications service. The Section 222 rules only apply to telecommunications carriers and the new rules might only apply to carriers that offer traditional telephone service, cellular services, or anything else remaining under FCC jurisdiction. An ISP that only provides broadband might be exempt from CPNI rules – although you could face an expensive legal fight if the FCC sees it otherwise. An awful lot of our regulatory rules are sitting in the gray areas these days.

However, if the FCC eventually brings broadband back into the regulatory fold, as is expected, then these rules would apply to all ISPs selling broadband services.

Regulatory Alert – FCC Triples Regulatory Fines

FCC_New_LogoYou should be aware that the FCC recently adopted a new policy that automatically triples fines for violations of payment rules to the Universal Service Fund, the Telecommunications Relay Service Fund, for local number portability  (LNP), for the North American Numbering Plan and for other federal regulatory fee programs.

The largest telecom organizations like USTelecom, CTIA, NCTA and CompTel have filed a joint petition asking the Federal Communications Commission (FCC) to reconsider a new policy. In this filing these companies say that the FCC should have opened a proceeding to investigate the matter rather than arbitrarily trebling penalties.

So be aware that this is even more of incentive to be a good citizen and take care in filing paperwork and paying fees to these various federal programs.

 

Changes to the E-rate Program

Indianola_High_SchoolThe FCC recently revised the rules for the E-Rate program which provides subsidies for communications needs at schools and libraries. They made a lot of changes to the program and the rules for filing this year are significantly different than what you might have done in the past. I’ve made a list below of the changes that will most affect carriers and you should become familiar with the revised rules if you participate in the program. Here are some of the key changes to the program from a carrier perspective:

  • Extra Funding. There is an additional $1 billion per year set aside for the next two years for what the FCC has called Internal Connections. This means money to bring high-speed Internet from the wiring closet to the rest of the school. This might be new wiring, WiFi or other technologies that distribute high-speed Internet within a school.
  • Last Mile Connections. It’s also possible to get funding for what they call WAN / Last-Mile connectivity. This would be fiber built to connect a school to a larger network such as one for a whole school district.
  • Stressing High-Speed Connections. The target set by the FCC is that a school should have at least 100 Mbps per 1,000 students and staff in the short run and 1 Gbps access in the long run. It is going to be harder to fund older slower connections even for very few poor schools. As a carrier you need to be planning on how to get connections that meet these requirements to schools if you want to maintain E-rate funding.
  • Things No Longer Funded. One of the ways the FCC will fund the expanded emphasis on higher bandwidth is by not funding other items. The fund is going to focus entirely for the next few years on funding things that promote high-speed connections, so they will no longer fund “Circuit Cards/Components; Interfaces, Gateways, Antennas; Servers; Software; Storage Devices; Telephone Components, Video Components, as well as voice over IP or video over IP components, and the components, such as virtual private networks, that are listed under Data Protection other than firewalls and uninterruptible power supply/battery backup. The FCC will also eliminate E-rate support for e-mail, web hosting, and voicemail beginning in funding year 2015”.
  • Combining Schools and Libraries. For the first time it will be possible to combine the funding for a school and library that are served by the same connection / network.
  • Eliminating Competitive Bidding for Low-Price Bandwidth. A school does not need to go to competitive bid if they can find a connection of at least 100 Mbps that costs $3,600 per year (or $300 per month) or less.
  • Eliminating a Technology Plan. There is no Technology Plan now required for applying for Internal Connections (in-school wiring) or for providing WAN connections.
  • Simplifying Multi-Year Contracts. Subsequent years after the first year of a multi-year contract will require less paperwork and have a streamlined filing process.
  • Simplifying the Discount Calculation. The discount can now be calculated on a per school-district basis and not per school within the district. The FCC adopts the definition from the Census that defines urban areas to be the densely settled core of census tracts or blocks that met minimum population density requirements (50,000 people or more), along with adjacent territories of at least 2,5000 people that link to the densely settled core. “Rural” encompasses all population, housing, and territory not included within an urban area. Any school district or library system that has a majority of schools or libraries in a rural area that meets the statutory definition of eligibility for E-rate support will qualify for the additional rural discount.
  • Requiring Electronic Filings. All filings will need to be electronic, phased in by 2017.

These are a lot of changes to a fairly complex filing process. CCG can help you navigate through these changes. If you have questions or need assistance please contact Terri Firestein of CCG at tfireccg@myactv.net.

Regulatory Alert: Rural Call Completion

Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

The FCC took action on October 28 to address a growing problem of calls that are not completed to rural areas. The Commission adopted new rules that are aimed to remedy a growing problem of calls that are not completed.

The FCC noted that the situation was “serious and unacceptable” and that every call that is placed should be terminated. The FCC note that “Whatever the reason, the consequences of failed calls can be life-threatening, costly, and frustrating. Rural businesses have reported losing customers who couldn’t call in orders, while families attempting to contact elderly relatives have worried when they hear a ring – but no one picks up on the other end because the call never actually went through.”

The FCC surmises several reasons for uncompleted calls:

  • They think that some providers are not routing to rural areas to avoid higher than average terminating access charge rates. The access rates in rural areas are still much higher than rates for major metropolitan areas, which reflects the higher cost of doing business in rural areas. Terminating rates can still be as much as two cents per minutes higher. However, the FCC has always said that it insists that every call must go through, and if they ever got evidence of a specific carrier boycotting an area due to high rates I suspect they would levy high fines.
  • They think that much of the problem is due to the fact that calls can be routed through multiple carriers. They note that the best industry practice is to limit to two the number of intermediate carriers involved in routing a call. I know there are a lot of new carriers in the market today, such as multiple new companies marketing voice services like IP Centrex who search for the lowest cost way to route calls. One has to suspect that the long distance carriers beneath some of these carriers have gotten very creative in terms of routing calls to save costs.
  • Some carriers have been sending a ring tone to the calling party before the call has actually been completed. One has to suspect that this is done so that the caller can’t hear all of the intermediate switching going on to get the call completed. The problem with doing this is that the caller will hang up after a few unanswered rings, often before the call has even been completed.

The FCC took several concrete steps to fix the problem. These new rules will be effective in a few weeks once the final rules are published. The new rules are:

  • False audible ringing is prohibited, meaning that a telephone provider cannot send a ringtone to the caller until the call has actually been answered.
  • Carriers with over 100,000 voice lines, and who are the carrier that determines how calls are routed must collect and retain calling data for a six month period.
  • Carriers who can certify that they follow best industry practices, such as not routing calls through more than two intermediate carriers, will be able to get a waiver for some or all of the storage and reporting requirements.
  • Carriers who can demonstrate that they have all of the mechanisms in place to complete rural calls can also ask for a waiver from the storage and reporting requirements.

Regulatory Alert: FCC Reminds ACS Providers (Advanced Communications Services) of Filing for CVAA Compliance

Seal of the United States Federal Communicatio...

The FCC recently issued a public notice reminding Advanced Communications Providers (ACS) and equipment manufacturers that they need to provide evidence that they are complying with the Twenty First Century Communications and Video Accessibility Act (CVAA). The FCC is now implementing Section 255 of the Telecommunications Act of 1996 that requires telecom products and equipment be accessible by people with disabilities.

The FCC defines an ACS provider in Section 3(1) of the Act to mean a carrier that provides one of the following: (A) interconnected VoIP service; (B) non-interconnected VoIP service; (C) electronic messaging service; and (D) interoperable video conferencing service. The FCC also defines advanced communications services providers to include all entities that offer advanced communications services in or affecting interstate commerce, including resellers and aggregators. Such providers include entities that provide advanced communications services over their own networks, as well as providers of applications or services accessed (i.e., downloaded and run) by users over other service providers’ networks.

The CVAA law was enacted in 2010 and is aimed to ensure that people with disabilities have access to advanced communications services. This requirement by the FCC is somewhat unusual in that it applies to telecom providers who are otherwise largely unregulated.

And there are a lot of nuances to be in compliance:

  • There must be a filing done for each corporate entity that provides ACS services and you can’t just designate somebody at the parent company to cover all of your subsidiaries.
  • You must provide an affidavit of compliance by a company officer.
  • It must be filed electronically.

The original deadline for these filings was April 1, but we believe a lot of entities who should have filed did not. If you provide any form of VoIP you need to comply with these rules or face eventual fines.

The filing requires the following:

  • A description of the effort the company will undertake to discuss your services with customers with disabilities.
  • A description of the features and other ways that your products will be made accessible to customers with disabilities.
  • A description of how people with disabilities would most likely be able to use your products.

So, if you provide VoIP – even on a resale basis – you need to make this filing.

If you want to know more about the specific filing requirements, or if you want assistance in making this filing contact Terri Firestein at (301) 788-6889.

Regulatory Alert: Cap on USF Fee Charged to End Users

Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

In a footnote to WC Docket No. 13-76, adopted and released March 26, 2013, In the Matter of July 2, 2013 Annual Access Charge Tariff Filings (establishes procedures for the 2013 filing of annual access charge tariffs and Tariff Review Plans) the FCC reminds carriers of the requirement to apply FCC rule 47 C.F.R. §54.712 where applicable.

The footnote references 47 C.F.R. §54.712 :

Contributor recovery of universal service costs from end users.

(a) Federal universal service contribution costs may be recovered through interstate telecommunications-related charges to end users. If a contributor chooses to recover its federal universal service contribution costs through a line item on a customer’s bill the amount of the federal universal service line-item charge may not exceed the interstate telecommunications portion of that customer’s bill times the relevant contribution factor.

We believe that some contributors to federal USF that want to recover their contribution costs through a line item on a customer’s bill are going to have a problem complying with this Rule. We can think of two circumstances that may place a carrier in violation of this Rule:

  1. If a carrier has tariffed a Subscriber Line Charge (SLC) in their FCC interstate access tariff and bills it to their end users monthly that revenue is considered Interstate revenue. Carriers should ensure that the amount they are charging customers as a USF contribution recovery fee does not exceed the tariffed SLC charge times the current USF contribution factor (17%). The current 17% relevant contribution factor is higher than it was in past years so carriers should look at this again as the contribution factor changes.

For example, if your SLC charge is $4.00, then the most you could charge for a USF fee to end users based upon that amount is $4.00 X 17% = $0.68. So do the math and compare your USF recovery fee to 17% of your SLC charge. If the USF recovery fee exceeds that amount you have a problem, which will be discussed below.

  1. Some CLECs opt to not tariff or bill its end users a SLC charge. Until recently, USAC required that these CLECs to impute a SLC charge for USF 499 reporting purposes and to report the revenue as 100% interstate revenue.

However, recently the FCC informed USAC that they could no longer require CLECs to impute the SLC and report it as interstate revenue. This means that CLECs that do not have a SLC charge in their access tariff, and who do not expressly charge a SLC on the bill do not have any customer revenue that can be explicitly assigned to the interstate jurisdiction absent measuring interstate long distance usage. In such a case, the CLEC can’t bill a USF recovery fee to a customer who doesn’t make any interstate long distance calls. And they can only charge a USF recovery fee up to 17% of whatever a customer does spend for interstate long distance calling.

This creates a dilemma for carriers who find themselves in either of the two circumstances mentioned above. How does one bill the USF fee to customers since every one of them has a different amount of Interstate usage?

One thing that is important to remember is that the FCC does not mandate that a carrier bill its end-user customers a USF contribution recovery fee. It is optional for a carrier to recover its USF contribution from its end users. In other words, a carrier may treat its USF contribution as an expense.

We believe this footnote was included in the March Order for a reason, that the FCC suspects there are carriers who are violating the rule. So you can expect USAC to be auditing contribution recovery fee calculations in the near future.

So, if you are in violation of this rule, what are possible solutions for getting back into compliance?

  1. Decide to not bill the USF surcharge to your customers and pay USAC out of your own pocket (not recommended).
  2. If you tariff and bill a SLC charge today you can increase it to make it large enough to cover the USF contribution (assuming your SLC is not capped).
  3. If you don’t tariff and bill a SLC consider putting one in your access tariff. This would require breaking it out on the end user bill as a separate line item. However, note that by doing this you would be increasing the amount of your USF contribution paid to USAC if you are a contributor. Or, if you are not a contributor today it could make you into one.
  4. Increase your local rates by an amount that would cover the USF contribution. This is probably the best solution, except for possible competitive consequences. However, if you discontinue the USF fee and raise rates by the same amount you will not be increasing the customers’ bills overall.
  5. Pass the USF fee onto only those customers who have enough interstate long distance usage to cover the USF fee. The trouble with this idea is that it is hard to do correctly and it also means you would be charging the largest USF fee to those who make the most long distance. That is probably not a great idea from a competitive perspective.

We recommend you review the USF fee you are billing customers and ensure it passes the FCC “test”. If you need help to do this review please contact Terri Firestein at (301) 788-6889.

Regulatory Alert: FCC Acts on Numbering Issues

Seal of the United States Federal Communicatio...

Seal of the United States Federal Communications Commission. (Photo credit: Wikipedia)

At today’s FCC Open Meeting the FCC approved the release of a Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI) on expanding direct access to telephone numbers for wholly VoIP providers like Vonage.  Vonage was also granted a waiver to conduct a limited 6 month trial involving 145,000 numbers.  The Wireline Competition Bureau is responsible for reporting back to the Commission at the conclusion of the trial.

Disassociating telephone numbers from geographic locations will also be part of this NPRM and NOI.

Check back as CCG will monitor this proceeding. We will be posting the NPRM and NOI when they are released.