The FCC said Electronic Document Management System problems Wednesday developed after "update and security patches" were applied to computer systems last weekend. "While these patches were tested and monitored for any unintended side-effects to IT systems, apparently a side-effect of the update patches presented itself a few days later," a spokesman emailed. "Working with vendors and system experts, the team quickly developed, tested, and rolled out a draft fix that we believe corrected the issue that the update patch introduced."

The FCC should adopt further process changes that give commissioners more say over bureau-level items and curb delegated authority, Commissioner Mike O’Rielly said in a blog post Wednesday. O’Rielly wants FCC procedures changed so two commissioners can block an item from being approved under delegated authority, the blog post said. Chairman Ajit Pai already reversed some policies approved on delegated authority under former Chairman Tom Wheeler (see 1702030070), but O’Rielly’s ideas would make it harder for such approvals to happen over the objections of commissioners, the blog post said. “The Commission delegates way too many substantive decisions to Bureau staff, usurping the role and obligations of duly appointed and confirmed Commissioners,” O’Rielly said. Allowing one commissioner to block delegated items could be unwieldy and cause too many delays, O’Rielly said. “If a Commissioner can't convince at least one other to join their cause, we should move forward posthaste,” O’Rielly said. The process changes would also include a requirement that commissioners receive 48-hours' notice before any item is decided under delegated authority, O’Rielly said. “This reasonable practice allows a sufficient timeframe for Commissioners to determine whether the proposed decision should be decided by the full Commission,” he said. Under the proposal, if two commissioners flag an item for removal from delegated authority, it should be voted by the full FCC within seven days or five business days to prevent undue delay, O’Rielly said. If the vote doesn’t happen in that time, the item would be approved by the full commission or released on delegated authority, O’Rielly said. “A requesting Commissioner that does not vote by the deadline risks the possibility that their failure to act would be deemed an approval and the item would be disposed of by the full Commission,” O’Rielly said. “Fixing the overuse of delegated authority should be high on our list of priorities as the new Commission examines internal process reform.”

A court agreed to an FCC request to hold in abeyance its review of a 2015 technology transitions order and a 2014 backup power order. The U.S. Court of Appeals for the D.C. Circuit issued a brief order (in Pacer) Tuesday granting an FCC motion -- which wasn't opposed by petitioner USTelecom -- and directing the commission to file status reports every 60 days starting April 24 in USTelecom v. FCC, No. 15-1414. The FCC sought the hold to give its new leadership time to decide on its course (see 1702070026). Then-Commissioner and now-Chairman Ajit Pai and fellow Republican Commissioner Mike O'Rielly dissented from the orders.

The FCC has a "laundry list" of ways to change course, many without notice and comment, said Wilkinson Barker attorney David Solomon, one of three former commission deputy general counsels speaking Wednesday on an FCBA panel. Beyond conducting new rulemakings, he said the commission can act on petitions for reconsideration or applications for review; issue declaratory rulings, policy statements, statutory interpretations, or other guidance; suspend enforcement proceedings or cancel pending notices of apparent liability and forfeiture; waive rules pending a rulemaking; or forbear from applying certain regulations. The agency can seek new public comment to build the record, said Solomon, who also was Enforcement Bureau chief. There's often interplay with the courts on recent decisions facing legal challenges, said Davis Wright attorney Peter Karanjia. He called it "pretty standard practice" for the FCC to file motions to hold a case in abeyance if there's a pending recon petition. The commission also can ask for a court remand, or even not defend prior decisions. He noted the FCC recently said it wouldn't defend parts of an inmate calling service (ICS) order; he called that "very unusual," but also said the circumstances were unusual, involving a 3-2 decision in which dissenting Republicans now are the majority, and a case that had been fully briefed. He said it was "interesting" that U.S. Court of Appeals for the D.C. Circuit Judge Laurence Silberman questioned at oral argument whether the FCC could, in effect, change ICS policy without going through notice and comment (see 1702060028). Karanjia said he wasn't sure there was any specific case law on the point: "So, we'll have to see." He said the FCC could issue a new declaratory ruling to reverse the 2015 broadband reclassification under Communications Act Title II, but it often "behooves" the commission to seek further public comment. Harris Wiltshire attorney Julie Veach, also a former Wireline Bureau chief, noted lawmakers could use the Congressional Review Act to undo the FCC's broadband privacy rules, appropriations "riders" or other targeted legislation to change agency policy, or simply pass new bills. She said recent FCC "information collections" are vulnerable, given the presidential change and Office of Management and Budget reviews under the Paperwork Reduction Act, which she said is a five-month process (including at the commission). When asked, no panelist commented on what net neutrality procedural path the FCC should pursue.

The FCC Disability Advisory Committee scheduled the first meeting of its second term March 21, the agency said Tuesday. The meeting will be 9 a.m.-1:30 p.m. in the Commission Meeting Room. This is the first DAC meeting under new FCC Chairman Ajit Pai. DAC members will discuss “(i) the roles and responsibilities of the Committee and its members; (ii) issues that the Committee will address; (iii) meeting schedules; (iv) issues to be assigned to each subcommittee; and (iv) any other topics relevant to the DAC’s work,” said a public notice.

Small entities can seek assistance on federal agency enforcement and compliance matters from the Small Business Administration's Office of the National Ombudsman, the FCC said in a news release Tuesday. The office provides various forms of assistance, including a one-page form letter to facilitate written comments on "any complaints, suggestions, or compliments concerning a federal agency's enforcement action," the commission said.

Verizon will buy Yahoo's operating business for $350 million less than Verizon's initial $4.83 billion offer and the companies "will share certain legal and regulatory liabilities arising" from the 2013 and 2014 data breaches that compromised a combined 1.5 billion Yahoo user accounts (see 1612150010), they said in a Tuesday statement. Under the amended deal, which is expected to close Q2, Yahoo will be responsible for 50 percent of cash liabilities incurred after non-SEC government investigations and third-party lawsuits related to the breaches are closed, the companies said. At least two dozen lawsuits have been filed against Yahoo after the company announced the breaches last year (see 1612230029) and lawmakers also are seeking answers (see 1702150070 and 1702100059). Yahoo would continue to be responsible for liabilities from shareholder suits and SEC probes, the news release said. The companies also agreed that the data breaches or any losses from them "will not be taken into account in determining whether a 'Business Material Adverse Effect' has occurred or whether certain closing conditions have been satisfied." Verizon Executive Vice President Marni Walden said the amended terms are "fair and favorable" for shareholders and the deal still makes "strategic sense." The company is seeking to increase its advertising business (see 1607250016). Yahoo CEO Marissa Mayer said the deal will "accelerate" the company's mobile operating business and separate its "Asian asset equity stakes."

FCC focus on a second phase of the Mobility Fund (MFII) and the Connect America Fund is laudable, but the fact remains that there are clear limits to the amount of subsidy money available in both programs, and tough policy calls will need to be made, said Joan Marsh, AT&T senior vice president-federal regulatory, Tuesday in a blog post. On MFII “as we understand it, the FCC has smartly pivoted toward assessing required LTE coverage based on geography, ensuring that winning bidders cover not only population centers, but also the various locations where community members work, farm, visit family and friends, and the points in between,” Marsh said. AT&T’s preliminary budget estimate is that available dollars will support an LTE build to only 70-80 percent of eligible areas, she said. The current proposal “would require winning providers to cover an average of 90 percent of the geography that the provider wins in a state, with no individual census tract falling below 75 percent coverage,” Marsh wrote. “While such a coverage requirement is certainly laudable, it will come with a significant price tag and will likely push bidders away from census tracks with extremely sparse populations or tough topography.” Changes to CAF pose similar challenges, Marsh said. “In the CAF II item, the FCC also will need to decide how to weigh bids for varying service levels, from a basic service of 10 Mbps/down to Cadillac services with gigabit download speeds,” she said. “The current proposal skews toward favoring fiber-fed services that will deliver gigabit speeds. Again, we do not fault the FCC for wanting to deliver gigabit speeds to rural communities. But setting weights that favor 1 Gig deployments will leave more than half of eligible consumers untouched by CAF II support and with little hope of being served in the future.” Commissioners vote on both issues Thursday.

Consolidated Communications executives acknowledged reputational issues with the FairPoint name as a public-relations risk for its proposed acquisition. At a Maine Public Utilities Commission technical conference live-streamed Tuesday, consumer advocates and unions pressed the executives on FairPoint's history and service quality issues raised in an ongoing PUC probe about missed service quality benchmarks from Q3 2014 to Q2 2016 (see 1701030041). FairPoint turned its business around after initial problems, but “there is a certain amount of reputational issues associated with the name,” said Consolidated Chief Financial Officer Steve Childers. When Consolidated sought financing for the deal, one of the acquirer's lead banks “pulled out at the last minute on us when we were putting the commitment papers together simply because they lost quite a bit of money on the Verizon/FairPoint thing,” he said. FairPoint went bankrupt after buying Verizon Northeast wireline systems. Consolidated Vice President-Regulatory and Public Policy Michael Schultz cited public-relations risk from FairPoint/Verizon integration problems and the bankruptcy that followed. “Even though that was several years ago, there’s still a memory here” FairPoint improved, but some could bring a “here-we-go-again mentality” to the Consolidated deal, he said. Consolidated aims to meet or exceed Maine’s service quality standards, Schultz said. The company plans to apply customer-service best practices from its footprint, including a self-service support tool that reduces the number of trouble reports the company receives, he said. Consolidated Vice President-Operations Gabe Waggoner said the telco also intends to deploy in Maine a GPS tool that optimizes service technicians’ routes to keep them on schedule, and a “virtual hold” feature that lets customers calling into support hang up while keeping their place in the queue. Separately, telecom analysts told us they expect strong state scrutiny of the deal but that FairPoint’s history could end up helping Consolidated secure OKs. “FairPoint has history of service quality issues,” said Technology Business Research analyst Chris Antlitz. “A lot of the issues stem from underinvestment in back office systems and the network. Consolidated can and is likely to use this factor to its advantage to seal the deal because they can promise to clear up some of those issues and boost investment if allowed to merge.” FairPoint’s weak finances kept the company from fixing service issues, but the companies combined could resolve them, he said. Cowen analyst Paul Gallant agreed “having new management of the Maine system probably is a plus in the PUC’s eyes.” The analyst said he'd be “surprised if the Maine PUC isn’t extremely focused on the merger’s impact on service quality.” The Verizon/FairPoint transition “was a game changer in how states review rural telco takeovers," Gallant said. "That was not a good experience for Maine and I expect regulators will take no chances of it happening again.”

A broad group of financial services associations asked the FCC to extend the comment deadlines on a petition by Craig Moskowitz and Craig Cunningham, which the groups say would rewrite the rules they face under the Telephone Consumer Protection Act (TCPA). In a Feb. 8 public notice, the FCC sought comment on the petition for a rulemaking “to overturn the Commission’s improper interpretation that ‘prior express consent’ includes implied consent resulting from a party’s providing a telephone number to the caller.” The FCC sought comment by March 10, replies by March 27. “Such a dramatic change would prevent consumers from receiving important communications from our members on their mobile phones, communications that provide critical information that consumers want and need to receive,” the associations said in docket 02-278. “It would also likely require our members to make fundamental changes to their practices for obtaining consent in conformity with the TCPA’s requirements. Each day, our members make calls to millions of our customers who would be impacted in a very negative way by the change proposed in the Petition. We believe that consideration of a proposed change of this magnitude should be done through a process that affords a greater opportunity for public participation.” The deadlines are simply too tight to allow for thoughtful comment, the groups said. The American Bankers Association, ACA International, American Association of Healthcare Administrative Management, American Financial Services Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Council of Higher Education Resources and Student Loan Servicing Alliance signed the filing.