Welcome to the latest edition of Arent Fox’s This Week in Telecom, our weekly newsletter designed to keep you apprised of recent developments in telecommunications policy, legislation and litigation. Follow our Telecom Group on Twitter! Click here.

Federal Communications Commission (FCC) Announcements

• The next FCC Open Meeting is scheduled for May 20, 2010, at 10:30 am Eastern. The final agenda contains the same five items as were announced April 29 on the tentative agenda. To view the final agenda, click here.

• The FCC has commenced an initiative to prevent consumer “bill shock” in wireless bills. It is the first initiative of the Consumer Task Force formed in January 2010 by Chairman Julius Genachowski. The Task Force seeks comment in a Public Notice released May 11, 2010, which can be viewed here.

Federal Trade Commission (FTC) Developments

• The FTC announced that the deadline for its decision on whether to oppose the merger of Google and AdMob Inc. has been extended by two weeks to May 24, 2010. Google announced its intention to acquire AdMob, one of the world’s largest mobile advertising platform, in November 2009. Until recently, the FTC was widely expected to oppose the merger because the merged entity would control too much of online ad space. However, the FTC may be reconsidering its decision as it analyzes the competitive landscape following Apple’s announcement of its iAd mobile-advertising service. An article discussing the delay can be found here.

Developments in Intercarrier Compensation

• On May 11, 2010, the Iowa Utilities Board approved a settlement agreement ending the dispute between Verizon Communications of Iowa, Inc. and Frontier Communications of Iowa, Inc. that will have the effect of lowering Frontier’s intrastate access rates. Verizon alleged in its complaint that Frontier’s intrastate access rates were substantially higher than those of Qwest Corp., and were thus anticompetitive and unreasonable. Pursuant to the terms of the settlement, Frontier will reduce its intrastate local switching rate from $0.026058 per minute to $0.021488 in a three-stage reduction. The first reduction will take effect within five days, while the second and third reductions will occur on July 1, 2011 and July 1, 2012, respectively. In its order approving the settlement, the Board stated that “because Frontier is changing its access tariffs, the reduction in its local switching access rates will apply to all intrastate traffic from all interexchange carriers” and that “this reduction will benefit not only Verizon and its customers, but all interexchange carriers doing business with Frontier and the customers of those carriers.” FCU-08-6.

• On May 11, 2010, AT&T Florida filed a complaint with the Florida Public Service Commission alleging that affiliated CLECs Grande Communications Networks LLC and Grande Communications Networks, Inc. had breached the terms of their interconnection agreement (ICA) with AT&T by refusing to pay reciprocal compensation for VoIP traffic transported and terminated by AT&T. AT&T asserts that the parties’ ICA does not distinguish between TDM and VoIP traffic, and therefore Grande has no basis to withhold payment for the VoIP traffic. According to AT&T, Grande submitted a dispute letter to AT&T stating that the FCC is still considering whether VoIP traffic is compensable, and it was therefore claiming that such traffic was not subject to compensation either under a tariff or an ICA. AT&T is seeking damages of approximately $290,000, not including late fees. 100275-TP.

• On May 7, 2010, Florida Governor Charlie Crist signed legislation that amends section 364.051 of the Florida Statutes to subject all Florida local exchange telecommunications companies to price regulation. Under existing law, only incumbent local exchange carriers that elected to be subject to price regulation were regulated as such. The new legislation becomes effective July 1, 2010. HB 1377.

Please contact Ross Buntrock, Jon Canis, Michael Hazzard or Stephanie Joyce (contact information below) for further information regarding intercarrier compensation matters.

Compliance Notes

• The annual reporting period for competitive local exchange carriers (CLECs) and interexchange carriers (IXCs) operating in Texas runs from June 1, 2010 to June 30, 2010. Carriers are required to file on-line through the Public Utility Commission of Texas' website. The log in to make the filing for CLECs can be found here. The log in to make the filing for IXCs can be found here.

Stimulus This Week

• On May 7, 2010, the Rural Utilities Service (RUS) announced its application procedures and general policies for those seeking funding for Satellite, Rural Library Broadband, and Technical Assistance grants under the Broadband Initiatives Program (BIP). Applications for funding of these types of projects under BIP will be accepted between May 7, 2010 and June 7, 2010. RUS is accepting paper applications only for the funding of these projects. Electronic filing is not available. The Federal Register publication of the guidelines can be found here and the application materials can be found here.

Please contact Ross Buntrock, Jon Canis, Alan Fishel or Jeffrey Rummel (contact information below) for further information regarding stimulus funding.

Broadband News

• On May 7, 2010, the FCC released a bevy of resources on the recently announced “Third Way” approach to regulating broadband, such as a video address by Chairman Genachowski in which he further explains the “Third Way” approach. The clip is available here. In addition, new “media resources” are being collected on the FCC’s www.broadband.gov website. More information can be found here.

• On May 12, 2010, the FCC granted conditional approval of 21 petitions filed by cities, counties, and states to build regional or statewide interoperable wireless broadband networks in the 700 MHz public safety broadband spectrum. The FCC requires that these broadband networks are deployed under a common interoperability framework in coordination with the FCC’s Emergency Response Interoperability Center to ensure that all networks being deployed are technically compatible and fully interoperable. Chairman Genachowski said the action “brings America significantly closer to creating a nationwide public safety broadband network.”

• Chairman Genachowski spoke at the National Cable & Telecommunications Association conference in industry conference in Los Angeles on May 13, 2010, and defended the need for some regulatory oversight of broadband. Citing the United States’ low rank in the world in many measurements of broadband adoption and speed, Chairman Genachowski stated that the FCC must do something to encourage adoption and competition. He also stated that the Comcast decision did not change the FCC’s broadband policy objectives, and that the “Third Way” approach appropriately balances “doing nothing” with “imposing massive regulations.” Chairman Genachowski called the “Third Way” approach narrowly tailored and indicated that he would put the approach up for public comment soon.

Please contact Ross Buntrock, Alan Fishel, Michael Hazzard, or Jeffrey Rummel (contact information below) for further information.

Telecom Privacy News

• The Electronic Frontier Foundation filed suit last week against the Justice Department to force it to release records regarding three provisions of the Patriot Act that are set to expire early next year unless Congress renews them. EFF is seeking the immediate release of Federal Bureau of Investigation reports on the provisions’ effectiveness, lawfulness, and potential misuse as part of the case filed in U.S. District Court in Washington, D.C. The complaint in that case is available here. The current provisions, due to expire in February 2011, give the FBI the ability to seize electronic records and property, as well as to tap phone conversations.

In the Courts

• On May 10, 2010, the U.S. Court of Appeals for the Ninth Circuit affirmed two district court orders dismissing separate complaints brought against T-Mobile USA, Inc. challenging the carrier’s practice of billing customers both a Universal Service Fund fee and a Regulatory Programs Fee. The Northern District of California district court had dismissed various California state law claims for unfair competition, false advertising, and the Consumer Legal Remedies Act, as well as a federal claim for unjust and unreasonable practices under section 201(b) of the Communications Act. The United States District Court for the Western District of Seattle had dismissed similar claims brought under Washington and federal law. The Ninth Circuit affirmed both district courts on the ground that T-Mobile's contracts with those consumer plaintiffs, including its incorporated “terms and conditions” document, expressly allows for the charges. 9th Cir. Nos. 09-15770, 09-35201.

• On May 13, 2010, Paetec Communications, Inc. filed its Petition for Permission to Appeal Pursuant to FRAP Rule 5 and 28 U.S.C. section 1292(b) with the U.S. Court of Appeals for the District of Columbia Circuit. Paetec seeks review of the district court’s entry of summary judgment in favor of defendant CommPartners, LLC, represented by Michael Hazzard of our Telecom Group, in a case seeking payment of access charges for VoIP traffic. The district court had held that Paetec’s tariff, which purports to impose access charges for VoIP-originated traffic, cannot require payment as a matter of law. D.C. Cir. Case No. 10-8002.

Legislative Outlook

• Rep. Rick Boucher, D-Va., released a draft bill last week aimed at strengthening consumer data protections. The bill already has drawn great attention for how it will impact mobile marketing efforts and, in particular, requirements regarding the handling of mobile location information. Some industry representatives have expressed concerns about a provision that protects a person's precise location, requiring it to be treated as sensitive information subject to an express “opt-in” requirement before being used by mobile phone applications. The draft bill is available here. Rep. Boucher has indicated in public comments that he welcomes comment from stakeholders until the beginning of June.

• As was reported in the May 10 issue, the House Commerce Committee held a hearing titled “The National Broadband Plan: Promoting Broadband Adoption” on May 13, 2010. Witnesses included Carol Mattey, Deputy Chief of the FCC Wireline Competition Bureau, and C. Howie Hodges II, Senior Vice President for Government Affairs of One Economy, a global non-profit organization that seeks to encourage broadband deployment. In his Opening Remarks, Committee Chairman Henry Waxman, D-Calif., noted that “[t]he largest barrier identified by the Broadband Plan is cost,” and noted that he supports legislation targeted toward that issue that was introduced by committee member Rep. Doris Matsui, D-Ca., titled the “Broadband Affordability Act” (HR 3646). More information about the hearing can be found here.

Upcoming Events

• The Federal Communications Bar Association will hold its annual Robert E. Lee Memorial Golf Tournament on June 7, 2010, at The Country Club at Woodmore in Mitchellville, MD. For more information or to register, click here.

For further information, please contact any of our attorneys in the Arent Fox Telecommunications Group, including:

Ross A. Buntrock
buntrock.ross@arentfox.com
202.775.5734

Jonathan E. Canis
canis.jonathan@arentfox.com
202.775.5738

Alan G. Fishel
fishel.alan@arentfox.com
202.857.6450

Michael B. Hazzard
hazzard.michael@arentfox.com
202.857.6029

Stephanie A. Joyce
joyce.stephanie@arentfox.com
202.857.6081

Jeffrey E. Rummel
rummel.jeffrey@arentfox.com
202.715.8479