The Regulatory Mix, TMI’s daily blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Briefing.

FCC Open Internet Enhanced Transparency Rule Small Business Exemption Developments

•  The American Cable Association, Competitive Carriers Association, NTCA – The Rural Broadband Association, and the Wireless Internet Service Providers Association

Filed a Petition for Stay of the January 17, 2017, effective date of the enhanced transparency requirements adopted in the FCC’s 2015 Open Internet Order for small broadband Internet access service (BIAS) providers.  TMI Briefing Service subscribers see Briefing dated 12/19/16.  The Petitioners ask that the stay be permanent, or continue until such time as the FCC completes a rulemaking proceeding to determine whether and to what extent the small business exemption should be reinstated and to whom it should apply. If the requested stay is granted after January 17, 2017, they ask the FCC to make it clear that small BIAS providers will not face liability or enforcement action for failing to comply with the enhanced transparency obligations in the interim.

They point to an order circulating at the FCC as well as a December 19, 2016, letter from Commissioners Pai and O’Rielly stating that  they support a permanent exemption and “would not support” any adverse actions against small business providers for supposed non-compliance.  (Legislation addressing this issue passed the House of Representatives earlier this month.  See the Regulatory Mix dated 1/11/17).

•  Commissioner Clyburn Support For Open Internet Small Business Exemption

Separately, Commissioner Clyburn issued a statement affirming her support for a continued exemption from the enhanced transparency rule for small providers.  She said, in part: “It pains me to report today, that not only have those enhancements gone into effect for all providers, but the Order which would have protected small providers from this enhanced requirement, failed to get adopted by this body…. This ‘flash cut’ is unfair to the smallest operators, the very ones who believed that our government would protect them from undue burdens.  Today, we failed as a Commission, but I am hopeful we will rectify that failure soon.” 

• Mobile Broadband Provider Petition

In addition, the CTIA and Competitive Carriers Association filed a motion for stay of the rule for all mobile broadband Internet access service providers. They argued that the rule should not go into effect because the Office of Management and Budget’s (OMB) approval of the rules was premised in part on a 2016 staff Guidance that pending applications for review show is unreasonable and unlawful.  Additionally, petitioners point to OMB’s “unusual action” requiring the FCC to take additional steps to evaluate numerous aspects of the enhanced transparency rule (including mobile disclosures) as further calling into question reliance on the staff Guidance.

FTC Complaint Against Qualcomm Over Cell Phone Semiconductor Device

The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products.  (Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products.)  The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.  The complaint alleges that Qualcomm: (1) maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms: (2) refuses to license standard-essential patents to competitors; and (3) extracted exclusivity from Apple in exchange for reduced patent royalties.