The Miller Isar, Inc. Regulatory Review is a monthly report designed to provide clients with information regarding regulatory and policy matters that may impact their business operations. The Regulatory Review is provided for informational purposes only and does not constitute legal opinion or legal counsel. 

Federal Regulatory News

Commission Extends USTelecom Forbearance Petition

 On    February 14, 2019, the Wireline Competition Bureau issued an order extending by 90 days, until August 2, 2019, the date by which USTelecom’s petition    for forbearance from certain regulatory obligations imposed on incumbent    local exchange carriers shall be deemed granted in the absence of a    Commission denial. Section 10 of the 1934 Communications Act, as amended, establishes    that if the Commission does not act on a petition for forbearance within one    year of receipt, the petition shall be deemed granted. Section 10 authorizes    the Commission to extend a deadline by 90 days, if more time is needed to    complete its analysis of whether a petition meets the statutory criteria. (Docket    No. 18-141).

USAC Files 2Q19 USF Support Mechanisms and Fund Size  Projections

On  February 1, 2019, the Universal Service Administrative Company (USAC) submitted Federal  Universal Service Support Mechanisms Fund Size Projections for the  second quarter of 2019. USAC projects the high-cost support mechanism funding  requirements at $1.108 billion. (Appendices are available on USAC’s website.)

New Commission Fraud Division Created

On February  4, 2019, the Commission issued an order creating a new fraud division under the Enforcement  Bureau. According to the Commission, this new division is tasked to investigate  and prosecute Universal Service Fund fraud and coordinate with the Commission’s  Office of Inspector General, the U.S. Department of Justice and other law  enforcement agencies to prosecute unlawful conduct. The division will be  staffed with experienced Enforcement Bureau staff. The Commission’s press  release noted that the fraud division will be established following review  and approval by the Office of Management and Budget and the House and Senate  Appropriations Committees, and publication of the order in the Federal Register.

ILEC Unbundling Obligations Information Collection PRA  Comments Due March 8

On February  6, 2019, the Commission published a notice in the Federal  Register requesting Paperwork Reduction Act (PRA) comments on an extension  of a currently approved information collection associated with incumbent local  exchange carrier unbundling obligations resulting from the Commission’s  February 2005 order  on remand. The Commission  noted that the remand order imposed unbundling obligations in a more targeted  manner where requesting carriers had made their own facilities-based investments  and are using unbundled network elements in conjunction with self-provisioned  facilities. PRA comments are due March  8, 2019. (CC Docket No. 01–338 and WC Docket No. 04–313)

Illegal Robocall Report Released

On February 14,  2019, the Commission issued a news  release announcing Chairman  Pai’s release of the Commission’s report on illegal robocalls. The Robocall Report addresses provider implementation of proactive  blocking of invalid, unallocated and unused numbers, authorized under a 2017 Commission rule change.  The Report also addresses progress toward caller ID authentication through adoption and implementation of STIR/SHAKEN  standards. Additionally, the Report explains the Commission’s development of a  reassigned number database; reports on the Commission’s proposed or imposed  monetary forfeitures totaling $245,923,500; and explains Commission efforts for  industry-wide cooperation with agency traceback efforts. (GC Docket No 17-59)

Commission Releases NPRM In Section 503 of RAY BAUM’s Act  and Truth in Caller ID Implementation

On  February 15, 2019, the Commission released a Notice  of Proposed Rulemaking (NPRM) in its implementation of Section 503 of  RAY BAUM’S Act and the Truth in Caller ID Act of 2009 proceedings.  The NPRM proposes rules to preclude fraudulent  spoofing activity – use of inaccurate and misleading caller ID information, and  to modify the Commissions current Truth in Caller ID rules consistent with federal  law.   The RAY BAUM’S Act expands the  reach of covered entities from “any person within the United States” to include  “any person outside the United States if the recipient is within the United  States.”  The Truth in Caller ID Act directed  the Commission to enhance rules to further protect consumers from caller ID  spoofing.  The proposed rules include  additional definitions in Section 64.1600 of the Commission’s rules that expand  the scope of each term consistent with the statutes, and amends Section 64.1604(a)  of the Commission’s rules to include prohibitions on calls or text messages intended  to defraud the public whether originated within or outside the U.S.  Comments are due 30 days following publication  in the Federal Register and reply  comments are due 60 days following publication. News Release (Docket Nos. 18-335 11-39).

Draft 2019 Broadband Deployment Report Circulated

On  February 19, 2019, the Commission issued a news  release announcing that Chairman Pai has circulated a draft of the Commission’s  2019 broadband deployment section “706 Report” to his fellow commissioners. The  draft report finds that the “digital divide between Americans with and without  access to modern broadband networks has narrowed substantially,” and “concludes  that advanced telecommunications services - broadband - is being deployed on a  reasonable and timely basis.” The draft report shows that since release of the  2018 report, the number of Americans lacking access to a fixed broadband  connection meeting the Commission’s benchmark speed of 25 Mbps/3 Mbps has  dropped by over 25 percent, from 26.1 million Americans at the end of 2016 to  19.4 million at the end of 2017, and the majority of those gaining access to  high-speed connections live in rural America. “The number of Americans with  access to 250 Mbps/50 Mbps fixed broadband grew by over 45%, to 205.2 million,  and the number of rural Americans with access to such service more than doubled.”  The Commission is expected to vote on the report in the coming weeks.

Before Congress

House Subcommittee Holds Open Internet Hearing

On January February 7, 2019, the  House Communications and Technology Subcommittee held a hearing entitled “Preserving an Open Internet for Consumers, Small Businesses, and Free  Speech.” Tom Wheeler of the Brookings Institute and former Commission Chair, testified that  Commission open Internet policies established prior to 2017 and articulated in  the 2015 Open Internet Order, are backbone concepts for the network oversight. He also said any  further policy considerations should use the 2015 concepts as the starting  point to secure the public’s critical interest in a free and open internet. Joseph  Franell, CEO of Eastern Oregon Telecom,  said the application of Title II as part of net neutrality had a dramatic  effect on rural telecom and made investors hesitant to invest in the  telecommunications sector; yet following repeal of net neutrality rules,  investors have been much more willing to invest in rural telecommunications.  Testimony was also given by: Denelle  Dixon, Mozilla; Ruth  Livier, UVLA doctoral student; and Jessica  Gonzalez, Free Press and the Free Press  Action Fund.

Republican members of the House  Energy and Commerce have introduced the Open Internet Act of 2019; three bills  that would prevent throttling, blocking and paid prioritization.  The Republican members are asking their  Democratic colleagues to consider the bills a starting point toward a  bipartisan net neutrality resolution. The bills have not received a favorable  response from Democrats or net neutrality activists, because they lack a general  conduct standard and does not apply Title II regulation to Internet service  providers, according to opponents.

Telecommunications Fee Legislation Introduced

On February 14, 2019, Senator Ed  Markey (D. MA.) and Representative Anna G. Eshoo (D. CA) introduced legislation  that would require phone, cable, and Internet providers to include all charges  in advertised service prices and offer remedies for consumers who have been  wrongfully charged. According to a news  release, the Truth-In-Billing, Remedies, and User Empowerment over Fees  (TRUE Fees) Act (S 510 and HR 1220) “requires phone, cable, and internet  providers to include fees, charges, and surcharges in the prices they advertise  for service; allows customers to end their contract without early termination  fees if their provider increases prices; prevents hikes on equipment fees  unless providers improve equipment; and prohibits forced arbitration clauses  for wrongful billing errors.” Representative Eshoo had introduced a similar bill  in 2018.

In the Courts

Windstream Announces Bankruptcy

On    February 25, 2019, Windstream Holdings, Inc., announced that it filed in the    U.S. Bankruptcy Court for the Southern District of New York to reorganize    under chapter 11 of the U.S. Bankruptcy Code.     According to the Company, the filing comes as a result of a decision  to “address debt maturities that have

been  accelerated as a result of the recent decision by Judge Jesse Furman in the  Southern District of New York against Windstream Services, LLC, a subsidiary of  the Company.”  District Judge Furman had ruled  in favor of bond holders who challenged a 2015 spinoff of certain telecom  network assets by Windstream subsidiary Windstream Services LLC into a real  estate investment trust (REIT).  The  action led Windstream Holdings to postpone the release of its 2018  fourth-quarter and full-year financial results.   Windstream President and Chief Executive Officer Tony Thomas said, “Following  a comprehensive review of our options, including an appeal, the Board of  Directors and management team determined that filing for voluntary Chapter 11  protection is a necessary step to address the financial impact of Judge  Furman's decision and the impact it would have on consumers and businesses  across the states in which we operate.”

AT&T – Time Warner Merger Ruling Upheld

The  U.S. Court of Appeals for the District of Columbia Circuit has affirmed a decision  by Senior U.S. District Judge Richard Leon in June 2018, rejecting the Justice  Department's opposition to the AT&T, Inc., and Time Warner, Inc. merger.  AT&T and Time Warner had concluded the  merger two days after Judge Leon's ruling after the Justice Department agreed  not to seek a stay of the ruling pending appeal.  Justice also agreed not to oppose elimination  of the waiting period imposed by the district court's case management order in  exchange for commitments from AT&T to “manage the [TWI] Turner networks as  part of a separate business unit, distinct from the operations of AT&T  Communications, which includes AT&T's DIRECTV and U-verse businesses.” D.C.  Circuit Judge Judith W. Rogers concluded that the government had not offer an  analysis of data regarding vertical mergers to counter the analysis offered by  the defendants, and that the expert opinion and economic modelling predicting  increases in content pricing “failed to take into account [TWI subsidiary]  Turner Broadcasting System's post-litigation irrevocable offers of no-blackout  arbitration agreements, which a government expert acknowledged would require a  new model.” Judge Robert L. Wilkins and Senior Circuit Judge David B. Sentelle,  noted, “Evidence also indicated that the industry had become dynamic in recent  years with the emergence, for example, of Netflix and Hulu. In this evidentiary  context, the government's objections that the district court misunderstood and  misapplied economic principles and clearly erred in rejecting the quantitative  model are unpersuasive.” "U.S. v.  AT&T et al." (Case 18-5214).

State Regulatory News

KENTUCKY – State USF Surcharge Reduced      

The Kentucky  Public Service Commission has ordered a reduction in the monthly state universal service fund surcharge applicable to all access lines in the state. The new surcharge is $0.07 per access line,  a reduction from $0.09 per access line.  The  surcharge is to remain in place during a Commission rulemaking regarding the  long-term future of the fund or until further order by the commission. The monthly  surcharge had been increased to $0.14 per month from $0.08 in March 2016 to  stabilize the fund, which was found to becoming insolvent, and opened an  investigation into the state fund consider options for stabilizing the fund.  The Commission subsequently ruled that the  state fund would support Lifeline service only. In September 2017, the  surcharge was lowered to $0.09 per month following a finding that the Fund had  reached sufficient funding levels. (Case 2016-00059)

UTAH – Commission Increases USF Surcharge

The  Utah Public Service Commission has approved an increase in the state’s  Universal Service Fund surcharge to $0.60 per month, effective May 1, 2019,  following a recommendation by the Division of Public Utilities recommendation.  The Division had determined that the existing  $0.36 surcharge was insufficient to maintain fund obligations including an  increase in high cost support approved by the Commission.  A challenge was raised by the Utah Rural  Telecom Association, which called the increase unsustainable.  The Commission noted that the increase was  necessary to meet legislative directed universal service fund requirements. (Docket  18-999-15)

WEST VIRGINIA – Commission Sets Interest Rate on Security  Deposits

On  February 8, 2019, the West Virginia Public Service Commission issued an Order setting the interest rate to be paid on customer deposits held by  telecommunications companies. The interest rate was set at 2.67 percent  (0.0267), based on the average rate paid on Treasury Bills during fourth quarter  2018.   The rate became effective on the Order date.

Compliance Reporting March

The following report listing has been compiled from past reporting requirements and is provided exclusively for informational purposes.  Reporting requirements are subject to change and should be verified by filers.

Federal Reports Due in March

Copies of FCC forms are available on the Internet at: http://www.fcc.gov/formpage.html.