FCC Sets Sights on China

As yet another example of the U.S. government’s ongoing concerns about the potential vulnerability of U.S. telecommunications networks and supply chains, the FCC recently released a Notice of Proposed Rulemaking (NPRM) proposing to prohibit the use of funds disbursed from the Universal Services Fund (USF) to purchase equipment or services from any providers posing a national security threat to the U.S. The USF distributes funds and subsidies to companies who provide service to unserved and underserved locations and low-income consumers. The NPRM dovetails with recent governmental actions targeting perceived Chinese threats to U.S. telecommunications infrastructure, including the passage of the National Defense Authorization Act (NDAA) for Fiscal Year 2018 (which prohibits the Department of Defense from using the equipment or services of certain Chinese telecommunications companies), the Committee on Foreign Investment in the United States’ (CFIUS) blocking of chipmaker Broadcom’s hostile takeover bid for Qualcomm, and the Department of Commerce’s denial of export privileges against a Chinese telecommunications manufacturer for seven years. It also precedes a recent report by the Wall Street Journal on May 2, 2018 detailing the possibility of executive action by the Trump administration to restrict Chinese companies’ ability to sell telecommunications equipment in the U.S. Chinese companies have already taken action as a result of this increased focus on Chinese telecommunications equipment, including one firm’s request for a stay of a U.S. order banning American companies from selling to the firm. Continue Reading

Chips on Their Shoulders: CFIUS Intervenes in Broadcom’s Hostile Takeover Bid for Qualcomm

  • CFIUS takes an unprecedented step to fend off a potential foreign acquisition
  • The threat that China will eclipse the U.S. in telecommunications infrastructure and technology is central to U.S. national security
  • Five key takeaways from the most recent CFIUS action

Since late 2017, Singapore-based semiconductor company Broadcom has been pursuing a $117 billion hostile takeover bid for Qualcomm, its U.S.-based rival whose chips are omnipresent in U.S. telecommunications infrastructure, including consumer devices like smartphones and tablets. As part of its hostile bid, Broadcom nominated its own slate of six directors who were to be voted on at Qualcomm’s annual stockholders meeting, originally scheduled for March 6th. However, earlier this week the Committee on Foreign Investment in the United States (CFIUS) announced that it “issued an interim order to Qualcomm directing it to postpone its annual stockholders meeting and election of directors by 30 days. This measure will afford CFIUS the ability to investigate fully Broadcom’s proposed acquisition of Qualcomm.” Continue Reading

FCC Proposes Expedited Treatment For New Technologies

“Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road” – Stewart Brand

Last week, the FCC released a Notice of Proposed Rulemaking (NPRM) proposing guidelines and procedures designed to “breathe life” into Section 7 of the Communications Act. A somewhat obscure part – or, as Chairman Ajit Pai prefers, the “neglected stepchild” – of the Communications Act, Section 7 requires the FCC to make a public interest determination on proposals for new technologies or services within one year. Although a one-year timeframe may seem like quite a lengthy period for regulatory approval, it represents an increase to warp speed for an FCC that sometimes can take many years to approve challenging new technologies.

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Tracking Trends in CFIUS Review Process Based on Recently Released 2015 Annual Report

Last month, the Committee on Foreign Investment in the United States (“CFIUS”) released its annual report to Congress for 2015 (the “2015 Annual Report”) and its cumulative table summarizing foreign investment activity from 2014 through 2016 (the “Cumulative Summary Table”). These documents reflect a substantial increase in the number of CFIUS filings in recent years and an increase in the percentage of CFIUS Notices that have been subject to an investigation process. The Report also reflects a new focus at CFIUS on the national security risks associated with data breaches affecting U.S. citizens’ personal information. Continue Reading

You Can’t Always Get What You Want—Second Circuit Affirms Parties Can Bargain Away TCPA Right To Revoke Consent To Automated Calls

As the Rolling Stones famously sing, “You can’t always get what you want.” And in the ever treacherous world of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., the Second Circuit has ruled that means a party to contract cannot unilaterally revoke consent to receive automated calls. Continue Reading

Dish Network to Dish Out $341M for TCPA Violations

Two recent judgements against Dish Network LLC (“Dish”) for violations of the Telephone Consumer Protection Act (TCPA) and similar state and federal laws demonstrate the significant liability companies may face based on the actions of their third-party contractors. Dish has been ordered to pay a total of approximately $341 million in two separate federal court actions related to TCPA violations committed by its marketing service providers. Both cases underscore the importance of maintaining strong vendor oversight in the highly regulated telemarketing industry. Continue Reading

TCPA Update: FCC Seeks Guidance on Proposed Robocall-Blocking Rule

Under new Chairman Ajit Pai’s leadership, the Federal Communications Commission (the “Commission”) is taking its first steps toward reforming its rules interpreting the Telephone Consumer Protection Act (“TCPA”). On Wednesday, May 17, the Commission published a Notice of Proposed Rulemaking (“NPRM”) for a proposed rule that would allow all voice service providers – including wireless providers and VoIP providers – to block illegal robocalls before they reach consumers. Comments on the NPRM are due by July 3, 2017, and Reply Comments are due by July 31, 2017. Continue Reading

FCC Vows It’s Never Gonna Give Up On Bridging Digital Divide: Opens Rulemakings To Promote Access To Broadband Infrastructure

At the end of March, new FCC Chairman Ajit Pai branded April “Infrastructure Month.” He paired this declaration with the announcement of a comprehensive agenda aimed at tackling a host of infrastructure-related challenges seen as critical to the deployment of high-speed broadband Internet access and bridging the digital divide. The FCC implemented the first steps of the Chairman’s infrastructure agenda yesterday, adopting proposed rulemakings intended to decrease regulatory barriers confronted by wireline and wireless providers seeking to deploy and operate broadband networks. Continue Reading

ExteNet v City of Houston: Who pays for access to Texas rights-of-way?

On April 13, 2017, the Texas Public Utilities Commission will hear oral arguments on the issue whether companies with certificates of public convenience and necessity from the Commission may place their facilities in local rights-of-way and provide wireline backhaul and Distributed Antenna Systems (DAS) service without additional local authority or the obligation to pay fees.   DAS providers say “yes” while local governments contend that such companies must negotiate separate license agreements and fees with individual cities to access their rights of way.  The Commission will be considering the recommendation of two Texas administrative law judges to side with the companies.

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FCC Issues New Privacy Rules for Internet Service Providers: Safeguarding Consumers or Lulling Them Into A False Sense of Privacy?

Last Thursday, in a vote split along party lines, the Federal Communications Commission (“FCC”) approved a new regulatory regime staking its claim to privacy regulation of both fixed and mobile Internet service providers (“ISPs”) like Comcast, Verizon, and AT&T.  The FCC’s rules follow its decision in the Open Internet Order, released last year and analyzed here, to classify broadband Internet access service as a common-carrier telecommunications service.  The FCC’s new rules are intended to give consumers control over the ways in which ISPs use and share their customers’ private information.  While the FCC has yet to release its Report and Order, the FCC’s Fact Sheet and statements by the commissioners indicate that the new privacy rules in many respects track the proposed rules the FCC put forward earlier this year, which seek to make the FCC the “toughest” privacy regulator in the Internet ecosystem by imposing on ISPs significantly more onerous and restrictive requirements for use and collection of consumer data than the Federal Trade Commission (“FTC”) imposes on its non-ISP competitors.

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