The Consumer Financial Protection Bureau filed a complaint and proposed consent order against PayPal in U.S. District Court in Greenbelt, Maryland, Tuesday, for “illegally signing up tens of thousands of consumers for its online credit product, PayPal Credit,” formerly known as Bill Me Later, CFPB Director Richard Cordray said about the complaint. CFPB alleges PayPal “lured in consumers to this product with deceptive advertising, signed up people without them knowing it, and then mishandled billing disputes when they arose,” Cordray said, which violates the Dodd-Frank Act. “This kind of conduct has no place in the consumer financial marketplace,” he said. Under the proposed consent order, PayPal would pay $15 million in consumer redress, a $10 million penalty and be required to improve disclosures and procedures, a CFPB news release said. Online shopping and the financial products that make it possible are great, but financial services providers need to ensure people are treated fairly and according to the law, Cordray said. "PayPal Credit takes consumer protection very seriously," a PayPal spokeswoman said. "We continually improve our products and enhance our communications to ensure a superior customer experience," she said. "Our focus is on ease of use, clarity and providing high-quality products that are useful to consumers and are in compliance with applicable laws."
Voice Communication Exchange Committee founder Daniel Berninger asked the U.S. Court of Appeals for the D.C. Circuit Tuesday to stay the FCC net neutrality order that reclassified broadband Internet access as a Title II telecom service. Berninger said the entire order should be stayed because it "threatens his livelihood," which is "predicated on the ability to design, develop, and deploy services that are not subject to regulation by the FCC under Title II -- an ability that will be forever lost if the order takes effect." Berninger asked the court to act before June 12, the order's effective date, or as soon thereafter as practical. Major telco and cable groups asked the D.C. Circuit last week to stay the order's broadband reclassification and its Internet conduct standard but not its net neutrality rules barring Internet blocking, throttling and paid prioritization (see 1505130049). A D.C. Circuit panel asked the FCC to respond to that petition by noon Friday and for the telco/cable petitioners to reply by May 28. Those petitioners Tuesday opposed a motion by intervenors, including the National Association of State Utility Consumer Advocates and Public Knowledge, to supplement the FCC response to the stay with their own opposition as "unfair to petitioners" due to page limits.
AT&T CEO Randall Stephenson urged the FCC to approve AT&T's proposed buy of DirecTV "promptly and discussed peering and interconnection issues raised in the proceeding," in a conference call with FCC Chairman Tom Wheeler Thursday, said an ex parte letter posted Monday to docket 14-90. It provided no more details. At a recent meeting with FCC staffers, Cogent, Dish Network, Free Press, Public Knowledge and the New America Foundation’s Open Technology Institute asked the FCC to impose certain conditions -- including on stand-alone broadband, interconnection, data caps and net neutrality -- to address various alleged harms if it decides to approve the deal, said an ex parte filing (see 1505130042). Comptel recently backed Cox Communications' proposal to restrict AT&T/DirecTV from entering into video programming contracts that include unreasonable volume discounts, and the American Cable Association's proposal to prevent the combined company from interfering with rates, terms and conditions that video programmers offer competitors. Comptel also proposed, among other things, that AT&T/DirecTV be (1) required to file quarterly reports on its programming contracts, (2) prohibited from charging terminating access fees or using broadband data caps in a way that could harm online video distributors, and (3) required to comply with Sections 251 and 252 of the Communications Act both during and after its wireline transition to IP. In addition, New Networks Institute and Teletruth petitioned the FCC to delay acting on AT&T/DirecTV and investigate whether AT&T committed perjury in its representations to the agency regarding its broadband deployment. Monday, the FCC informal 180-day shot clock was still halted on Day 170 after the agency decided on March 13 to await a ruling by the U.S. Court of Appeals for the D.C. Circuit regarding video programming confidential information. The court May 8 vacated an FCC order that would have let participants in the commission's AT&T/DirecTV transaction proceeding review confidential programming and retransmission consent contract data, after finding it was “substantively and procedurally flawed,” in CBS et al. v. FCC (see 1505080053).
While a filing by AT&T and small carriers last week on FCC designated entity rules made some constructive suggestions (see 1505110048), the FCC still should use the program to encourage new market entrants to bid for spectrum, Public Knowledge said in a filing posted Monday in docket 12-268. “For example, if Apple wanted to offer wireless service over exclusive licensed spectrum with its new ‘Apple Watch,’ or Intel wanted to offer a unique private network for IoT devices, it would need to rely entirely on the networks and spectrum held by others,” PK said. Buying spectrum to launch a new network would cost billions of dollars, the group said. “While giant companies might be able to afford such expenditures, it is not rational to expect them to do so -- or even plan to do so in the current environment.” PK said it makes sense to encourage smaller carriers to also buy spectrum. “These providers need an expanded bidding credit so that they may acquire the necessary spectrum to continue to serve their customer base, and to hopefully grow regionally,” PK said.
The FCC Wireline Bureau is seeking comment on Clearwire's application to discontinue digital voice VoIP services in Chico and Redding, California, and Reno/Carson City, Nevada. Comments are due June 1, and the application will be granted automatically June 16 absent FCC action halting it, said a bureau public notice on docket 15-117 in Monday's Daily Digest. Clearwire indicated its parent Sprint, as part of its 4G LTE upgrade, is shutting down the towers that support the Clearwire broadband service over which it provides the affected VoIP offering, which has only about 95 customers, the notice said. It said Clearwire reported that all the customers were notified and alternative voice services are available.
The Multicultural Media, Telecom and Internet Council (MMTC) and 35 other groups sent a letter to the FCC calling for “immediate and comprehensive reform” of the Lifeline program to also pay for Internet access, MMTC said Friday in a news release. “A bi-partisan effort is required to modernize this program so that millions of Americans can realize the full potential of the digital broadband age, and obtain this benefit in an efficient and effective program,” the letter said. “Successfully upgrading the 30-year-old Lifeline program will require policymakers to embrace a new approach,” said President Debra Berlyn of Consumer Policy Solutions, one of the groups that signed the letter. “Today, too many people have to choose between broadband and other services, and it’s the time to make access more affordable and accessible,” said Rainbow PUSH Public Policy Institute Executive Director Steven Smith. Industry and FCC officials have predicted that Lifeline changes could headline the FCC’s June 18 open meeting (see 1505010051). FCC Commissioner Mignon Clyburn has been a major advocate of expanding the Lifeline program and has called for launch of a rulemaking before the start of the summer (see 1503130058).
The non-profit Technology Business Management Council established a Commission on IT Cost Opportunity, Strategy and Transparency (IT COST) Wednesday to “define a set of recommendations and best practices for Federal departments and agencies to transparently measure and communicate their IT costs so that Federal CIOs [chief information officers] are better equipped to govern their IT spending and support agency missions with limited resources,” a news release said. The federal government spends more than $78 billion on technology per year, but each agency uses its own standards to measure, benchmark and communicate the value of its technology investments, the release said. Lack of standardization creates numerous challenges and complications, it said. CIOs from the departments of Health, Transportation, Interior, Commerce and Agriculture are participating in the first IT COST Commission meeting, to be held in June. CIOs from Cisco, Hewlett-Packard and DirecTV are also participating. The goal is to release a report in early 2016 outlining a series of recommendations to reduce waste and increase efficiency, demonstrate cost, quality and value of IT spend, and aid in the implementation of the new Federal IT Acquisition Reform Act, the release said.
Hughes Network Systems lobbied the FCC to back its proposal for Connect America Fund Phase II recipients of USF money for broadband to meet a test that doesn't favor any platforms while ensuring the services have low latency. It would measure if the services “'offer sufficiently low latency to enable use of real-time applications, such as VoIP' while remaining consistent with the Commission’s commitment to technological neutrality," the satellite broadband provider said in a filing posted Tuesday in docket 10-90, referring to its March 27 proposal in that docket. During a lobbying meeting last week with Wireline Bureau front-office and other staff, a lawyer at Hughes parent EchoStar, which shares with Dish Network Charlie Ergen as chairman and a top shareholder, also asked the agency to "without delay" adopt Remote Areas Fund rules, the newer filing said. After telcos decide whether and how much CAF Phase II funds to get out of a total of up to $10 billion over six years, the FCC can award USF money to other companies (see 1504290066).
A group of startup companies urged the FCC to modify rules for the TV incentive auction by increasing the amount of reserve spectrum to be sold to 40 MHz. Carriers with more than 45 MHz of low-band spectrum in a market will be restricted to buying only unreserved spectrum under rules approved last year (see 1405160030). “We are entrepreneurs, technologists, investors, and innovators,” the Wednesday letter said. “Through the incentive auction, we have a rare opportunity to increase innovation and investment in U.S. mobile broadband by allowing multiple new competitive carriers to access the spectrum they need to compete with the dominant incumbents.” Startups signing the letter were 1226 Digital, 1991 Management Co., Bassline, Bento for Business, Biggerpan, Bizzy, Castr, Consumerproof, Convo, Darwin Reactive, Dialect, Electric Imp, Fligoo, Fytns, Hattery Labs, InMarkit, Keen IO, Metapattern, Neighborland, Olio Devices, Pick1, Plickers, Poacht, ReaMetrix, Skuchain, SportsFeed, Tab, Tahoe Mountain Lab and Zenput.
Various telecom and cable groups along with carriers asked the U.S. Court of Appeals for the D.C. Circuit to stay key parts of the FCC net neutrality order, pending further review, or at least expedite consideration of their underlying legal challenges. In a joint motion Wednesday, the American Cable Association, AT&T, CenturyLink, CTIA, NCTA, USTelecom and the Wireless Internet Service Providers Association asked the court to stay the order’s reclassification of broadband Internet access under Communications Act Title II and its Internet conduct standard. They asked the D.C. Circuit to act before June 12, the order’s effective date, and if the court couldn’t do that, they asked for an administrative stay. NCTA and USTelecom noted that they didn't seek a stay halting net neutrality rules that prohibit Internet blocking, throttling and paid prioritization. The petitioners said the FCC was asserting “unprecedented regulatory power over the Internet” in a “sharp about-face” that “arrogated to itself breathtaking authority over the most transformative technology in living memory.” By reclassifying broadband Internet access as a Title II telecom service, the FCC was subjecting broadband to a regime designed for railroads, not social networking and streaming video, they said. Petitioners said they were likely to succeed on the merits, arguing that broadband fit squarely under the 1996 Telecom Act’s “information service” definition that can’t be regulated as common carriage under Title II and that expressly includes a service “that provides access to the Internet.” Noting the 2005 Supreme Court Brand X ruling, the petitioners said, “[B]y classifying Internet access as exclusively a telecommunications service with no information service offering, the FCC has adopted a position that all nine Justices in Brand X rejected. And it has turned Justice [Antonin] Scalia’s analogy on its head. Where Justice Scalia saw the relevant offerings as making pizza (information service) and delivering it (telecommunications service), the FCC pretends the pizzeria offers only delivery, and does not make pizza at all.” The petitioners said Title II was “doubly unlawful” for wireless, given its statutory protections from common-carrier regulation. They said the FCC, “in its headlong rush to implement this regulatory sea change at the President’s urging -- committed a string of glow-in-the-dark APA [Administrative Procedure Act] violations, any one of which would suffice to invalidate the order.” Shifting to alleged harms, the petitioners said “public utility regulation” of the Internet would impose “immense burdens and costs” on petitioners and their members, inviting a “torrent of enforcement proceedings and litigation,” and forcing “providers to undertake costly reviews of countless business practices.” Without a stay, providers face many millions of dollars in unrecoverable losses,” making it in the public interest to block the broad regulatory regime before it takes effect, they said. The agency is confident the D.C. Circuit will deny the stay request, a spokeswoman emailed us. "The Open Internet Order provides clear and defensible rules of the road that will ensure enforceable protections for consumers and innovators online. Petitioners have not demonstrated that they will suffer irreparable injury if the order takes effect, and the public interest clearly favors allowing the Open Internet Order to take effect on schedule.”