Today, the FCC’s (“Commission”) Wireline Competition Bureau released a Declaratory Ruling (“Order”) imposing new requirements on originating carriers to police the actions of downstream providers that are blocking or otherwise restricting calls terminated by rate-of-return carriers serving rural areas. These requirements create potential liabilities for carriers who know or should know that calls are not being completed to certain areas and require that originating carriers take certain steps to prevent these actions.
Background: Noting the increased number of complaints lodged by rate-of-return carriers serving rural areas, the Order reminds carriers of the Commission’s prohibition on carriers’ blocking, choking, reducing or otherwise restricting traffic, including VoIP-PSTN traffic, and clarifies several statutory provisions that may be violated for those types of activities.
Unjust or Unreasonable Practices: The Order clarifies that a carrier “that knows or should know that calls are not being completed to certain areas, and that engages in acts (or omissions) that allow or effectively allow these conditions to persist, may be liable for a violation of section 201 of the Act.” Further, a violation may be found if a carrier fails to correct the problem or fails to ensure that intermediate providers, least-cost routers, or other entities acting for or employed by the carrier are performing adequately. This is particularly the case when the problems are brought to the carrier’s attention by customers, rate-of-return carriers serving rural areas or others, and the carrier nevertheless fails to take corrective action that is within its power. If a carrier continues to hand off calls to agents, intermediate providers, or others that a carrier knows are not completing a reasonable percentage of calls or are otherwise restricting traffic (e.g., through impaired service quality), that would be considered an unjust or unreasonable practice.
False or Misleading Information: The Order also concludes that practices by common carriers that deceive or mislead customers are unjust and unreasonable. As an example, the Commission describes a practice where a customer hears an intercept message indicating that the call cannot be completed because the number is out of service or not reachable when in fact the number is in service and is reachable.
Role of Agents: The Order also notes that carriers are responsible for the acts of their agents. Thus, a carrier is responsible for the acts of its underlying provider engaging in unjust or unreasonable practices, such as blocking, choking or otherwise restricting traffic, if that underlying provider is an agent of the carrier.
Enforcement: The Order provides that a carrier engaged in any of the prohibited activities may be subject to an enforcement action, including cease-and-desist orders, forfeitures and license revocations, which could include a forfeiture of up to $150,000 for each violation or each day of a continuing violation, up to a statutory maximum of $1.5 million for a single act or failure to act.
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This article was originally published by Bingham McCutchen LLP.