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. Items on the tentative agenda include the 14th Mobile Wireless Competition Report and a Pole Attachment Order and Further Notice of Proposed Rulemaking. To view the agenda, click here.

• On May 6, 2010 at 3:00 am EST, the FCC will hold a workshop on its Broadband Availability Gap white paper. Prior registration may be done via e-mail to fcc504@fcc.gov and is encouraged. The workshop will take place in the Commission Room of the FCC’s headquarters located at 445 12th Street, SW in Washington, DC.

• On April 26, 2010, FCC Chairman Julius Genachowski announced the launch of the Spectrum Task Force which will be co-chaired by Julius Knapp, Chief of the Office of Engineering Technology, and Ruth Milkman, Chief of the Wireless Telecommunications Bureau. The Task Force will focus on implementing the spectrum-related goals of the National Broadband Plan. The Chiefs of the International, Media, Enforcement, and Public Safety and Homeland Security Bureaus, as well as the Chief of the Office of Strategic Planning and Policy Analysis, will serve on the Task Force.

Federal Trade Commission (FTC) Developments

• The FTC has reached an agreement with women’s clothing retailer Talbots and its California telemarketing company to settle charges that the two companies used prerecorded marketing “robocalls” that failed to give consumers proper notice of their right to opt out of receiving such calls. In addition to paying fines totaling $161,000, the companies agreed to comply with conditions requiring them to inform consumers of how to opt out of such calls prior to any marketing message, to immediately disconnect consumers who opt out, and inform consumers that they can make a “do-not-call” request at any time during the call. U.S. v. Talbots, No. 10-cv-10698 (D. Mass). The FTC’s press release announcing the settlement can be viewed here.

• Senator Charles E. Schumer, D-NY, has urged the FTC to provide guidelines for social networking sites, like Facebook, Myspace, and Twitter, on how private information submitted by online users can be used and disseminated. He also asked the FTC to examine the privacy disclosures of social networking sites to ensure they are accurate and fully disclose the extent to which the sites share information. The letter is largely in reaction to reports that Facebook has decided to provide user data to third-party Web sites and has begun sharing personal profile information that users previously had the ability to keep private. A press release detailing Senator Schumer’s request can be found here.

Developments in Intercarrier Compensation

• On April 26, 2009, the staff of the Illinois Commerce Commission recommended denial of the motion of AT&T-Illinois to dismiss Cbeyond Communications, LLC’s complaint. Cbeyond alleged in its March 9, 2010 complaint that AT&T was charging Cbeyond for work it was not performing, including reconfiguring or converting existing UNE combinations. Although the staff indicated that “AT&T’s Motion is not entirely without merit,” staff could not conclude that there are “no issues of fact or law that would allow” Cbeyond to recover under Illinois law or the parties’ interconnection agreement (ICA). The staff concluded that “the Commission will likely need to make findings of fact and law regarding whether the parties’ ICA, or perhaps the AT&T Wholesale Tariff, provide for reconfiguring existing UNE combinations.” T-10-0188.

• On April 23, 2009, the staff of the Florida Public Service Commission recommended that Qwest Communications Company LLC’s complaint against six CLECs should be partially dismissed to the extent Qwest seeks monetary damages or an injunction. Qwest alleged in its complaint that the respondent CLECs were engaging in unlawful discrimination by entering into off-tariff access contracts with other similarly situated interexchange carriers (IXCs), and thereby withholding the advantages of these agreements from Qwest to its detriment. Qwest requested that the Commission order the CLECs to (1) “pay reparations with interest;” (2) lower their intrastate access rates to be consistent with their off-tariff agreements; (3) cease and desist from offering intrastate switched access services outside of publically available tariffs; and (4) file all off-tariff access contracts with the Commission. The staff noted that Qwest’s complaint included confusing and alternating terminology regarding the relief it was seeking, such as “reparatory refunds,” “retrospective relief,” “prospective relief,” “reparations,” and “damages.” Consistent with prior Commission decisions, the staff found that the Commission lacks authority to award damages, but it does have the authority “to prevent anticompetitive and unlawful discrimination amongst telecommunications service providers, and to determine the amount of any refunds and applicable interest, if any, Qwest might be due.” Docket No. 090538-TP.

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

Compliance Notes

• Reply Comments on Form 477 for Local Telephone Competition and Broadband Reporting are due May 4, 2010. The FCC seeks comment on a request filed by Free Press to “review data collected by the [FCC] in connection with its periodic inquiry into the deployment of advanced telecommunications capability to all Americans.” Free Press’s request is “limited to the data reflecting subscribership as of December 31, 2008.” Free Press states that access to the data will allow it to “conduct a more comprehensive analysis of subscribership to high-speed Internet access services” which then will “assist the Commission in making well-informed data-driven policy choices.” In conjunction with this request, Free Press is seeking a protective order, because some filers have requested confidential treatment of this data as it may be considered “competitively sensitive.” A copy of the Public Notice can be found here. (DA 10-466, WC Docket No. 10-75) Please contact Ross Buntrock, Jon Canis, or Michael Hazzard (contact information below) for further information.

• On April 13, 2010, the FCC released its Notice of Proposed Rulemaking relating to the collection of the FCC's Annual Regulatory Fee. The proposed fee for Commercial Mobile Radio Service (CMRS) providers is $0.08 per line, which is the same as the 2009 rate. The proposed fee for Interstate Telecommunications Service Providers (ITSPs) is $0.00351 per assessable dollar, which represents a slight increase from the 2009 rate of $0.00314. ITSPs may calculate the amount that they owe by applying the proposed rate of 0.00351 to all interstate and international telecommunications services provided to end users as reported on Form 499-A. Comments are due on May 4, 2010, with Reply Comments due on May 11, 2010. A copy of the NPRM can be found here. The FCC’s annual fees are typically due the last week in September.

Stimulus This Week

• On April 28, 2010, the Rural Utilities Service (RUS) released project summaries of all of the projects funded under the Broadband Initiatives Program (BIP) in Round 1 of funding under the American Recovery and Reinvestment Act of 2009 (ARRA). The project summaries may be found here, and are sorted by state.

• The National Telecommunications and Information Administration (NTIA) announced the final grant recipients under Round 1 of the Broadband Technology Opportunity Program (BTOP), funded by ARRA on April 26, 2010. NTIA announced that projects that centered on infrastructure deployment and broadband sustainability in Idaho, Kentucky, Oklahoma, Puerto Rico, Virginia and Washington would receive funding. A copy of the press release may be found here.

• In Round 1 of BTOP, NTIA issued 82 grants for projects in 45 states and territories totaling $1.2 billion. NTIA has begun reviewing the applications for funding under Round 2 of BTOP with the goal of announcing the initial recipients for funding in this round in early summer.

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

Broadband News

• The FCC granted a Petition of the National Association of Regulatory Utility Commissioners (NARUC) on April 26, 2010 concluding that the FCC “has not preempted or otherwise precluded the States from mandating that broadband providers file data or other information regarding broadband infrastructure or services” in WC Docket No. 09-193. The FCC specifically stated that it expressed no opinion “regarding whether the laws of any particular State authorize the State’s public utilities commission or similar agency to require the filing of such data or information.” The FCC also stated it would not “address whether any State or group of States should, as a policy matter, engage in broadband data collection efforts that supplement ongoing federal efforts.” The order is available here.

• The FCC also issued a separate order on April 26, 2010 that will “facilitate the broadband mapping and other projects that eligible entities are undertaking under the [Broadband Data Improvement Act] to improve available data on broadband deployment and adoption” in WC Docket No. 07-38, GN Docket No. 09-47, and GN Docket No. 09-51. The order adds measures designed to protect the confidentiality of broadband data collected on Form 477, such as data-sharing firewalls. The order also states that the shared data will be aggregated into “complementary sets of data.” The data sets generally correspond to subscriber-counts, provider data, and DSL and cable-modem service availability. The order is available here.

• Chairman Genachowski spoke briefly at the FCC’s workshop titled “Approaches to Preserving the Open Internet” on April 28, 2010. He emphasized that consensus had emerged on key issues in the open Internet like: “the FCC has a central role in preserving Internet freedom and openness; the importance of transparency; the unacceptability of blocking access to lawful content or apps; that reasonable network management is, well, reasonable; that open Internet is about lawful content; and that an open Internet can and should coexist with enforcement of copyright and other laws.”

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

Telecom Privacy News

• The man responsible for the theft of 130 million credit card numbers from several major U.S. retailers and a large payment processor has been sentenced to 20 years in federal prison, according to the Justice Department. Albert Gonzalez pled guilty last year in a Boston federal court to charges relating to the incidents, including conspiracy to violate the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and conspiracy to commit wire fraud under 18 U.S.C. § 1349. A Justice Department official said the sentence is one of the longest ever imposed against a hacker. Gonzalez’s plea deal covered charges from New Jersey relating to a well-publicized database attack on Heartland Payment Systems Inc. of Princeton, one of the world’s largest payment processing companies. The incident has been described as the largest single breach of personal financial information in U.S. history. The case is United States v. Gonzalez, No. 09-CR-10262 (D. Mass).

• The United States government is liable to an Islamic charity for monitoring the group’s telephone calls and Internet activity without a warrant, a federal judge in California has ruled. U.S. District Judge Vaughn R. Walker of the Northern District of California granted summary judgment to the Al-Haramain Islamic Foundation and two of its members in their lawsuit against several government agencies. The Oregon-based Al-Haramain alleged that it was subjected to prohibited warrantless wiretapping under the Bush administration’s now-defunct “terrorist surveillance program.” Al-Haramain has been prohibited by an Oregon federal court from using or publicly discussing information contained in a classified document that federal authorities accidentally gave the charity in 2004, but Judge Walker agreed with Al-Haramain that the public evidence shows, independently of the classified document, that it was subject to surveillance not approved by the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. § 1801. Because there was no warrant, the government is liable for violating FISA, the judge ruled. In re National Security Agency Telecommunications Records Litigation, No. 06-1791, 2010 WL 1244349 (N.D. Cal. Mar. 31, 2010).

In the Courts

• On April 22, 2010, the FCC filed a petition for writ of certiorari seeking the Supreme Court’s review of the U.S. Court of Appeals for the Third Circuit’s order in AT&T, Inc. v. FCC (No. 08-4024), in which the court held that the FCC misinterpreted the Freedom of Information Act (FOIA) when it ruled that AT&T, as a corporate entity, did not qualify for FOIA’s “personal privacy” exemption. The FCC’s November 6, 2009 petition for panel rehearing or rehearing en banc was denied by the Third Circuit on November 23, 2009.

Legislative Outlook

• On April 27, 2010, the U.S. Senate Committee on Small Business and Entrepreneurship held a hearing titled “Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access.” In his written testimony, Chairman Genachowski told the Committee that the National Broadband Plan “contains a number of strong recommendations to tackle those challenges” to increasing broadband availability for small businesses. These recommendations include the re-purposing of the Universal Service Fund for broadband, expansion of the FCC’s Rural Healthcare Program, and “taking steps to promote competition.” Jonathan Adelstein, former FCC Commissioner and now the RUS Administrator, informed the Committee about RUS funds that have been awarded to small telecommunications companies that will deploy broadband facilities in rural and underserved areas. Tom Gerke, Executive Vice Chairman of Louisiana-based CenturyLink, highlighted the investment that his company has made in deploying broadband facilities in rural America. For example, CenturyLink has spent $900 million on deployment in Louisiana alone. Other witnesses included Larry Strickling, Assistant Secretary for Communications and Information at the Department of Commerce, and the Honorable Steve Largent, President and CEO of CTIA.

• On April 29, 2010, the U.S. Senate Commerce Committee held a hearing titled “Examining Children’s Online Privacy: New Technologies and the Children’s Online Privacy Protection Act.” Witnesses included Berin Szoka, Senior Fellow & Director of the Center for Internet Freedom of The Progress & Freedom Foundation, and Ms. Jessica Rich, Deputy Director of the FTC Bureau of Consumer Protection. In his opening remarks, Committee Chair John (Jay) Rockefeller IV, D-W.Va., stated that “Many companies are collecting personal information and monetizing it. This commercial practice has a particular impact on our children. … with such rapid change, I firmly believe Congress also must take a hard look at whether COPPA should be updated to cover new kinds of information and new businesses.” Senator Mark Pryor, D-Ark., Chair of the Senate Consumer Protection Subcommittee, stated that “[p]rotecting our children’s online privacy and safety is a critical issue whose importance cannot be overstated,” and noted that “in the last five years, we have seen the time spent online by kids ages 2 through 11 increase by 63 percent.” The FTC’s review of its COPPA rules commenced March 24, 2010, and the comment period closes June 30, 2010.

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, Maryland. 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