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

• Chairman Julius Genachowski announced on August 5, 2010, that the FCC has begun “consultations with staff of the Antitrust Division of the Department of Justice (DOJ) about how the two agencies can apply their different statutory standards to wireless merger divestitures in a more coordinated manner.” The effort began as a response to the agencies’ treatment of the Verizon Wireless-ALLTEL merger in April 2010, in which, according to Commissioner Mignon Clyburn, “Verizon Wireless had limited or no guidance about what procedures it should implement to reconcile the Commission’s and DOJ’s potentially discordant goals.” The FCC press release is available here.
• 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.

Federal Trade Commission (FTC) Developments

• The FTC appears to be investigating a complaint filed by Adobe in May 2010 against Apple alleging that its practice of refusing to accept third-party programming tools for the iPhone violates antitrust law. For programmers, such tools make it easier to write applications and have them run on multiple platforms. Although the FTC would neither confirm nor deny the investigation, it did reject a Freedom of Information Act (FOIA) request from Wired.com requesting information regarding the complaint, stating that compliance “could be reasonably expected” to interfere with its law enforcement responsibilities.
• The FTC may propose a “Do-Not-Track” list for Internet users similar to the national “Do Not Call” Registry. If implemented, this list would keep advertisers from tracking consumers’ browsing and shopping history via cookies and from delivering customized ads to consumers based on their past searches. The concept was discussed seriously in 2007. At that time, the Center for Democracy and Technology, the Consumer Federation of America, Consumer Action, and the Electronic Frontier Foundation were among the list’s advocates. The FTC is expected to release a report this Fall with recommendations on ways to improve online privacy.

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 5, 2010, AT&T Communications of the Midwest opposed the motion for stay filed by Native American Telecom, LLC (NAT) with the South Dakota Public Utilities Commission (SD PUC) in a complaint proceeding initiated by Sprint Communications Company L.P. regarding access charges. Sprint filed the complaint on May 4, 2010, alleging that NAT was unlawfully seeking access charges for traffic that Sprint’s long-distance customers placed to conference calling providers. Sprint is seeking a declaratory order stating that (1) the Commission has sole authority to regulate Sprint’s intrastate interexchange services in South Dakota; (2) NAT must obtain a Certificate of Authority from the Commission and file an intrastate access tariff before it can levy charges against Sprint; and (3) the Crow Creek Sioux Tribal Utility Authority lacks jurisdiction over Sprint. After Sprint filed its complaint, several carriers, including AT&T, intervened in the case. On July 7, 2010, NAT filed a separate complaint against Sprint with the Crow Creek Sioux Tribal Court and has since argued to the SD PUC that the Tribal Court has primary jurisdiction over the parties’ dispute, requiring that the SD PUC dismiss Sprint’s complaint. Both Sprint and AT&T argue, however, that it should not dismiss or stay the proceeding, but instead should first rule on its jurisdictional authority over the Tribal Court rather than allow the Tribal Court to determine the extent of the SD PUC’s regulatory authority within South Dakota. Docket TC10-026.
• On August 3, 2010, US Signal Company LLC, d/b/a RVP Fiber Co. filed an opposition with the Wisconsin Public Service Commission (PSC) to AT&T’s motion to dismiss US Signal’s complaint seeking an extension of the parties’ interconnection agreement (ICA). US Signal filed its complaint on June 29, 2010, requesting that the PSC issue an order extending the ICA for three years pursuant to the AT&T-BellSouth Merger Commitments adopted in 2006. AT&T asserted in its motion that the PSC does not have jurisdiction to enforce the Merger Commitments. In its opposition, US Signal argued that AT&T has advanced this “tired,” unsuccessful argument before numerous state commissions in order to delay or frustrate carriers’ requests to extend their ICAs. US Signal added that “AT&T has stalled, dissembled, and pettifogged in negotiations relating to its merger commitments with numerous requesting carriers and before no less than twelve state commissions, including this one, in an attempt to avoid compliance with its obligations.” Docket No. 6720-TI-223.

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.
• Completed FCC Form 499-Qs for Universal Service reporting were due August 2, 2010, for all filers that are not considered to be de minimis. This filing encompasses historical revenues from the second quarter of 2010 and projected revenues for the fourth quarter of 2010. A copy of the current version of the form can be found here. If a filer intends to utilize a traffic study as a proxy for apportioning end-user revenues between intrastate, interstate, and international revenue categories in the fourth quarter, the filer must submit the traffic study on August 2, 2010, as well. A copy of the Public Notice, which includes a brief overview of the guidelines for traffic studies, can be found here. (DA No. 10-1347).

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

Stimulus This Week

• On July 30, 2010, the National Telecommunications and Information Administration (NTIA) announced the award of a $9 million grant to the City of Chicago under the Broadband Technology Opportunity Program (BTOP). The grant will be used to expand and upgrade public computer centers at 150 locations throughout the city, including city colleges, libraries, workforce centers, and public housing sites. The grant will also provide training for 20,000 users over the two-year term of the project. More information on this project can be found here. This grant is part of the second round of BTOP grants. NTIA will announce the remaining awards on a rolling basis through September 30, 2010.

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

Broadband News

• On August 4, 2010, The New York Times reported that Google and Verizon were involved in discussions to establish a tiered pricing system by which companies could pay service providers for priority Internet access. The article is available here. Both companies denied that they were working on such a deal, Google through its public policy Twitter account and Verizon through its policy blog. The statements are available here and here.
• Edward Lazarus, Chief of Staff to Chairman Genachowski, announced on August 5, 2010, that the ongoing Open Internet meetings with a variety of companies and organizations have been called off indefinitely, stating that these “stakeholder” discussions have “not generated a robust framework to preserve the openness and freedom of the Internet.” The meetings continued at the FCC through July and early August, and the list of meetings is available on the broadband blog here. All options for resolution remain on the table according to Mr. Lazarus.

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

Telecom Privacy News

• According to the official Facebook blog, its users now have greater control over how much of their personal information is disclosed to developers of applications that are available on the social networking site, such as games and quizzes. The changes were made in response to complaints from users, civil rights groups, and government agencies. Last July, Jennifer Stoddart, Canada’s Privacy Commissioner, released a report accusing Facebook of violating the country’s Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA requires consent to collect personal information and states that such information can be used only for the purposes for which it was collected. The American Civil Liberties Union also has advocated for restrictions on the ability of applications to access users’ personal information. In response, Facebook now allows applications to access only the personal information that users consent to disclose, and users also have the option to completely disable the site’s application function, known as Platform.
• In a lawsuit brought by the family of a student who allegedly was spied on through a school-provided webcam, a group of parents is siding with a Pennsylvania school district in opposition to the family’s motion for class certification. The lawsuit evolved from a Lower Merion School District initiative to provide students with laptop computers as a way of ensuring that they have 24/7 access to school-based resources. The case, filed in February 2010 in the US District Court for the Eastern District of Pennsylvania, alleges that the school district remotely activates the webcams in the laptops to conduct surveillance of students when they are out of school. The alleged surveillance came to light in November 2009, when the assistant principal of Harriton High School told a student that the school district believed he had engaged in improper behavior at home, allegedly citing a photograph from his webcam as evidence. The lawsuit alleges that the school district is able to capture and view images of anything that is happening in the room where the computer is located, without the laptop users’ knowledge or permission. In June 2010 the plaintiffs filed a motion for class certification, seeking to represent high school students in the school district and their families who were provided with a webcam-equipped computer from 2008 to 2009. The case is Robbins, et al. v. Lower Merion School District, et al., No. 10-0665 (E.D. Pa.).

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

In the Courts

• On August 4, 2010, the US Court of Appeals for the Seventh Circuit affirmed in part and reversed in part a Wisconsin federal district court’s ruling on the Wisconsin bankruptcy court’s disposition of three of Telephone and Data Systems’ (TDS) claims, and the FCC’s objections thereto, filed in Airadigm’s Chapter 11 reorganization plan. The principal assets at issue were a series of C- and F-block spectrum licenses for mobile phone service in certain areas of Wisconsin, Iowa, and Michigan that Airadigm had won at auction in the late 1990s. Complicating matters, the FCC revoked those licenses after Airadigm filed for bankruptcy in 1999, purportedly removing those assets from the bankruptcy estate, with consequent implications for the debtor’s reorganization plan and the various creditors’ claims. The bankruptcy plans had contingencies built in to account for the various outcomes of Airadigm’s FCC petition to have those licenses restored, but while that petition was pending the Supreme Court ruled that the FCC’s automatic license revocation rule violates the Administrative Procedures Act, thus nullifying all FCC actions of that type. Following a stipulation between TDS and the FCC about how to fulfill the plan in light of that development, disputes emerged. The bankruptcy court overruled two of the FCC’s three objections. The district court reversed the bankruptcy court as to one objection, but the Seventh Circuit reinstated the bankruptcy court’s ruling, largely deferring to the bankruptcy court’s “interpreting a plan of reorganization that it had confirmed.” In re Airadigm Commc’ns, Inc., Case Nos. 08-3585, et al. (7th Cir.).
• On August 2, 2010, the US Court of Appeals for the Fifth Circuit affirmed a Texas federal district court’s ruling that denied UTEX’s appeal of a Texas Public Utility Commission (TX PUC) order refusing to consider proposed amendments to UTEX’s ICA with Southwestern Bell. In a 2004 PUC proceeding initiated by AT&T following the FCC’s 2003 Triennial Review Order (and later the FCC’s 2005 Triennial Review Remand Order), AT&T sought to conform its ICA with UTEX (and others) to the FCC’s new rules. In that same proceeding, UTEX also sought to negotiate pricing and other terms to allow it to access network elements allegedly available after the change in law. The district court ruled that the “missing provisions UTEX requested to have added were available at the time the 2000 Agreement was negotiated and finalized,” and that the TX PUC therefore did not act arbitrarily or capriciously in ruling that UTEX’s request was outside the scope of the proceeding. The Fifth Circuit agreed with the district court that the elements at issue “did not arise as a result of changes implemented by TRO or TRRO,” and therefore affirmed the district court’s denial of UTEX’s appeal. UTEX Commc’ns Corp. v. Pub. Util. Comm’n of Tex., Case No. 09-50313 (5th Cir.).

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. The House will return on August 10, 2010, to vote on a bill regarding education and health care, and then will go out of session. Both chambers return on Tuesday, September 6, 2010.
• According to a recent press release by Sen. John Kerry, D-Mass., there will be no Open Internet legislation from Congress in the near future. He stated that “Congressional stalemate is making a legislative solution look increasingly unlikely in the near term. As a result, Chairman Genachowski is now moving forward along a regulatory path.” The release is 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.

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