Welcome to the Memorial Day 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 will be Thursday, June 17, 2010. Only one item is on the agenda, a Notice of Inquiry regarding the basis of the Commission’s authority to impose Open Internet rules on broadband Internet services, and particularly whether those services should be classified as “telecommunications services.” The NOI also seek comment on the “Third Way” approach announced recently by FCC Chairman Julius Genachowski that would apply six provisions of Title II to broadband Internet transmission services. To view the tentative agenda, click here.

• The results of the FCC’s consumer survey regarding “bill shock” in wireless services reveals that 1 in 6 wireless subscribers, or 30 million people, have experienced a sudden increase in charges without any change in service plan. The survey also shows that approximately one-half of wireless subscribers who are subject to early termination fees do not know how high the fees are. To view a summary of the survey, click here.

Federal Trade Commission (FTC) Developments

• The FTC has decided not to challenge Google’s acquisition of mobile advertising network company Admob, determining that the acquisition was unlikely to harm competition in the marketplace. In a statement explaining its decision, the FTC relied on Apple’s move to launch a competing mobile ad network as grounds to permit the acquisition. Apple recently acquired Quattro Wireless and used it to launch iAd service which, combined with Apple’s control over the iPhone, leaves Apple poised to become a strong competitor in the mobile advertising market, according to the FTC. The press release on the decision can be found here. The FTC’s statement can be found here.

• The FTC’s Red Flag Rules are scheduled to take effect June 1, 2010. The Red Flag Rules require “creditors,” which include companies that invoice for goods or services (including telecommunications companies), to develop and implement a written Identity Theft Prevention Program designed to detect and prevent identity theft. Businesses that have not yet developed a written Program are encouraged to do so before the June 1, 2010 enforcement date. A FAQ prepared by the FTC regarding the rules can be found here. Please contact Ross Buntrock, Stephanie Joyce, Jeffrey Rummel (contact information below) for information or assistance with compliance.

   

Developments in Intercarrier Compensation

• On May 24, 2010, an administrative law judge (ALJ) at the Oregon Public Utility Commission (PUC) issued a procedural schedule for consideration of a petition filed by the Oregon Exchange Carrier Association (OECA). The petition urges the Oregon PUC to investigate the issue of phantom traffic which it claims has been an “increasing problem each and every year for the past several years.” The ALJ ordered that a workshop will be held on July 23, 2010 and opening testimony from all parties is due by September 2, 2010, with reply testimony due by October 1, 2010. A hearing is scheduled for November 2, 2010. Carriers currently involved in the proceeding include Charter Communications, Oregon Cable Telecommunications Association, AT&T Communications of the Pacific Northwest, Inc., Verizon Communications, TW Telecom of Oregon, XO Communications Services, Inc., GVNW Consulting, Inc., Level 3 Communications LLC, and Qwest Corporation. Docket UM 1423.

• On May 21, 2010, the Kentucky Public Service Commission (PSC) set a hearing schedule to consider a access charge complaint filed by Verizon against Windstream Kentucky, Inc. The PSC reinstated Verizon’s complaint this past January after a Kentucky court ordered the action to be held in abeyance until jurisdictional issues were resolved. Verizon alleged in its original complaint that Windstream’s intrastate access rates were substantially higher than AT&T Kentucky’s intrastate rates, and requested that the PSC order Windstream to mirror AT&T’s rates. The Commission scheduled the opening hearing for October 26-27, 2010. No. 2007-00503.

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 online 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.

• All Common Carriers with sixteen (16) or more full-time employees are required to file their Annual Employment Report (Form 395) with the FCC by May 31, 2010. Form 395 also requires disclosure of any employment discrimination claims that have been made against the company in the previous year. A copy of Form 395 may be found here. A copy of the instructions may be found here.

• On May 24, 2010, the Wireline Competition Bureau (WCB) announced the proposed North American Numbering Plan (NANP) Administration contribution factor and estimated fund size requirement for the fiscal year of July 1, 2010 through June 30, 2011. (DA 10-924, CC 92-237) The NANP Administration fund is used to administer numbering resources, and is funded through contributions from the United States, Canada and the Caribbean. The proposed US contribution is approximately $5.5 million, which results in a factor amount of 0.0000181 per assessable dollar to meet the estimated fund size requirement. If the FCC does not act on this proposed NANP Administration funding within 14 days of this announcement, the proposed fund size and factor shall be deemed approved by the FCC and go into effect. To view the Public Notice, click here.

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

Stimulus This Week

• On May 25, 2010, the Rural Utilities Service (RUS) published a notification extending the deadline for applications for funding of Satellite, Rural Library Broadband, and Technical Assistance projects under the Broadband Initiatives Program (BIP) to June 8, 2010. Filings must be postmarked by that date. A copy of the notice may be found here. The application may 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 21, 2010, the FCC approved the transfer from Verizon Communications Inc. to Frontier Communications Corp. of 4.8 million lines in primarily rural and smaller-city areas. The Commission approved the transfer on the ground that it will advance the goals of the National Broadband Plan to expand broadband into rural area. In order to obtain approval, Frontier and Verizon agreed to several voluntary commitments. Frontier will “significantly increase broadband deployment for the lines involved in this transaction, only 62 percent of which are broadband-capable today.” Frontier will deploy fiber to hospitals, libraries, and government buildings, particularly in unserved and underserved communities. Both Verizon and Frontier will maintain current wholesale arrangements. Frontier will also report to the FCC the progress made on broadband deployment. A copy of the Order may be found here.

• Chairman Genachowski spoke at a roundtable sponsored by the International Telecommunications Union in Hyderabad, India on May 25, 2010. The subject of the talk was “Connect a School, Connect a Community,” and the Chairman emphasized that the National Broadband Plan would promote broadband connectivity for schools. While acknowledging the challenges of deploying broadband, Chairman Genachowski highlighted the National Broadband Plan’s focus on education and the E-rate program as ways of bringing broadband to schools through a predictable, reliable funding mechanism.

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

Telecom Privacy News

• Younger users of social networking sites, when compared to older users of those same sites, are more likely to try to limit how much information about them is made available publicly, according to a new survey released today by the Pew Research Center’s Internet and American Life Project. The poll of 2,253 adults shows that 71 percent of those aged 18-29 have changed the privacy settings on their profile to limit the information shared with others, compared to 55 percent of those aged 50-64. “Contrary to the popular perception that younger users embrace a laissez-faire attitude about their online reputations, younger adults are often more vigilant than older adults when it comes to managing their online identities,” said Mary Madden, a senior research specialist with Pew. The study is available here.

In the Courts

• On May 24, 2010, the U.S. District Court for the District of Arizona denied North County Communications’ motion for reconsideration of the court’s April 30, 2010 order dismissing its intercarrier compensation collection action against various CLECs, without prejudice, for lack of subject matter jurisdiction and because the Arizona Corporation Commission has primary jurisdiction. The district court rejected North County’s argument that the court misapplied the Ninth Circuit’s recent California Catalog case, which affirmed a California district court’s similar dismissal of North County’s claims against wireless carriers and CLECs on the ground that 47 U.S.C. section 251(b)(5) does not create a private right of action to sue in federal court. The court also rejected North County’s argument that, in light of both the FCC’s and California PUC’s refusal to resolve North County’s claims on the merits, North County has essentially been denied any forum to resolve its reciprocal compensation claims. The court noted that the CPUC dismissed North County’s claim without prejudice pending a resolution of North County’s appeal of the FCC ruling to the D.C. Circuit and contingent on receiving “a commitment by the Federal Communications Commission to the use of a rate determined reasonable by [the CPUC].” The court did not explain what would happen if the CPUC does not receive its expected “commitment” from the FCC, but denied relief under primary jurisdiction grounds in any event. N. County Commc’ns Corp. v. MacLeod USA Telecomms. Servs. Inc., No. CV-09-2063-PHX-GMS (D. Ariz.).

• On May 21, 2010, the U.S. Court of Appeals for the Third Circuit reversed the order of the District of New Jersey dismissing, on preemption grounds, a complaint against Verizon Wireless. The district court had held that plaintiffs’ state law claims are preempted by the Federal Arbitration Act (FAA), and that the parties are therefore obligated to follow the arbitration provision in the wireless carrier’s customer agreement. Following its recent decision in Homa v. American Express Co., 558 F.3d 225 (3d Cir. 2009), the Third Circuit held that the state law claims are not incompatible with the FAA, and therefore they should have survived Verizon Wireless’s preemption argument. Litman v. Cellco Partnership, Case No. 08-4103 (3d Cir.).

Legislative Outlook

• On May 26, 2010, Senators Charles Schumer, D-NY, and John Cornyn, R-Texas, have introduced S. 3427, the Pre-Paid Mobile Device Identification Act, which would require purchasers of prepaid cell phones to present identification that the providing carrier must keep on file. The legislation is a response to the Times Square attempted bomber who used a prepaid cell phone that hid his identity.

• Also on May 26, the Senate Communications Subcommittee held a hearing titled “Innovaton and Inclusion: the Americans with Disabilities Act at 20.” In his opening remarks, Subcommittee Chairman Senator John Kerry, D-Mass., noted that the bill he has co-sponsored with Senator Mark Pryor, D-Ark., S. 3304, the Equal Access to 21st Century Communications Act, will make sure “people with disabilities are included in this economic and social revolution.” The bill is modeled on a similar bill introduced in the House by Rep. Ed Markey, D-Mass., HR 3101, the “Twenty-first Century Communications and Video Accessibility Act of 2009.”

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.

• Telecom Group Partners Jon Canis, along with Ross Buntrock, Michael Hazzard, and Stephanie Joyce will be presenting at the COMPTEL Plus 2010 Fall Convention + Expo being held September 12-15, 2010, in Dallas, TX. 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