On June 17, the FCC released a Notice of Apparent Liability finding that AT&T Mobility “apparently willfully and repeatedly” violated the FCC’s Open Internet transparency rule by misleading customers about its unlimited mobile data plans.  The FCC proposed a $100 million fine for the alleged violations. This case sends a strong message to ISPs about the importance of maintaining accurate and up-to-date disclosures that are consistent with marketing materials.

Background.  The FCC adopted its transparency rule in the 2010 Open Internet Order, requiring all providers of broadband Internet access service, whether fixed or mobile service, to publicly disclose information about their network management practices, performance characteristics, and commercial terms of service.  That rule took effect in November 2011 and remains in effect now. 

AT&T began offering unlimited mobile data plans in 2007.  AT&T stopped offering the unlimited plan in 2010 but grandfathered in existing customers allowing them to renew their plans, which AT&T continued to call “unlimited.”  In 2011, AT&T introduced a Maximum Bit Rate (“MBR”) policy, capping maximum data speeds for “unlimited” customers after they used a set amount of data within a billing cycle, throttling connection speeds once customers reached that cap.  The speeds were slower than advertised for the remainder of the customer’s billing cycle. 

AT&T’s Disclosures.  According to AT&T, it disclosed the MBR policy in a press release, bill inserts, a “Broadband Information” page on its website, point-of-sale information that pointed customers to that webpage, and its service contract.  AT&T also claimed to have sent emails to heavy data users before the policy took effect and sent text messages to users nearing the data cap after the policy took effect.

FCC Investigation and Notice of Apparent Liability.  After receiving customer complaints, the FCC investigated and found that AT&T apparently willfully violated the transparency rule in two ways.  First, AT&T apparently misled customers by inaccurately using “unlimited” to describe its plan.  The FCC argued that the “imposition of set data thresholds and speed reductions is antithetical to the term ‘unlimited.’”

Second, AT&T apparently failed to disclose the maximum speeds available under the MBR plan.  The FCC cautioned that the transparency rule requires broadband providers to disclose the “expected and actual access speed” of their services and faulted AT&T for failing to disclose that the MBR plan was “premised on clear and express speed reductions.”

The FCC also found AT&T’s various disclosures insufficient because so many customers complained, indicating that AT&T’s “disclosures apparently did not provide unlimited data plan customers with information sufficient to allow them to make informed decisions in purchasing or using their service.” 

Based on these apparent violations, the FCC proposed a $100 million fine—the largest in FCC history.  That amount is based in part on “the ill-gotten revenue AT&T earned from customers of its unlimited data plan.”  The FCC also required AT&T to take measures to “alleviate harm from the conduct” described in the Order.  AT&T has 30 days to pay or seek reduction or cancellation of the proposed forfeiture.

This case serves as a stark reminder for ISPs of the importance of maintaining accurate, up-to-date, and complete disclosures and ensuring that they are fully consistent with marketing materials.

If you have questions about the transparency rule or the Open Internet rules in general, please contact  Barbara Esbin at (202) 872-6811 or besbin@cinnamonmueller.com, Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com, or Scott Friedman or Jake Baldwin at (312) 372-3930 or sfriedman@cinnamonmueller.com or jbaldwin@cinnamonmueller.com.

FCC Bureau Reminds Tower Owners of Registration Rules

            On June 17, the FCC’s Wireless Telecommunications Bureau released a Public Notice reminding owners of towers and other antenna structures of their obligations to comply with the FCC’s antenna structure registration (“ASR”) rules.  The Bureau also cautioned that violations of these rules can result in fines and other enforcement actions.

FCC rules impose registration, notice, lighting and painting, reporting, and other compliance obligations on owners of antenna structures.  (For more on those obligations, see here.)  In reviewing recent ASR applications, the Bureau found several types of errors:

• Failure to obtain a No Hazard Determination from the FAA and register the structure before construction.
• Failure to notify the FCC within five days after completion of construction or dismantlement.
• Failure to comply with lighting and painting rules.
• Failure to accurately identify the height and location of the structure.

The FCC has also increased field inspections of antenna structures in recent years, fining several tower owners for violations including failure to properly paint, light, or mark towers, and failure to report lighting outages.  The Public Notice serves as an important reminder for tower owners to ensure compliance with all registration, notice, lighting and painting, reporting and other tower-related compliance obligations.

If you have questions about the FCC’s antenna structure rules, please contact Jake Baldwin or Scott Friedman at (312) 372-3930, jbaldwin@cinnamonmueller.com, or sfriedman@cinnamonmueller.com.

FCC Announces July 23 Effective Date of Order Extending HD Carriage Exemption

            On June 10, the FCC adopted an Order extending the must-carry HD exemption for small cable systems and modifying the class of systems eligible for the exemption.  Last week, the FCC released a Public Notice announcing the effective date of the Order as July 23, 2015.

            For more on the Order and the small system exemption, see here.  As a recap, the Order makes two significant changes to the current HD carriage exemption.

First, the Order revises the definition of a “small” cable system, limiting the size of cable systems eligible to those serving fewer than 1,500 subscribers (rather than 2,500) and not affiliated with an MVPD serving more than two percent (rather than 10 percent) of all MVPD subscribers.  Cable systems that met the previous definition of a small cable system but are no longer eligible for the exemption must come into compliance by December 12, 2016.  Systems that become ineligible after December 12, 2016 are expected to promptly come into compliance.

Second, while the FCC confirmed that small cable systems not offering any programming in HD are exempt from the HD carriage requirement, small cable systems that offer some HD programming will no longer be eligible for the exemption beginning December 12, 2016.  Once a system begins offering HD programming, it must notify all in-market broadcast stations carried on the system, and the FCC expects these systems to promptly come into compliance.

If you have any questions about broadcast station carriage or the must-carry HD exemption, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.