BLOGS: Communications, Tech & Media Review

Thursday, June 30, 2016, 10:56 AM

Proposed FCC Rules for Team Telecom Review of Applications with Foreign Ownership, Shorten Timeframes, Add Burdens

By Marty Stern & Rebecca Jacobs
The FCC recently adopted a Notice of Proposed Rulemaking (“NPRM”) proposing reforms to the Executive Branch “Team Telecom” review process for certain FCC applications and petitions involving foreign ownership. The NPRM seeks to improve the timeliness and transparency of the current “Team Telecom” referral process, which currently can add months, if not indefinitely delay action, on an application.

Background on the Current Process
Currently, Commission staff refers specific applications to the Team Telecom agencies (the Departments of Homeland Security, Justice, Defense and the FBI) when there is “reportable” foreign ownership in the applicant. When an applicant has a ten percent or more direct or indirect owner that is not a U.S. citizen, the Commission refers the application for: (1) international section 214 authority; (2) assignment or transfer of control of domestic or international section 214 authority; (2) a submarine cable landing license; and (4) assignment or transfer of control of a submarine cable landing license. The Commission also refers petitions that seek authority to exceed the section 310(b) foreign ownership limits for broadcast and common carrier wireless licenses, including common carrier satellite earth stations.

Under the current process, once the application is referred to the Team Telecom agencies, they will typically send the applicant questions on the five percent or greater owners of the applicant, the names and identifying information of officers and directors of companies, the business plans of the applicant, and details about the network to be used to provide services. The agencies utilize that information and any follow-up questions to determine whether an application or proposed transaction potentially raise potential national security or law enforcement issues, in which case the agencies may seek to negotiate a letter of assurance (“LOA”) or network security agreement (“NSA”) addressing the concerns. Once the review is complete, the Executive Branch either advises the Commission to move forward on the application or advises the Commission that they have no objection to the grant of an application so long as the applicant complies with the terms of the LOA or NSA. Where such a mitigation agreement is required, it will typically be adopted as a condition of Commission action on the application.

Proposed Process Changes

In order to accelerate the current process, the Commission proposes to require applicants with reportable foreign ownership to provide certain information on ownership, network operations, and related matters when filing their applications in order to provide required information to the Executive Branch in a more expedited manner. The requested information would fall under the following categories: (1) corporate structure and shareholder information; (2) relationships with foreign entities; (3) financial condition and circumstances; (4) compliance with applicable laws and regulations; and (5) business and operational information, including services to be provided and network infrastructure.
In order to maintain flexibility as to the specific questions to be answered by the applicant, the Commission proposes only to include the categories of questions to be answered in the rule, as opposed to the specific questions. Once the new rules are adopted, the Commission would start a Paperwork Reduction Act of 1995 (“PRA”) process with specific questions, and then upon adoption and approval by the Office of Management and Budget under the PRA, would make the questions readily available on a website as a downloadable document. While the questions would be standardized, they would vary by category of application. To address concerns that some of the questions might not be able to be answered at the time the application is filed, the Commission seeks comment on whether completion of the questions should be a prerequisite for filing.
The Commission proposes that as part of its review of an application, staff would review responses to questions for completeness, but leave the substantive review to the Executive Branch. If threshold questions are not answered, staff would notify the applicant and provide them with a reasonable time to respond, e.g. seven days, ultimately subjecting an application to dismissal if questions remain unanswered.
To protect the confidentiality of any sensitive commercial information, the Commission proposes to use its current rules for requesting confidential treatment of information. The Commission seeks comment on this proposal and whether the Commission should take special steps to ensure that responses are secure, such as setting up a secure portal for providing the responses.
The Commission further proposes to add a certification requirement to the rules, including certification that the applicant will:

  1. Comply with applicable provisions of the Communications Assistance for Law Enforcement Act (CALEA);
  2. Make communications to, from, or within the United States, as well as records thereof, available in a form and location that permits them to be subject to lawful request or valid legal process under U.S. law, for services covered under the requested Commission license or authorization; and
  3. Agree to designate a point of contact located in the United States who is a U.S. citizen or lawful permanent resident for the execution of lawful requests and/or legal process.

By implementing the certification requirement, the Commission believes that it can eliminate the need for applicants with reportable foreign ownership to negotiate LOAs or routine mitigation measures, since the certification questions generally mimic commitments agreed to in such LOAs.
In a proposal that has already engendered some opposition, the Commission also seeks comments on whether all applicants seeking an international section 214 authorization or a submarine cable landing license, or applications to assign or transfer control of such authorizations and petitioners for section 310(b) foreign ownership rulings (common carrier wireless, common carrier satellite earth stations, or broadcast) should be required to make the certifications, not just those with reportable foreign ownership.
With regard to timing, the Commission proposes to adopt a 90-day period for Executive Branch review of applications and petitions. The Commission notes that in “rare instances” it proposes to allow a one-time additional 90-day extension provided the Executive Branch shows that complex issues warrant the extension and provides the Commission with the status of its review every 30 days thereafter. The time period for review would begin on the date the application is placed on public notice. If the Executive Branch does not notify the Commission within the 90-day period that it is requesting additional time to review the application, the Commission will act on the application.
Significantly, the Commission proposes that referral of international section 214 and submarine cable applications to the Executive Branch would take the applications off streamlined processing, since the Executive Branch requires more than 14 days to review the application.
Comments will be due 30 days after publication in the Federal Register.

If you would like additional information, please contact Marty Stern, Rebecca Jacobs, or any member of the firm's Communications, Technology and Media Law Group.

Wednesday, June 29, 2016, 3:09 PM

FAA's New Rules Are a Green Light For Growth of Commercial Drones

By Doug Bonner & Rebecca Jacobs

On June 21, 2016, the Federal Aviation Administration (FAA) released its long awaited amendments to regulations for the operation of small unmanned aircraft systems (“UAS”), defined as aircraft weighing less than 55 pounds. The new UAS rules are remarkable because rather than focusing on safety enhancements as the FAA has traditionally done, the FAA focused instead upon “social benefits” that will result from promoting growth of the nascent unmanned aircraft industry, while easing compliance requirements and costs for operating companies and designated pilots. Under this new cost-benefit analysis, the FAA estimates net “social benefits” will range between $733 Million and $9 Billion for the next five years through 2020. And the UAS industry estimates that the new FAA rules could generate more than 100,000 new jobs and $82 billion in economic activity over the next decade.1 The new rules also establish a mechanism for the UAS industry to seek a wide range of waivers from the newly established general operating restrictions. The new rules will be effective on August 26, 2016, 60 days after publication in the Federal Register. Until the new rules are effective, commercial drone operators will continue operating under prior exemption grants.

The new rules implement a range of operating restrictions for UAS, including with regard to speed, altitude and piloting of the aircraft. Under the new rules, small UAS will only be permitted to operate either (a) in daylight or (b) during twilight, but only if the drone has anti-collision lights. In addition, the drone’s speed may not exceed 100 mph. The rules also impose limitations on flying altitudes, limiting drones to an altitude of 400 feet, unless the drone is within 400 feet of a structure in which case the drone can fly above 400 feet. The exception to the altitude restriction should prove useful for commercial applications utilizing drone aircraft for tower safety inspections. The FAA has adopted (or preserved) additional safety rules, including that drones will be restricted from flying over persons not directly involved with the flight and must stay within the visual-line-of-sight of the pilot in command and person manipulating the controls. In order to permit operational flexibility, however, the rules also establish a waiver application mechanism for operators that may wish to deviate from the general operating restrictions. The FAA will evaluate waiver requests based on whether the proposed operation can be safely conducted under the certificate of waiver. It is widely expected that the FAA will receive a large number of waiver requests under this new flexible regulatory framework to address specific commercial drone applications; the FAA estimates it will spend an additional $150 million through 2020 to hire additional employees and to implement these new rules.

For a detailed summary of the major provisions of the rule, please click here to access a table prepared by the FAA.

If you would like additional information, please contact Douglas Bonner, Rebecca Jacobs, or any member of the firm's Communications Law Group.

1. “A Longer Leash for Drones,” The Wall Street Journal (June 25-26, 2016) at B3.

Monday, June 27, 2016, 9:56 AM

What Womble Carlyle Clients Need To Know About The U.K. Brexit Vote

In the short term, the U.K.’s unprecedented—and unexpected—vote to exit the European Union creates considerable uncertainty for U.S. companies operating in the U.K., EU and beyond. A wide range of questions has yet to be answered regarding how the U.K. will work with EU nations moving forward, and complex negotiations will be required to resolve those questions.

Last week, Womble Carlyle entered an historic global alliance with leading U.K. firm Bond Dickinson, with the goal of ensuring that both firms’ clients experience outstanding client service on both sides of the Atlantic.  Bond Dickinson’s team has followed the Brexit question closely, and its attorneys have prepared a great deal of material analyzing the legal, political and economic impact of the vote. By clicking on the link below, you can access Bond Dickinson’s insights about the effect of tariffs, the withdrawal of EU funding, the effect of immigration controls on international recruitment and possible corporate relocation as potential issues that may impact companies in the U.K. and EU markets.

Click here to read “Brexit: Legal implications of the UK withdrawal from the EU” from Bond Dickinson.

Friday, June 10, 2016, 10:52 AM

Womble Carlyle Telecom Team in Radio Ink: Everything Radio Stations Need to Know About Texting Their Listeners

WASHINGTON, D.C.—Many radio stations use text messaging to deliver information and advertising to listeners. However, improper use of texting can lead to Telephone Consumer Protection Act (TCPA) violations—and potentially expensive class action lawsuits—for broadcasters.

Womble Carlyle’s Telecom Team regularly works with radio stations on TCPA issues. Attorneys Doug Bonner, John Garziglia, Rebecca Jacobs and Marty Stern recently discussed “Everything You Need to Know About Texting Your Listeners” with Radio Ink.

In the article, Bonner, Garziglia, Jacobs and Stern answer such questions as:

  • What is the liability difference between sending unsolicited informational text messages, and sending unsolicited advertising text messages?
  • There must be “prior express consent” for unsolicited automated informational text messages. Then there is the higher standard of “prior express written consent” for unsolicited automated advertising text messages. What is the practical difference to these forms of consent and is this a distinction without a difference?
  • Are the sports scores text messages shown in the CBS Radio lawsuit advertising messages or informational messages?
  • What about the situation where a radio station is sending sports scores or other apparent informational texts that were presumably requested at some point to be sent but the telephone number is re-used on a burner phone or changed through subscriber churn?
  • Does a radio station’s insurance cover a TCPA lawsuit?
  • Some radio stations have established various text alerts such as weather and traffic alerts, school closings, pump patrol and such to send to listeners who sign up. The informational texts might also come with a sponsor message. Are these radio stations inherently open to a class action lawsuit no matter what safeguards they employ and consents they request, or is there a way for a radio station to safely run such a service for listeners?
  • If a radio station seeks requests or contest entries by texting, can the radio station automatically respond with one reply text message that also contains an advertising message in the signature line?

Click here to read the full article, “Everything You Need to Know About Texting Your Listeners,” at Radio Ink.
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