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The Washington Monitor Page 6 requirement is set forth in Commission rule section 27.20. Because the DTV transition must be completed by February 17, 2009, the quarterly reporting requirement extends only through the first quarter of 2009 (the last quarter that would cover the DTV transition). The first report that must be filed by a licensee is the quarterly report of the first quarter in which that licensee obtains a 700 MHz license authorization that was sold in Auction 73. The quarterly reports are due no later than the following dates: • 2 nd Quarter 2008 (covering April-June) – Due no later than July 10, 2008 • 3 rd Quarter 2008 (covering July-Sept.) – Due no later than October 10, 2008 • 4 th Quarter 2008 (covering Oct.-Dec.) – Due no later than January 12, 2009 • 1 st Quarter 2009 (covering Jan.-March) – Due no later than April 10, 2009 If the license is issued prior to July 1, 2008, the first report must be filed no later than July 10, 2008. The reporting requirements terminate once the licensee has filed its quarterly report covering the first quarter of 2009. Specifically, each 700 MHz licensee must file a quarterly report with the Commission indicating whether, in the previous quarter, it has taken any outreach efforts to educate consumers about the DTV transition and, if so, what specific efforts were undertaken. Each licensee is obligated to file a quarterly report regardless of whether it has in fact taken any outreach efforts during the previous quarter or provided 700 MHz service. Public Notice, MB Docket No. 07-148, DA 08-1521, released June 26, 2008. FCC ORDERS VERIZON TO CEASE AND DESIST RETENTION MARKETING DURING NUMBER PORTING INTIATED BY COMPETING CARRIER REQUESTS The FCC has rejected the Enforcement Bureau’s April 11, 2008 recommendation and found that Verizon violates section 222(b) of the Communications Act by using, for customer retention marketing purposes, proprietary information of other carriers that it receives in the local number porting process. Verizon was ordered to immediately cease and desist from such unlawful conduct. It is reported in the trade press that Verizon will appeal the decision. While the number porting process was pending, Verizon was contacting porting out customers and encouraging them to remain with Verizon, offering price incentives such as discounts and American Express reward cards. If successful in persuading a customer to cancel his or her order with the new service provider, Verizon canceled its internal porting service order and issued a “jeopardy notice” to the provider that submitted the port request. Verizon also put the new provider’s port request “into conflict” by sending a conflict code to the Number Portability Administration Center. If the new service provider could persuade the customer to switch after all, it could either seek resolution of the conflict code or, what is
The Washington Monitor Page 7 much more common, submit a new Local Service Request to Verizon. Section 222(b) provides that “[a] telecommunications carrier that receives or obtains proprietary information from another carrier for purposes of providing any telecommunications service shall use such information only for such purpose, and shall not use such information for its own marketing efforts.” The Commission found that a telecommunications carrier violates section 222(b) when it (a) receives or obtains proprietary information; (b) from another carrier; (c) for purposes of providing any telecommunications service; and (d) fails to use such information “only” for such purpose, or uses the information “for its own marketing efforts.” Verizon’s retention marketing program thus was found to violate section 222(b) of the Act. The proprietary information obtained by Verizon consisted of knowledge that a competing carrier had persuaded a particular Verizon customer to switch to a particular competing carrier’s voice service on a particular date. This information cannot be used by Verizon to engage in retention marketing. The Commission found that when a competitive carrier submits a Local Service Request (LSR) to Verizon, Verizon receives the LSR “for purposes of providing any telecommunications service” within the meaning of section 222(b). That conclusion, combined with the conclusion reached above about the LSR’s proprietary nature, means that section 222(b) forbids Verizon from using the information in the LSR for its own marketing efforts. The Commission disagreed with the argument that Local Number Portability (LNP) is not a telecommunications service because it does not constitute transmission, and because it is not offered for a fee. Rather, number portability is a wholesale input that is a necessary component of a retail telecommunications service. Services or functions that are “incidental or adjunct to common carrier transmission service” – i.e., they are “an integral part of, or inseparable from, transmission of communications” – should be classified as telecommunications services. LNP similarly constitutes such an “adjunct to basic” service. As a result, Verizon’s provision of LNP was found to be a telecommunications service for purposes of section 222(b). Verizon lost the argument that affiliates of complainants Bright House Networks, LLC, Comcast Corporation and Time Warner Cable, Inc. do not provide telecommunications services. The Commission found that the companies are telecommunications carriers and provide telecommunications services for purposes of the privacy protections provided by Section 222(b). This does not mean that they are “telecommunications carriers” for purposes of all other provisions of the Act. Those determinations are left for another day. Commission Chairman Martin disagreed with the holding that the complainants are “telecommunications carriers” for one purpose and not for another, such as complying with the obligations of “telecommunications carriers.” He expressed concern that the “decision promotes regulatory arbitrage and is outcome driven; it could thwart competition, harm rural America, and frustrate regulatory parity.” Noting that cable companies engage in aggressive
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