The Prepaid Press - March 15, 2008 - (Page 7)

PREPAID BUSINESS March 15 · 2008 - 7 REGULATORY RUNDOWN by Ed Maldonado FCC Enforcements 1. FCC’s Twelfth Annual CMRS Report to Congress to shape future policy. 2. FCC Petitions for Reconsideration – alternative to Courts Appeals. 3. Failure to respond to informal complaints results in FCC fines. 4. CPNI enforcement continues. 1. FCC’s Twelfth Annual CMRS Report to Congress to shape future policy. February 4, 2008 (Washington, DC) The Federal Communications Commission (FCC) released its Twelfth Annual Report to Congress on the state of competition in the mobile telephone, or Commercial Mobile Radio Services (CMRS), industry. The Twelfth Report highlights the benefits to U.S. consumers that have resulted from current market competition policy, which has resulted in low prices, new technologies, improved service quality, and consumer alternatives among CMRS providers. It also introduced a new data source that allows for an accurate analysis model of mobile telephone service deployment and competition, through a set of maps that provide the detailed boundaries of the network coverage areas of every operational mobile telephone carrier in the United States. Using this model, the FCC was able to estimate: (1) the percentage of the U.S. population covered by a certain number of providers, and (2) the percentage of the population covered by different types of network technologies based on census blocks, rather than counties. The analysis of the Twelfth Report shows the following statistics, which are interesting for both regulatory and commercial purposes: • Approximately 280 million people, or 99.8 percent of the U.S. population, live within a census block served by one or more different mobile operators. • More than 95 percent of the U.S. population lives in areas served by three competing mobile telephone operators. • More than half of the U.S. population lives in areas served by at least five competing mobile telephone operators. • Approximately 99.3 percent of the U.S. population living in rural counties, or 60.6 million people, have one or more different operators offering mobile telephone service in the census blocks within the rural counties in which they live. • Approximately 82 percent of the U.S. population lives in census blocks served by at least one mobile broadband provider. • In 2006, the number of mobile telephone subscribers in the United States rose from 213 million to 241.8 million, increasing the nationwide penetration rate to approximately 80 percent. • The average number of minutes that subscribers spend on their mobile devices increased from 708 minutes per month during the second half of 2005 to 714 minutes per month during the second half of 2006. • The volume of text messaging traffic rose from 9.8 billion messages during December 2005 to 18.7 billon messages sent during December 2006. • Revenue per minute, which can be used to measure the per-minute price of mobile telephone service, remained unchanged during 2006 at $0.07. Future FCC competition policy and regulation will likely be based on the findings of the Twelfth Annual Report to Congress, so wireless providers (both prepaid and post paid) are encouraged to review the full report available at www.fcc.gov APCC contended, was contrary to Commission prior precedent, as established in the Wisconsin Payphone Order wherein the FCC specifically rejected an argument that BOC payphone line rates may include subsidies for other RBOC services. This regulatory conflict was sufficient to reverse the FCC application of the Centrex Waiver Order to carve out exceptions for PSPs. FCC’s Reconsideration Order of the prior Centrex Waiver Order is significant in that it illustrates that, armed with a factual basis, FCC Orders can be reevaluated or qualified as to their effects on telecommunication service providers. In recent years, carrier challenges to FCC Orders have largely taken the approach to immediately appeal the Orders to the D.C. Circuit Courts, based upon constitutional authority claims. The courts, when reviewing such claims on FCC Orders, have tended to not focus on the substance of the effect to telecom providers, but whether there was sufficient fact finding by the FCC to allow the FCC to make determinations among service providers that are found in the Order. The courts are more concerned with the procedure ability of the FCC’s right to decide, as opposed to the substance of the findings, or the impact on providers. Traditionally this has resulted in the courts upholding FCC Orders where they could be “reasonably based” upon fact-finding by the FCC. Today’s Order on Reconsideration may cause carriers and prepaid providers to re-think their legal responses to FCC Orders that may adversely affect them. It may now be wiser to not immediately appeal the fact-finding of the FCC under “arbitrary and capricious” exercises of authority, but instead build administrative and regulatory arguments based upon concrete facts, and Petition the FCC for Reconsideration based upon conflicts in its policy and the practical operation of those in the telecommunication industry. Inc. ($16,000), Amp’d Mobile, Inc. ($8,000), Blue Casa Communications, Inc. ($8,000), Cricket Communications, Inc. ($8,000), Reduced Rate Long Distance, LLC ($8,000), Cooperative Communications, Inc. ($4,000), Link System, Inc. ($4,000), Sprint Nextel Corporation ($4,000), and Total Call International, Inc. ($4,000). The assessment of these NAL fines impresses on all carriers the importance of resolving consumer issues before they become a complaint, and, responding to all FCC requests on time. Be aware of this issue as FY 2008 progresses, as the FCC is now likely to strictly enforce informal complaint response deadlines. 4. CPNI enforcement continues. February 19, 2008 (Washington, DC) The Federal Communications Commission’s Enforcement Bureau (FCC) entered into a Consent Decree with CTC Communications Corp. resulting from an investigation into CPNI (Customer Proprietary Network Information) compliance. As a part of the decree, CTC agreed to voluntarily contribute $100,000 to the United States Treasury, without further protest or recourse to a de novo trial of the matter. As with all consent decrees, this voluntary payment did not constitute a fine or penalty for, or admission of, the violation of any law. However, the CTC Consent Decree is the latest event in a series of efforts of the FCC to ensure CPNI compliance from all common carriers under 47 U.S.C. § 222, and section 64.2009(e) of the Commission’s rules. This action shows that the FCC views compliance as more than merely making an annual certification statement that the carrier is compliant, and that they are reviewing retroactive compliance. 2. FCC Petitions for Reconsideration – alternative to Courts Appeals. February 14, 2008 (Washington, DC) The Federal Communications Commission (FCC) issued an Order on Reconsideration in response to a Petition filed by the American Public Communications Council (APCC) seeking modification of the Commission’s March 14, 2003 ruling that waived the requirements of section 54.712 of the FCC’s Rules that permit local exchange carriers (LECs) to recover certain contribution costs associated with Centrex customers on a per-line basis from multi-line business customers through the federal universal service line item. The basic argument of the APCC was that the effect of the prior decision, where applied to independent payphone service providers (PSPs), did not further the stated goal of section 276 to “promote the widespread deployment of payphone services to the general public.” Upon reconsideration, the FCC agreed with APCC that the Centrex Waiver Order unfairly burdens Payphone Service Providers in a manner inconsistent with Congress’ legislative intent. The FCC’s fact-finding this time was swayed by the introduction of data and analysis developed by the APCC, which quantitatively showed, using RBOC tariffs, that absent a re-evaluation of the Centrex Waiver Order, affected PSPs would pay less in the USF contribution pass-through charges, requiring artificial mark-ups to be charged. This type of regime ran contrary to prior regulations established by the FCC on the subject, and the APCC qualified exactly how in its data. This, the 3. Failure to respond to informal complaints results in FCC fines. February 19, 2008 (Washington, DC) The Federal Communications Commission’s Enforcement Bureau issued a series of fines under Notices of Apparent Liability for Forfeiture (or “NALs”) to common carriers who have failed to respond to informal complaints served onto them by the Consumer & Governmental Affairs Bureau (“CGB”), as violations of Section 1.717 of the FCC’s rules. The Commission’s informal complaint process is generally administered by CGB and provides consumers an administrative forum to have serious carrier complaints resolved by informal mediation between the CGB and the carrier. When such complaints are received by the FCC, the CGB serves the informal complaint upon the carrier and thereafter requires the carrier to provide a written response within thirty (30) days, addressing how the consumer making the complaint has been satisfied, or the carrier’s refusal and/or inability to satisfy the substance of the complaint. In either case, a timely response is required by the carrier to avoid fines. Should the carrier provide a response that the consumer has been satisfied, the FCC usually considers the complaint proceeding closed. If the carrier’s response does not satisfy the consumer, and the FCC finds reasonable merits to the consumer’s complaint, the process can escalate to a formal complaint in accordance with 47 CFR §1.721. Where there is no response, whatsoever, from the carrier, the FCC may determine this failure to be a willful act contrary to the Telecom Act, federal regulation, and FCC Rules, and issue a forfeiture penalty against the carrier pursuant to 47 USC Section 503(b)(1). Sec http://www.fcc.gov http://www.fcc.gov

Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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