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Tag Archives: Telecommunications regulatory

FCC LAUNCHES NEW CONSUMER TASK FORCE

The Federal Communications Commission announced on 1/20/2010 the launch of a Consumer Task Force to advance the Commission’s consumer agenda and promote collaboration across the various Bureaus of the FCC. The Task Force will include every Commission Bureau Chief, the Chief of the Office of Engineering and Technology, the General Counsel, and the Managing Director.  Joel Gurin, Chief of the Consumer and Governmental Affairs Bureau has been named head of the task force.

 FCC Chairman Genachowski announced the scope of the task force: “As communications networks and technologies become increasingly complex and essential to Americans’ everyday lives, the Commission must be a vigilant watchdog for the consumer. While we have one bureau with ‘consumer’ in its name, consumers are vital to the work of each of our bureaus and offices. Cross-agency collaboration is critical to this effort and that’s why I am so pleased to launch the Consumer Task Force.”

 The Consumer Task Force is set to play a critical role in advancing Commission proceedings on behalf of consumer interests; to ensure that consumer protection and empowerment policies apply consistently and reasonably across technologies and bureaus at the FCC; to ensure that the public is able to engage fully in FCC processes, and that the agency enhances the public’s understanding of Commission work through state-of-the-art consumer information programs, seizing the opportunities of information technology.

 Retail Telecommunication and Interconnected VoIP Providers may begin seeing Inquiries as a result of the Task Force’s efforts.  Since the Enforcement Bureau (EB) is now directly participating in the Task Force, it is unclear if Consumer Complaints against carriers and Interconnected VoIP providers may be more directly referred to the EB where there is question as to a violation of the Communication Act.  Contact the Maldonado Law Group should you have further questions or concerns as a provider, or in response to an inquiry.

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Requiem of the Small FCC 214 Carrier: The Dirge of FCC Shut-Downs.

I hate to say it, but, my office consultations to discuss carrier shut-downs have been more frequent in recent days.  Not surprisingly its small competitive resale and retail carriers closing-up shop these days. These small-sized carriers were not long-haulers in the market. The post 911 Era saw many of them enter the marketplace quickly after obtaining base FCC 214 Authority or declaration as a VoIP Carrier and budget facilities. Fueled by competitive international direct routes and the use of VoIP to offer aggressive rates in comparison to the major providers, these plucky carriers leveraged their small-size and niche routes to enter and exist in the marketplace.  

 However these exuberant entrepreneurs often lacked the financial stability and/or the proper administrative organization to successfully manage both the business and regulatory side of telecommunications.   Regulatory compliance was often consciously left to the back-burner in lieu sales and the quest for premium routes.  This became patently evident when the Great Recession of 2008-2009 coupled in time with more sophisticated FCC Regulatory Fee Enforcement and converged on them simultaneously. Pinned by shrinking commercial margins and back-owed FUSF, TRS, LNP, NANPA and FCC Contributions, many crawled for a period but now are coming to a make-it or break-it proposition: clean-ups or shut-down.   

 After reciting the colloquy of necessary clean-up steps and cancellation processes involved in a formal FCC and State shut-downs a few dozen times, it seemed prudent to post a brief, but non-exhaustive, list of what is needed to properly shut-down a FCC 214 Carrier or VoIP Carrier with some safe harbor suggestions for when you meet with your regulatory counsel:

1.  Understand that Cancellation of any Authority is your responsibility per the Federal Communication Commission’s Rules. Therefore if you don’t cancel your Section 214 Authority (214 License) and Form 499 Filer ID Number, FCC won’t do it for you and the FCC will continue to regulate you until they have Formal Notice from you as a carrier.  This includes the assessment of late fees for not filing regular FCC 499-A and 499-Q Reports and remitting Contributions.  Cancellation of your FCC Section 214 Authority can be done by a simple Petition.  Cancellation of your 499 Flier ID can be made through a Notice to USAC.  Both are formal Notices to the FCC and must be made truthfully under penalty of perjury per Commission Rules. Also pursuant to Commission Rules, it is your responsibility as a part of Cancellation to give Notice of Shut-Down to the State Regulatory Commissions (Public Utility or Service Commissions) where you operated, or alternatively the Governor of each state where you operated, and to the Department of State where applicable.

  •  Safe Harbor Suggestion #1 – If you decide to close operation as a FCC 214 Carrier, establish a final date of service in mind and have the necessary shut-down Petitions and Notifications prepared filed with the FCC International Bureau (FCC 214) and USAC (499 Filer ID and FCC 499 Reports) before that date.  If you leave it as a rolling date, it will, and liability will continue to accrue. Hedge any time delays due to glitches in the process, particularly the payment of past due regulatory fees owed to the FCC.
  • Safe Harbor Suggestion #2 – Have a ready list of States in which your company was authorized to provider telecommunication services. File your cancellation Notices to the State Public Utility Commissions well in advance of the final date of service, and even the Petition for the FCC 214 Cancellation, as states generally take more time to process this type of request, or, may require approval by sitting Commissioners in some instances.   

 2. Understand effective May 13, 2009, the same procedure required by FCC Section 214 Carriers for closing down their 499 Filer ID and paying down Contribution debt is also required by Interconnected VoIP Providers and VoIP Carriers.  See In the Matter of IP-Enabled Services WC Docket No. 04-36 REPORT AND ORDER Adopted: May 13, 2009.

 3. Understand that past due Contribution debts of over $100 that are over 180 days delinquent must be referred to the Department of Treasury for offset of any refunds or payments to your company. This means Treasury will match the debts against payments that might be owed to you from other Federal governmental entities (including tax refund payments), and will reduce those payments by the amount of your debt to the FCC. If mandatory centralized offset is not possible, Treasury and the Department of Justice will take necessary legal action to collect the delinquent debts. Treasury often uses third-party debt collection companies to collect the debt. The debt may be reported to a consumer reporting agency.  If the Carrier is financially unable to pay a debt owed to the FCC in one lump sum, it may request an installment payment plan, which can extend past the last date of service. There must be a basis for such a and the FCC will require the carrier, or its principal owners to enter into legally enforceable written agreements supporting the arrangement pursuant to 47 C.F.R. Part 1, Subpart O §1.1914.  The carrier can seek to offer a debt compromised, or reduced in amount as a part of closing out, however this must be backed by financial information justifying the request. FCC is only authorized to settle under a compromise when the principal balance of the debt is less than $100,000 USD. Only the Department of Justice may compromise debts exceeding a $100,000 USD debt. If you are about to enter into Federal bankruptcy protection, the FCC and its agencies should be Notified of this event in relation to Regulatory Fee Debt as the automatic stay imposed at the time the bankruptcy petition may stop any further collection activity by the FCC or Department of Treasury.

  •  Safe Harbor Suggestion #3 Assess any outstanding or past due Federal Universal Service Fund (FUSF) Contributions owed to USAC as well as Telecommunication Relay Service Fund (TRS), Local Number Portability (LNP), North American Numbering Plan Administration (NANPA), and FCC Contribution.  This will involve review of FCC Form 499 Reporting for the last two fiscal years in combination with review of Notices and Statements from USAC, NECA, NANPA, Welsch and Company, NuStar, and the FCC. Section 254(d) of the Communications Act of 1934 (Telecom Act) requires the FCC to collect USF contributions from all telecommunications providers offering interstate telecommunications services.  This includes all services until last day of operation.  Identify as best as possible Contribution Debt to be managed as a part of paying-down liabilities.
  • Safe Harbor Suggestion #4  Assess, Collect and Remit all pending Federal Universal Service Fund (FUSF) Contributions owed to USAC as well as Telecommunication Relay Service Fund (TRS), Local Number Portability (LNP), North American Numbering Plan Administration (NANPA), and FCC Contribution until last day of service.
  • Safe Harbor Suggestion #5 Begin negotiations for installment payments or debt compromise in advance of last date of operation.

4. Understand the Difference between the FCC Red Light Rule and FCC Wage GarnishmentThe “red light” rule simply means that if you are delinquent in debt owed to the FCC, it will not grant any further applications or other benefits until your debt to the FCC is resolved.  This can include the Cancellation of your Section 214 Authority.  If the Regulatory Contribution Debt has been already transferred to the Department of Treasury, there may be a possibility that the debt may be subject to wage garnishment.  Under Department of Treasury rules, also found at 47 C.F.R. § 1.1936 for the FCC, the Treasury may collect money owed to the FCC by garnishing wages of the delinquent debtor without first obtaining a court order. This may occur for delinquent debts of individuals or businesses that are sole proprietorships or partnerships.

  •  Safe Harbor Suggestion #6 Identify any past-due Contribution Debt and place priority to it as a part of shut-down liability liquidation.  Avoid risks of Red Light Rule treatment of your company that would result in denial of FCC Section 214 Cancellation or linger into future Wage Garnishment of Owners.   

5. Understand that any pending Enforcement Action by the FCC’s Enforcement Bureau must be resolved prior to shut-down unless a consent decree is entered by the carrier.   Since the FCC may potentially propose a fine against the carrier, the payment of the fine may be subject to the FCC Red Light Rule.

  The point of this brief review of steps and procedures is to provide small-sized resale and retail carrier a point of venture when talking to regulatory counsel about shut-downs.  It is by no means exhausting, or should it be.  The reality is that a final decision to close operations requires a hard analysis into the success, failure and potential of any business; and likewise, into the tenacity of its owners. Remember that a tough regulatory clean-up can be just as effective as closing and re-starting a business anew depending on the capabilities of the ownership and the core business proposition of the company. 

Good Luck and Success in the Industry

Attorney Edward A. Maldonado

November 29, 2009 – Miami, Florida

 
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Posted by on November 30, 2009 in FCC on VoIP, Wireline Bureau

 

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