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Regulatory Rundown
FCC Crackdown

By Matthew Schulman

This issue of the Regulatory Rundown deals with the following items:
1. FCC Announces Joint E911 Task Force
2. FCC Extends Reporting and Compliance Deadlines for I-VoIP Providers
3. Encryption for VoIP! Potential Regulatory showdown?
4. Unsolicited Fax Compliance Deadline Extended
5. FCC Regulatory Fees increase by 2.6 %
6. FCC Chairman Shares FCC Policy Possibilities


FCC Announces Joint E911 Task Force

On July 25, 2005, FCC Chairman Kevin J. Martin announced a Joint Federal and State VoIP Enhanced 911 (E911) Enforcement Task Force. This FCC-NARUC (National Association of Regulatory Utility Commissioners) task force will be comprised of staff from both the FCC and State Public Utility Commissions, who will work closely with representatives from the public safety community, including the Association of Public Safety Communications Officials (APCO) and the National Emergency Number Association (NENA).

The Task Force was created to facilitate the timely and effective enforcement of the FCC’s VoIP E911 rules. Working together, federal and state Task Force members will look at developing educational materials to ensure that consumers understand their rights and the requirements of the FCC’s VoIP E911 Order. They will also consider rules on how best to expedite compliance and facilitate enforcement, if necessary. The Task Force will also compile data and share best practices.

Chairman Martin said, in announcing formation of the Task Force, “One of the FCC’s core missions is to promote public safety. Our VoIP E911 rules are critical to achieving that goal. I look forward to working with my colleagues in the states to advance our common goal that all Americans, no matter their provider, have access to life-saving emergency 911 services.”


FCC Extends Reporting and Compliance Deadlines for I-VoIP Providers

On July 26, 2005, the FCC Enforcement Bureau (EB) released a “guidance” notice to Interconnected Voice Over Internet Protocol Service Providers Concerning the July 29, 2005 Subscriber Notification Deadlines. (Note: This item is covered more completely in an associate article in the telecom & technology section of this month’s issue)

In this Public Notice, the EB provided guidance and assistance to providers of interconnected voice over Internet protocol (I-VoIP) service concerning enforcement of the subscriber notification provisions of the Federal Communications Commission’s (FCC) rules governing enhanced 911 (E911) capability. The FCC extended the deadline for compliance by 30-days to August 29, 2005 (approx.) as long as the I-VoIP providers have met certain reporting requirements by August 10, 2005.


Encryption for VoIP! Potential Regulatory showdown?

Phil Zimmermann, creator of the Pretty Good Privacy, PGP, e-mail encryption program, was a keynote speaker at the Black Hat Briefings held July 28-31 in Las Vegas. He is promoting his new project, Zfone, which is designed to encrypt VoIP to avoid eavesdropping. Most people believe that VoIP is a secure technology, because voice is transmitted in separate data packets, and the fact that there have not been many documented cases of problems. The only cases that this author is aware of are related to wholesale VoIP traffic where a gateway IP address is spoofed or penetrated and traffic is passed without permission. But on the consumer side, only certain platforms have the ability to “monitor” conversations occurring on their network, and outside “interception” has not been discovered so far.

One main question that arises is, “How will this technology potentially conflict with CALEA (Communications Assistance for Law Enforcement Act) requirements, which as related to VoIP, are still in development?”


Unsolicited Fax Compliance Deadline Extended

On June 28, 2005, the FCC delayed the effective date for rules concerning unsolicited fax advertisements until January 9, 2006. The FCC has delayed until January 9, 2006, the effective date of the Commission’s July 2003 determination that anyone sending an unsolicited advertising fax obtain a prior signed, written statement as evidence of the recipient’s permission to receive the fax. Until January 9, 2006, such faxes may be sent without prior written consent to people with whom the advertiser has an existing business relationship.


FCC Regulatory Fees increase by 2.6 %

On July 7, 2005 the FCC released a Report And Order On Reconsideration of regulatory fees.

In this Order, the FCC concluded a proceeding to collect $280,098,000 in regulatory fees for Fiscal Year (FY) 2005. These fees are mandated by Congress, and are collected to recover the regulatory costs associated with the Commission’s enforcement, policy and rulemaking, user information, and international activities. This adjusted amount is $7,140,000, or approximately 2.6 percent greater than the $272,958,000 the Commission was required to collect during the previous fiscal year.

The FCC did not change or modify the methodology for assessing regulatory fees for international carriers that have International Bearer Circuits. The FCC declined to adopt the Tyco proposal to create a new, separate fee category for non-common carrier cable landing licensees at this time.

The FCC also declined to modify the FY 2005 regulatory fee assessment methodology for Direct Broadcast Service (DBS) providers in response to the comments of the National Cable and Telecommunications Association (NCTA) and American Cable Association (ACA). The FCC declined to establish a MVDDS regulatory fee category at this time.

Regarding Interstate Telecommunications Service Providers (ITSPs), the FCC began sending pre-completed FCC Form 159-W assessments to carriers in an effort to assist them in paying the Interstate Telecommunications Service Provider (ITSP) regulatory fees. In the FCC’s FY 2005 NPRM, they sought comment on this billing initiative and on ways to improve it, but received no comments or reply comments. So the FCC will continue the ITSP, Form 159-W, billing initiative in FY 2005.

The FCC denied the petition for reconsideration filed by Cingular Wireless LLC of the Commission’s FY 2004 Report and Order. The FCC disagreed with arguments by Cingular, CTIA, and others, that the NRUF data are not sufficiently accurate for the purpose of assessing regulatory fees for the three classes of Commercial Mobile Radio Service (CMRS) providers — the Cellular Radiotelephone Service, the Personal Communications Service (PCS), and the Specialized Mobile Radio (SMR) Service. The FCC will continue to rely on the NRUF data for the FY 2005 regulatory fee assessments for these carriers.


FCC Chairman Shares FCC Policy Possibilities

FCC Chairman Martin remarked on July 26, 2005 at the NARUC summer meeting held in Austin Texas that “Perhaps the most important action we need to take in furtherance of broadband deployment is to place wireline and cable providers of broadband Internet access services on a level-playing field.” He further commented that “Right now, cable modem providers operate free of most regulation.…which is not the case for [legacy] telcos. This disparity continues to distort the marketplace. Again, we need to make the broadband regime, as well as the universal service and intercarrier regimes, technology and competitive neutral. Now that the Supreme Court has spoken and provided us much needed clarity (regarding the Brand X decision), we can move forward. To this end, I have already shared with my colleagues a proposal that would give telcos the same deregulatory treatment as cable. It is my strong hope that this order will be adopted as soon as possible so that consumers can reap the benefits of continued infrastructure investment and the increased deployment of broadband services. Although I believe that new technologies and services should operate free of economic regulation, I also believe that law enforcement agencies must have the ability to conduct electronic surveillance over these new technologies.”


Open FCC Meeting Held on Aug 4, 2005

The FCC held an open commission meeting on Thursday, August 4, 2005 to discuss several issues. Among them:
1- An inquiry into the Commission’s Process to Avert Harm to U.S. Competition and U.S. Customers Caused by Anticompetitive Conduct and circuit disruption by foreign carriers on U.S.-international routes.
2- An Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming.
3- The Commission will consider an Order on Reconsideration concerning the Service Rules for Advanced Wireless Services in the 1710-1755 MHz and 2110-2155 MHz bands

Additional information concerning this meeting may be obtained from Audrey Spivack or David Fiske, Office of Media Relations, (202) 418-0500; TTY 1-888-835-5322.

Matthew Schulman is a principal of the Regnum Group. He can be reached at mschulman@regnumgroup.com.