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 FCC has released the Seventh Broadband Notice of Inquiry in which it seeks comment on the definition of “advanced telecommunications” as well as the proper metrics for evaluating broadband and whether broadband has been deployed sufficiently. Comments are due September 7, 2010, and Reply Comments are due October 5, 2010. Please contact Ross Buntrock, Jon Canis, Michael Hazzard, or Stephanie Joyce (contact information below) for further information or for assistance in filing comments. The NOI is available here.
• The next FCC Open Meeting is scheduled for Thursday, September 23, 2010. The Tentative Agenda has not been announced.

Federal Trade Commission (FTC) Developments

• On August 19, the FTC and US Department of Justice (DOJ) jointly released final versions of the Horizontal Merger Guidelines that outline how the federal antitrust agencies evaluate the likely competitive impact of mergers. The Guidelines were last updated in 1992. Although the agencies are jointly tasked with review of mergers, a 2002 Memorandum of Understanding assigns the DOJ primary responsibility for investigating telecom related mergers. A copy of the Guidelines can be found here. A press release announcing the release of the Guidelines and summarizing some of the major changes can be found here.

Please contact Ross Buntrock, Alan Fishel, or Stephanie Joyce (contact information below) for further information or for assistance in filing comments.

Developments in Intercarrier Compensation

• On August 16, 2010, Sprint Communications Company filed a complaint against Native American Telecom, LLC (NAT) with the US District Court for the District of South Dakota, alleging that NAT is unlawfully billing Sprint for traffic destined for so-called “Call Connection Companies.” Sprint alleges that such traffic is not covered under NAT’s access tariffs. Sprint further alleges that “Call Connection Companies” are “business partners or joint venturers, not ‘customers’” and that calls to these entities do not terminate in NAT’s local exchange. Sprint previously lodged a similar complaint with the South Dakota Public Utilities Commission, and NAT initiated its own suit against Sprint with the Crow Creek Sioux Tribal Court. In addition to monetary damages related to two invoices that allegedly were “mistakenly paid,” Sprint is also seeking declaratory and injunctive relief to prevent the Tribal Court from exercising jurisdiction over the case. Sprint Commc’ns Co. L.P. v. Maule, Case No. 4:10-cv-04110-KES (DSD).

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

Compliance Notes

• Completed Local Competition and Broadband Reports (FCC Form 477) are due to the FCC September 1, 2010. The filing requirement applies to facilities-based providers of broadband connections to end user locations, providers of wired or fixed wireless local exchange telephone service, providers of interconnected Voice over Internet Protocol (VoIP) service, and facilities-based providers of mobile telephony service. The FCC has prepared a guide to assist filers in preparing the report, which can be found here. The report may be filed electronically here.
• On August 9, 2010, the FCC announced that payments of the Annual Regulatory Fee are due on August 31, 2010 (DA 10-1451). All interstate telecommunications service providers (ITSPs) must pay $0.00349 per assessable revenue dollar, based upon the revenues reported on their FCC Form 499-A. Commercial Mobile Radio Service (CMRS) will be assessed $0.18 per unit. Broadband Radio Service (BRS) (formerly known as multipoint distribution service (MDS) and multichannel multipoint distribution service (MMDS)), and local multipoint distribution service (LMDS) providers are assessed $310.00 per license. Earth stations are assessed $240.00 per license/authorization and $240.00 for each Hub Station.
  
  The FCC will not be sending out reminder notices or invoices this year. Providers are required to log into the FCC’s Fee Filer service with their FRN and password in order to determine the amount of the assessment. Carriers and other communications providers are required to pay the fee no later than 11:59 PM EDT on August 31, 2010, or risk a late payment penalty of 25 percent of the assessment.
  
  A copy of the Public Notice may be found here. The FCC has also put out a guide to using the Fee Filer service that is available here, as well as a guide to making the required payment that can be found here.

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

Stimulus This Week

• On August 18, 2010, Vice President Biden announced 94 grants for broadband projects under the Broadband Technology Opportunities Program (BTOP), administered by the National Telecommunications and Information Administration (NTIA). The grants total $1.8 billion and will fund projects in 37 states. A copy of the announcement may be found here. A list of the awards can be found here.
  
  One grant, totaling $102 million, was given to the University of Arkansas for Medical Sciences (UAMS), a client of Arent Fox. It is the largest federal grant in the history of the state of Arkansas, officials said Tuesday. The funding from BTOP will be supplemented by a match of more than $26 million, for a total project cost of more than $128 million, making this one of the largest funded broadband stimulus projects announced to date. The project will address critical broadband needs in health care, higher education, public safety, and research in unserved, underserved, and economically distressed areas in Arkansas. The Arent Fox team, led by Jeffrey Rummel, a partner in the firm’s Telecommunications Group, and Jon Bouker, a partner in the firm’s Government Relations Group, assisted long-time client UAMS at every stage of the application process with respect to regulatory compliance and public policy issues.
• On August 16, 2010, NTIA announced a grant totaling $10.6 million for the North Central New Mexico Economic Development District to fund deployment of high-speed Internet infrastructure to five Native American tribal communities and across the counties of Rio Arriba, Los Alamos, and northern Santa Fe. A copy of the announcement 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

• This week it was reported that numerous Internet and telecommunications companies met to discuss Open Internet issues at the offices of the Information Technology Industry Council, but without the involvement of FCC officials. The industry discussion comes in the wake of the FCC’s discontinuance of stakeholder meetings two weeks ago and the Google-Verizon proposal issued last week. Google is not involved in these discussions, but Cisco, Microsoft, AT&T, and the National Cable & Telecommunications Association are reported to be involved. Read more here.
• On August 13, 2010, the FCC released a paper entitled “Broadband Performance: Omnibus Broadband Initiative Technical Paper No. 4,” which described why and how the target of 4 Mbps downstream and 1 Mbps upstream was included in the National Broadband Plan. The paper also finds that the 4 Mbps downstream target will satisfy 80 percent of existing Internet usage. It is available here.

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

Telecom Privacy News

• A South Carolina court of appeals has held that a defendant’s unauthorized access of e-mails on a Yahoo! account server violated the Stored Communications Act (SCA). The case involved a husband who sued his wife and his wife’s daughter-in-law after the daughter-in-law accessed his Yahoo! e-mail account and gave the e-mails to his wife in connection with their divorce proceedings. The trial court granted summary judgment to the defendants, ruling that the husband was not an “electronic communications service” covered by the SCA. On appeal, the appellate court reversed, stating that the trial court “framed the issue incorrectly” and should have addressed Yahoo!'s status in storing copies of the e-mails on its computers rather than the husband’s status in storing e-mails on his personal computer. The appeals court held that Yahoo! was acting as an electronic communications service, because the husband’s account was active and could send and receive e-mails. The appellate court added that the “post-transmission” state of the e-mails did not affect their coverage under the SCA, and rejected the defendants’ attempt to create a distinction between opened and unopened e-mails. The court of appeals also, however, affirmed the trial court’s grant of summary judgment for the wife, ruling that the daughter-in-law was the only proper defendant, because she was the person who accessed plaintiff’s Yahoo! account. Jennings v. Jennings, No. 4711.
• Saudi Arabia has backed off a threatened ban of BlackBerry Messenger services after reaching an agreement with the Canadian manufacturer of the device, Research In Motion (RIM). Although no reason was given for the sudden breakthrough with Saudi Arabia, analysts believe that RIM likely agreed to hand over BlackBerry codes that will permit Saudi regulators and intelligence agents to monitor messaging services. This delays a potential problem in the biggest Middle Eastern market for BlackBerrys. But the company faces new challenges as it tries to reconcile its security commitment to corporate and individual clients with demands from countries, such as India, to monitor BlackBerry traffic. These governments are concerned that encrypted e-mail and messaging services could be exploited by terrorists and other groups posing national security threats. During the week of August 2, 2010, Saudi regulators had ordered the kingdom's three telecom companies—Saudi Telecom, Mobily, and Zain Saudi Arabia—“to immediately block the BlackBerry services to businesses and individuals alike” or face a reported $1.3 million fine. India has set an August 31, 2010 deadline for RIM to satisfy its security concerns or risk being banned. Other countries such as Indonesia, Turkey, and Algeria have also voiced concerns about the perceived security risks with BlackBerry. Russia and China have allowed BlackBerry to operate only after long discussions.

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

In the Courts

• On August 11, 2010, the US District of New York for the Northern District of New York (NDNY) became the second court in as many weeks to deny a request by Level 3 Communications to freeze litigation brought against it for failure to pay for operation of its broadband network over a plaintiff’s property (see last week’s This Week In Telecom for a summary of the Idaho case). Here, the NDNY denied Level 3’s motion to stay this federal suit brought by the New York State Thruway Authority (NYSTA) for Level 3’s failure to pay more than $2 million in right-of-way fees. Level 3 has petitioned the FCC for a finding that the NYSTA’s payment demands were “unreasonable and discriminatory” and preempted under section 253 of the Communications Act. The NDNY rejected Level 3’s argument that the court should stay its hand while the FCC resolves Level 3’s petition, finding instead that the parties had a contract dispute that the court is capable of resolving: “the Court agrees with NYSTA that FCC does not have special competence in this arena and this matter does fall squarely within the conventional experience of judges.” The “litigation already in this Court should not be held hostage to an administrative process that is not proceeding with all deliberate speed, especially when there is a public interest in prompt adjudication of a plaintiff’s claims,” the court concluded. New York State Thruway Ass’n v. Level 3 Commc’ns, LLC, Case No. 1:10-CV-154 (NDNY).
• On August 10, 2010, a Wisconsin appeals court affirmed the dismissal of a putative class action complaint filed against AT&T Wisconsin and various other carriers for wrongfully billing for unauthorized services – “cramming” – on the ground that the complaint was barred by the “voluntary payment doctrine.” As the court explained, the “doctrine places upon a party who wishes to challenge the validity or legality of a bill for payment the obligation to make the challenge either before voluntarily making payment, or at the time of voluntarily making payment.” The court acknowledged that there are three exceptions to the doctrine – for fraud, duress, or mistake of fact – and agreed with the trial court that none of those exceptions applied here, where the plaintiffs paid the invoices without protest. Despite the plaintiffs’ claims that this construction of the doctrine would effectively render Wisconsin’s anti-cramming statute meaningless, the court found that the plaintiffs must secure relief from the legislature, because the court must follow the voluntary payment doctrine in its current form. MBS-Certified Public Accountants, LLC v. Wisconsin Bell, Inc., Wis. Appeal No. 2008AP1830.

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

Legislative Outlook

• The US House of Representatives and the US Senate are out of session. Both chambers return on Tuesday, September 6, 2010.
• On August 5, 2010, Senator Mark Pryor, D-Ark., introduced S. 3742, the “Data Security and Breach Notification Act of 2010,” which would require the FTC to adopt rules mandating that any entity possessing personal data must establish a policy for the retention and protection of such data. In the event of a data security breach, an entity would be required to submit the written policy to the FTC along with the notification of the breach. The law would be enforceable by the FTC and the state Attorneys General under 15 U.S.C. Section 45(a)(2). Senator John D. (“Jay”) Rockefeller IV, D-W.Va., co-sponsored the bill.

Upcoming Events

• Telecom Group Partners Jon Canis and Ross Buntrock will be presenting at the COMPTEL Plus 2010 Fall Convention + Expo being held September 12-15, 2010, in Dallas. For more information or to register, click here.
• On September 23, 2010, in the Arent Fox DC Office, Telecom Group Partner Ross Buntrock will present the regulatory framework that the European Union adopted in 2009 for telecommunications services. Joining Ross will be Laurent Garzaniti and Matthew O’Regan of Freshfields Bruckhaus Deringer. The new regulatory package, which will be implemented in May 2011, will bring significant changes to the shape of regulation in the telecommunications, media and technology sector in Europe. Registration information will be included in the August 30 edition of This Week in Telecom.

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