Net neutrality dominated the House Communications Subcommittee hearing on four legislative measures Tuesday. Some members wondered about revising bills to achieve bipartisan consensus, but they largely showcased partisan divide in how they interpreted possible burdens from the FCC's order. The two heavily debated measures were the No Rate Regulation of Broadband Internet Access Act (HR-2666) and a discussion draft of the Small Business Broadband Deployment Act, which would codify the temporary exemption small businesses have from the order's enhanced transparency requirements.
Large telcos said the FCC should close or delay a probe of their special access terms and conditions that the companies said were lawful. AT&T, CenturyLink, Frontier Communications and Verizon made lengthy filings in docket 15-247 defending their special access pricing practices, which often contain discounts in exchange for volume or term commitments. The Bells/ILECs were responding to a Wireline Bureau tariff investigation of their special access contracts (see 1510160060), which rivals allege are anticompetitive and “lock up” much demand for traditional business data services (see 1510080051). Competitors continued to criticize incumbent telco practices Monday.
Henry Schein Practice Solutions will pay $250,000 to settle FTC allegations the provider of office management software to dental practices "falsely advertised the level of encryption" to protect patient data, the agency said Tuesday in a news release. The commission voted 4-0 to issue the administrative complaint. The FTC said it will publish a description of the consent agreement, which will be subject to public comment through Feb. 4, in the Federal Register soon. The agency alleged the company marketed "deceptive claims" for two years that its Dentrix G5 software provided industry-standard encryption of sensitive patient data as required by the Health Insurance Portability and Accountability Act (HIPAA). The FTC said the company was aware its software "used a less complex method of data masking to protect patient data than Advanced Encryption Standard," which is the recommended industry caliber. “If a company promises strong encryption, it should deliver it," said Consumer Protection Bureau Director Jessica Rich. Under the settlement, Schein "will be prohibited from misleading customers about the extent to which its products use industry-standard encryption or the extent to which its products help ensure regulatory compliance or protect consumers’ personal information," the FTC said. Schein must also notify all affected customers that the software doesn't provide industry-standard encryption. The company disagreed with the commission about how "we used the word 'encrypted' in Dentrix G5 marketing from early 2012 to January 2014," and the "product works, and works well," emailed a Schein representative Tuesday. "We have always communicated to customers that the ultimate responsibility for data security and HIPAA compliance resides with each practice." The settlement doesn't "represent an admission of wrongdoing regarding the Dentrix product," said the representative. "We made a decision to settle with the FTC to avoid long and costly litigation," she said. "We continuously upgrade and improve our product and service offerings, and advise our customers that they also need to take steps to protect the security of their data."
Attorneys for Sandwich Isles Communications cited the "critical importance of federal high-cost support" for SIC to operate in the "very high-cost" Hawaiian Home Lands, in a meeting with the FCC Office of General Counsel staff on the "status of high-cost support disbursements" to the company. The disbursements were the subject of a petition for emergency relief filed by SIC earlier this month seeking rescission of an FCC directive suspending high-cost program support for the company -- SIC said in a letter posted by the commission Tuesday in docket 10-90. They also said SIC is willing to cooperate with an ongoing Universal Service Administrative Company audit and that the audit needs to be completed "as soon as possible," citing the "need for resolution of the suspension" affecting the company's high-cost support during July through December of this year and the need for resolution of state certification challenges that could "potentially" affect its 2016 high-cost support, the letter said.
The Pennsylvania Public Utility Commission moved to withdraw a petition that had asked the FCC to allow the PPUC to adjudicate an intercarrier compensation dispute between AT&T and Core Communications over dial-up Internet traffic. The PPUC cited a recent ruling of the 3rd U.S. Circuit Court of Appeals, which granted a PPUC appeal and overturned a U.S. district court ruling that sided with AT&T. “The Third Circuit decision addressed and resolved the controversy discussed in the petition, thereby rending the instant Petition moot,” the PPUC said in a request Wednesday in FCC docket 14-70. The PPUC had ruled in Core’s favor on its efforts to bill AT&T for terminating phone calls from AT&T’s customers to Core’s ISP customers from 2004 to 2009. Asserting, among other arguments, that dial-up Internet traffic was the exclusive domain of the FCC, AT&T subsequently persuaded the U.S. District Court for the Eastern District of Pennsylvania to grant it summary judgment on the grounds that the PPUC lacked jurisdiction. The PPUC then appealed to the 3rd Circuit and filed its petition at the FCC. The 3rd Circuit ruled in favor of the PPUC on Nov. 25. “Because we find that the FCC’s jurisdiction over local ISP-bound traffic is not exclusive and the PPUC orders did not conflict with federal law, we will vacate the judgment of the District Court and remand this case for entry of judgment in favor of Core and the members of the PPUC,” a three-judge 3rd Circuit panel said in its opinion, which also found AT&T's other arguments unconvincing.
Initial comments are due Jan. 19 and replies Feb. 1 on the FCC's Further NPRM on inmate calling services (ICS), said a Wireline Bureau public notice Tuesday in docket 12-375. The commission is seeking comment "on promoting additional competition in the ICS marketplace, new technologies being used to deliver inmate communications, the collection of additional data, contract filing requirements, third-party transaction fees, and international calling." The PN also noted the effective dates for rules in an ICS order that also was approved in October (see 1510220059): prohibitions against entering into new contracts, or negotiating amendments to existing contracts, prior to the order's effective date, took effect Dec. 18; rate caps and fee restrictions will become effective March 17, other than those for jails, which will become effective on June 20; rules and requirements regarding Paperwork Reduction Act burdens will take effect upon Federal Register publication of an Office of Management and Budget approval notice; and all other requirements of the order take effect Jan. 19. Global Tel*Link Tuesday asked the FCC to stay the effectiveness of the rate caps in the order, pending further judicial review (see 1512220055). "They are just getting their ticket punched so they can seek a judicial stay," Andrew Schwartzman, senior counselor at the Georgetown Institute for Public Representation, told us Wednesday.
The Democratic presidential campaign of Sen. Bernie Sanders, I-Vt., may not feature telecom as a centerpiece, but Sanders’ signature on detailed letters, a court brief and legislation creates a nuanced portrait of progressive stances across recent months. The emerging profile gives a more granular showcase of the presidential candidate’s telecom and media policy priorities -- on issues ranging from set-top boxes to inmate calling to net neutrality -- than is available for other contenders for the presidency, Republican or Democrat. Sanders trails former Secretary of State Hillary Clinton, who in broad strokes has outlined similar priorities as Sanders. Both have expressed interest in intense federal investment in broadband infrastructure, strong net neutrality rules and strong antitrust enforcement.
The lack of law or regulatory body governing elections and potential conflicts of interest of candidates for public office is a big reason the Arizona Corporation Commission (ACC) chairwoman is resigning from her position in January, experts said Tuesday. The conflict of interest laws aren’t the problem, though -- to be eligible for state office, public officials must follow two different statutes. While ACC Chairwoman Susan Bitter Smith (R) filed the correct paperwork saying she's the CEO of Southwest Cable Communications Association, an association of cable companies regulated by the ACC, before running for office, no one in power caught the conflict until a complaint was filed by attorney Tom Ryan. “We have a secretary of state … she’s just a filing repository,” Ryan said in an interview Tuesday. “She basically acts like a clerk at the checkout stand at your local grocery store.”
The FCC fined Purple Communications $11.94 million for "improperly billing" the Telecommunications Relay Service Fund, which subsidizes services for persons with speech and hearing disabilities. "The Commission found that Purple sought and received millions in reimbursements from the TRS Fund and failed to reasonably verify over 40,000 'users' with obviously false names, including gibberish and profanities," an FCC news release said Friday. "As a result of Purple’s inadequate verification procedures, 'users' could have registered with names like ‘sdfsdf cicwcicw,’ 'Myname Yourname,' or 'Lot$a Money,' for which Purple could be reimbursed," it said. Enforcement Bureau Chief Travis LeBlanc said any improper billing of a federal program is unlawful, "but it is particularly unconscionable when that money is diverted from providing service to consumers with real speech or hearing disabilities who need to be able to make phone calls." The commission found no reason to cancel or reduce a proposed penalty in a notice of apparent liability for forfeiture after reviewing Purple's response, an FCC order said. Commissioner Michael O'Rielly concurred in the action. A Purple representative had no immediate comment.
Vizio’s initial public offering filings at the SEC have given fodder to a second federal complaint in California in three weeks seeking class-action status on allegations that the viewer-tracking feature on Vizio smart TVs violates the federal Video Privacy Protection Act. The latest complaint, filed Wednesday in U.S. District Court in Santa Ana, California, differs from the first (see 1512060005), in that it names Cognitive Media Networks as a second defendant.