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, 2010, FTC staff terminated an investigation into whether Limewire, LLC’s peer-to-peer file sharing software puts users at risk of inadvertently sharing sensitive information stored on their computers. In closing the investigation, the FTC noted that Limewire has adopted safeguards in updated versions of its program, and that consumers are able to take actions to avoid inadvertent sharing. This investigation began in February 2010, when the FTC notified almost 100 organizations that their personal and confidential information was available over Limewire’s network. A press release of the original announcement can be found here. A copy of the letter closing the investigation can be found here.
• On August 23, 2010, the FTC announced a settlement with one of the largest participants in a “robo-call” telemarketing operation that blasted US consumers with deceptive offers for extended auto warranties and service contracts. The settlement requires Mr. Damian Kohlfeld to pay more than $2.2 million in fines. All the money will be used to refund defrauded consumers. Earlier this year, the FTC settled with two other defendants in the same case who helped make the robo-calls, and they have paid more than $655,000 in fines. The FTC also settled last September with Transcontinental Warranty Inc., the company that hired Kohlfeld and the other defendants to make the calls. FTC v. Voice Touch, Inc. et al., Case No. 09-cv-2929 (ND Ill.); FTC File No. 0823263. The FTC’s press release 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 26, 2010, the Kansas Corporation Commission (KCC) granted the joint petition of Level 3 Communications, LLC and AT&T Kansas to hold Level 3’s complaint against AT&T in abeyance while the parties seek to negotiate a settlement. Level 3 filed its complaint against AT&T in May 2010 to enjoin AT&T from not “properly rout[ing] nomadic voice-over-Internet-protocol ‘911’ calls” in Kansas. The KCC ordered the parties to file a status report on October 19, 2010, to apprise it of the status of the negotiations. 10-L3CT-749-COM.
• On August 24, 2010, the US District Court for the Western District of Wisconsin dismissed a complaint filed by AT&T Wisconsin against the Minnesota Public Service Commission (MPSC) and Sprint Communications LP challenging a June 2009 order directing AT&T to port the carriers’ interconnection agreement from Kentucky to Wisconsin, with certain modifications, pursuant to the AT&T-BellSouth merger conditions. AT&T argued that the MPSC has no authority to require AT&T to accept the various modifications requested by Sprint. The MPSC and Sprint, however, asserted that the court lacked jurisdiction to consider AT&T’s complaint, arguing that the merger commitments are not “federal law” nor provided AT&T with a private right of action in federal court. The court agreed with the PSC and Sprint, stating that “[e]ven if the merger commitment did provide a basis for jurisdiction, [AT&T] has not shown that it creates a private right of action against the commission or that the commission violated the commitment.” AT&T Wisconsin v. Wisconsin Public Service Commission, 09-cv-00515 (WD Wis.).

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 24, 2010, the first Public Computer Center funded under the National Telecommunications and Information Administration (NTIA) Broadband Technology Opportunities Program (BTOP) opened in Boston. The center was funded through a $1.9 million grant. A copy of the project’s fact sheet can be found here. More information about this opening 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 August 31, 2010, the FCC will be releasing the executive summary of the National Broadband Plan translated to Chinese (Simplified), Samoan, Tagalog, Korean, Thai, and Vietnamese at a forum in Los Angeles on Broadband and the Asian American and Pacific Islander Communities being held at the Japanese American National Museum.
• FCC Commissioners Michael J. Copps and Mignon Clyburn both spoke at a public hearing titled “The Future of the Internet” in Minneapolis on August 19, 2010. Commissioner Copps discussed his view that Internet service providers are saying “don’t worry,” but that they have an incentive to control the content and distribution of broadband. Copps advocated “calling an apple an apple” and classifying broadband as a telecommunications service, and said the Verizon-Google proposal excludes wireless broadband from future Internet openness and creates a tiered Internet. Commissioner Clyburn echoed Commissioner Copps’ concerns about treating wireless broadband differently, and noted that an FCC study found that a greater percentage of African Americans and Latinos access the Internet only through their wireless handsets. Commissioner Copps’ speech is available here. Commissioner Clyburn’s speech is available here.
• Tom Tauke, Verizon’s Executive Vice President-Public Affairs, Policy, and Communications, defended the Verizon-Google Open Internet proposal at the Technology Policy Institute’s Aspen Forum on August 23, 2010. Tauke claimed that the proposal would fulfill “the President’s campaign promise of non-discrimination and transparency on the Internet.” He also claimed that wireless carriers are innocent when it came to blocking wireless applications; the application developers and operating system allegedly were blocking applications.
• FCC Chairman Julius Genachowski spoke at the Broadband Summit at the University of Minnesota’s Carlson School of Management on August 24, 2010. The Chairman continued to support Open Internet principles, stating that the Internet’s open architecture spurred investment and innovation in its development. He stated that users, and not service providers, should control content and services on the Internet.

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

Telecom Privacy News

• As part of the draft of a law governing workplace privacy, Germany has proposed placing restrictions on employers who want to use Facebook and other social networking sites when making hiring decisions. The bill would allow managers to search for publicly accessible information about prospective employees on the Web and to view pages on job networking sites, like LinkedIn or Xing, but would prevent the use of purely social networking sites like Facebook. With limited exceptions, the law also would prohibit companies from secretly videotaping employees. German Chancellor Angela Merkel announced her support for the proposed law last week. The bill will now go to the Bundestag, the German Parliament, for discussion.
• The US Department of Health and Human Services (HHS) is rewriting rules on medical privacy to specify when doctors, hospitals, and insurers must disclose to patients that their medical records have been disclosed improperly. The revisions come after criticism from consumer groups and members of Congress who have stated that the existing rules do not adequately protect the rights of patients. HHS issued temporary rules in August 2009, and submitted final rules in May 2010 for approval by the White House Office of Management and Budget. The temporary rules stated that health care providers and insurance companies must notify patients of a privacy breach only if the breach poses “a significant risk of financial, reputational or other harm to the individual.” This provision has been the primary subject of concern for consumer advocates. Those rules now have been withdrawn to allow for further consideration. The Privacy Rights Clearinghouse, a watchdog group, estimates that more than five million people have been affected by breaches of medical information in the last 18 months.

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

In the Courts

• On August 18, 2010, the US District Court for the Western District of Kentucky resolved a dispute between TracFone and the Kentucky Commercial Mobile Radio Service Emergency Telecommunications Board (CMRS Board) over the appropriate amount and extent of 911 service fees that TracFone was obligated to collect and remit from customers who bought service directly from TracFone as well as customers who bought services through a third party like Wal-Mart. While acknowledging that the statute did not appear to be written for the prepaid wireless service business model – the statute requires carriers to include the fee on “normal monthly billing[s]” which does not happen in the prepaid context – the court ruled that TracFone is not excused from the obligation to collect and remit the fees. The court ordered TracFone to remit 911 service fees due from all its customers from November 2003 through July 12, 2006, and from all its direct customers from July 12, 2006 through September 2009. TracFone need not, however, remit payments for its non-direct customers for that latter period until the CMRS Board defines the proper method of collection. Commonwealth of Kentucky Commercial Mobile Radio Serv. Emergency Telecomms. Bd. v. Tracfone Wireless, Inc., No. 3:08-CV-660-H (W.D. Ky.).
• On August 17, 2010, the State of Michigan Court of Appeals reversed, in part, a Michigan Public Service Commission (PSC) order regarding the manner in which the rural incumbent local exchange carrier (ILEC) members of the Michigan Exchange Carriers Association measure exchange usage and pay access charges based on that usage. Verizon North, Inc. appealed from the order, arguing that the PSC’s decision violated a 2005 Michigan statute. The court of appeals agreed. It explained that “[t]he PSC reasoned that Verizon was in a better position than the ILECs to obtain carrier identification information, and that if Verizon failed to do so, it could be billed for service provided by the ILECs for the unidentified calls.” It concluded that “[t]here is no dispute that Verizon is not originating calls that it forwards to the ILECs. Accordingly, Verizon cannot be deemed the provider that shall pay the tariffed rate for termination of the call. Rather, as MCL 484.2305a(1)(b) states, Verizon’s statutory duty as a forwarding provider is expressly limited to ‘transmit[ing] the telephone number of the party originating the call to the extent such information has been provided by the originating carrier.’ There is no evidence that Verizon has not complied with this statutory directive.” Verizon North, Inc. v. Mich. Pub. Serv. Comm’n, No. 282051.

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

Legislative Outlook

• CHANGE: The House of Representatives and the Senate are out of session. The Senate returns September 13, 2010, and the House returns September 14, 2010.
• Rep. Henry Waxman, D-Calif., Rep. Rick Boucher, D-Va., and Rep. Edward Markey, D-Mass., have released a report by the General Accounting Office (GAO) titled “Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry”. The report states that as of 2009, 90 percent of the market is concentrated in AT&T, Verizon, Sprint-Nextel, and T-Mobile. GAO concludes in the report that the FCC “could collect more detailed data on such issues as prices, special access rates, and capital expenditures” in order to “better assess competition conditions throughout the industry.” The report and summary press release are available here.
• Sen. John D. (“Jay”) Rockefeller IV, D-W.Va., Sen. Amy Klobuchar, D-Minn., and Sen. Ron Wyden, D-Ore., released statements on the GAO wireless report. The senators expressed concerns about quality of service in rural areas, the market effects of early termination fees (ETFs), and the tax burden put on end users of wireless service. The statements are available here.

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 Washington 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 opens September 1, 2010. Invitations will be sent to all persons on the distribution list for this Newsletter.

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