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The FCC214 Carrier Lifcycle

 Who are FCC 214 Common Carriers ?

After many years of practice in the regulatory field of telecommunications, it still beguiles me how often I find myself debating with clients the point that their services, or service offerings, fall under common carrier regulation and the requirement of obtaining Authority pursuant to 47 U.S.C. § 214.  This license has a wide variety of names including: the “FCC 214”, “FCC Section 214”, “214 Authority,” “FCC 214 License”, the “214 License” and the “International 214” however in the end it is regulatory classification of the service provider as a common carrier.   This is particularly true when it has come to dealing with innovative providers and emerging technologies such as VoIP.

While Self-Definition is a factor in determining whether a provider’s services fall into a class of common carriage for regulatory purposes, the FCC still has the discretion to require service providers (of whatever nature) to serve all potential customers indifferently, making them common carriers. See. NARUC v. F.C.C., 525 F.2d 630 at 644 (D.C. Cir. 1976) cert. denied, 425 U.S. 992, 96 S. Ct. 2203, 48 L.Ed.2d 816 (1976).   The FCC therefore has the authority to compel carriers to act as common carriers.  As pointed out above in the United States v. Brooklyn Eastern District Terminal case of 1919, it all depends on what the carrier does, and in turn how the FCC defines that service offering.

Important to this definition is Title 47 of the US Code – which defines and regulates telecommunication services at the federal level.  In particular:

47 U.S.C. § 153(h) (2009) defines a “Common Carrier” or “Carrier” to mean any person (be they natural or a legal persona of a company)  engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or in interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier.

Historically the defintion has been broad “Whether a carrier is a common carrier . . . does not depend upon whether its charter declares it to be such . . . but upon what it does.” United States v. Brooklyn Eastern District Terminal, 249 US 296 (1919).   47 USC Section 214 (a)  …”No carrier shall undertake the construction of a new line or of an extension of any line, or shall acquire or operate any line, or extension thereof, or shall engage in transmission over or by means of such additional or extended line, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation, or construction and operation, of such additional or extended line…”

47 U.S.C. § 153(44) (2009) defines “telecommunications carrier”’ to mean any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226 of this title). A telecommunications carrier shall be treated as a common carrier under this chapter only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.”

In 2004, the FCC first addressed whether VoIP was a telecommunication service (for purposes of the Act and common carrier definition) or an Information Service in its Memorandum Opinion and Order In the Matter of Vonage Holdings Corporation.  See. FCC 04-267 (November 12, 2004). In that particular Memorandum Opinion and Order, the FCC addressed Vonage’s service offering of “DigitalVoice” and held that “DigitalVoice” cannot be separated into interstate and intrastate communications for compliance with state definitions of telecommunications or common carriage.  The FCC later brought Interconnected VoIP Service Providers within the parameters of Federal Regulation for the purposes of E-911 responsibilities. See.  IP Enabled Service Order (2005).  While not specifically addressing VoIP Toll Resale or other VoIP service application, the questions of whether a VoIP provider ought to seek FCC 214 Authority has been largely left to the providers.  Some seek the Section 214 Authority to satisfy their own Safe Harbor Standards, and other taking a more liberal stance and waiting until the FCC rules that all VoIP toll service Providers are common carriers.

One of the best layman’s definition I have come across that seems to plainly state the combined concepts fond in the Act of 1934, as amended, as well as U.S. case law and state statutory definitions was found in the online dictionary – YourDictionary.com under a two tier definition of Common Carrier Definition – Telecom

A company transporting goods, persons, or messages for a fee, at uniform rates available to the public.  In telecommunications, a company that is licensed to provide message transport services to the general public and generally is regulated to a considerable extent, at least with respect to fundamental aspects of service such as availability and basic rates. Such a license grants the holder certain rights, such as the right to control and assign globally unique telephone numbers (i.e., E.164 numbers), the right to collect certain fees from other carriers when handling calls jointly, and status under certain laws and regulations requiring interconnection. Common carrier status also imposes certain responsibilities, including collecting taxes from users, publishing tariffs, providing interconnection arrangements to other carriers, and paying certain fees to other carriers. In the United States, the Federal Communications Commission (FCC) and the state public utilities commission(s) (also called PUCs) regulate incumbent local exchange carriers (also called ILECs), i.e., telephone companies or telcos, and interexchange carriers (also called IXCs) to various extents.

Another good definition of Telecom Carrier comes under the Computer Assistance Law Enforcement Act (CALEA) found at 18 USC §2510.  In that codified statute, the term “telecommunications carrier means a person or entity engaged in the transmission or switching of wire or electronic communications as a common carrier for hire; and includes: (i) a person or entity engaged in providing commercial mobile service; or (ii) a person or entity engaged in providing wire or electronic communication switching or transmission service to the extent that the Commission finds that such service is a replacement for a substantial portion of the local telephone exchange service and that it is in the public interest to deem such a person or entity to be a telecommunications carrier for purposes of this subchapter; but does not include (i) persons or entities insofar as they are engaged in providing Information Services and (ii) any class or category of telecommunications carriers that the Commission exempts by rule after consultation with the Attorney General.

Where ever the touchstone for being a common carrier, the requirement to seek Authority pursuant to 47 U.S.C. § 214 to provide International or Domestic Long Distance Services is absolute.  The statute is a prohibitive statue requiring prior approval by the FCC before services can be rendered.  This requirement is not only limited to upstart companies in the telecommunication field, but also acquisitions of Telecommunication Carriers by other carriers or companies, who must seek a transfer of control prior to any acquisition of a Carrier or its assets, be they large or small.

Problems for Providers generally arise when they are generally arise when they are under-budgeted and enter the market first, and seek the FCC 214 Authority months or years after their market entry.  Likewise problem also arise where Providers acquire a carrier, or substantial parts of its assets, and seek the FCC 214 transfer of control in a post-transaction clean-up of items under the new administration.   The major concern for both types of scenarios is that operating without the prior approval of the FCC under 47 U.S.C. § 214 is a violation of the Communication Act of 1934, as amended, and can result in an Enforcement Action or a Notice of Apparent Liability (NAL) for Forfeiture based upon that violation.

This Blog will update readers on events affecting Common Carriers and FCC Section214 Carriers on thought events and major happenings in the Legal/Regulatory Environment.

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