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.

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FCC Announcements l The Mobile Market l FTC and Privacy Regulation l New Markets: SmartGrid and E-Health l Intercarrier Compensation l Compliance Notes l Broadband News l In the Courts l Legislative Outlook l Events

Federal Communications Commission (FCC) Announcements

• The Final Agenda for the next FCC Open Meeting to be held December 13, 2011, at 10:30 am Eastern contains an additional item not included in the Tentative Agenda. As previously noticed, the FCC will consider a Report and Order implementing the Commercial Advertisement Loudness Mitigation Act (CALM Act). The new item is the Third Report to Congress on the state of competition in the satellite communications market. To view the Final Agenda, click here.
• Comments on the FCC Notice of Proposed Rulemaking on Next-Generation 911 (NG911) service are due today, December 12, 2011, and Reply Comments are due January 10, 2012. To view the Federal Register notice, click here. To read the NPRM, click here.

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

The Mobile Market

• Sprint Nextel Corp., which owns a 49% voting stake in wireless broadband service provider Clearwire Corp., has announced that it will provide up to an additional $1.6 billion in revenue and investments to Clearwire over the next few years. Under the terms of the deal, Sprint will pay Clearwire $926 million through 2013 for unlimited use of its WiMAX network for retail services. The agreement also sets pricing through 2014, and guarantees access to the network through at least 2015. Finally, Sprint agreed to provide up to an additional $347 million of equity funding to Clearwire if Clearwire conducts an equity offering, in order to maintain its current voting interest. Following confirmation of the Sprint deal, Clearwire announced plans to sell $300-345 million of Class A common stock. Clearwire states it will use proceeds from the stock sale to fund network buildout.
• Reply Comments to the FCC Wireless Telecommunications Bureau on the state of competition in the mobile wireless industry are due due December 20, 2011. The full public notice is available here.

Please contact Ross Buntrock, Michael Hazzard, or G. David Carter (contact information below) for further information.

Federal Trade Commission (FTC) and Privacy Regulation

• On November 30, 2011, the FTC issued the National Do Not Call Registry Data Book for Fiscal Year 2011. According to the Data Book, at the end of fiscal year 2011, the Do Not Call Registry contained 209,722,924 actively registered phone numbers, up from 201,542,535 at the end of fiscal year 2010. In addition, the number of consumer complaints about unwanted telemarketing calls increased from 1,633,819 at the end of FY 2010 to 2,272,662 at the end of FY 2011. Of particular note, the number of complaint related to pre-recorded telemarketing “robocalls” increased, reaching 140,503 in September 2011, even though the majority of such calls have been illegal since September 2009. More information is available here.
• The deadline for comments on the FTC’s proposed amendments to the Children’s Online Privacy Protection Rules is December 23, 2011. The FTC press release about the proceeding is available here. The text of the Federal Register notice is available here.

Please contact Ross Buntrock, Alan Fishel, Stephanie Joyce, or Jason Koslosfky (contact information below) for further information.

New Markets: SmartGrid and E-Health

• FCC Chairman Julius Genachowski delivered a keynote luncheon speech at the 2011 mHealth Summit held just outside Washington, DC last week. Mr. Genachowki highlighted actions that the FCC has taken during his tenure to promote mobile health. “For example, last year we entered into an unprecedented partnership with the Food and Drug Administration to help ensure that communications-related medical innovations can swiftly and safely be brought to market,” Mr. Genahchowski noted. “The MOU we signed explicitly recognized the significant benefits of providing more certainty and clarity to the innovators and investors who will develop and launch the next generation of health-related communications technologies.” In addition to Chairman Genachowski, other keynote speakers included Secretary of Health and Human Services Kathleen Sebelius and Surgeon General Dr. Regina Benjamin. The full text of the Chairman’s speech is available here.
• On November 8, 2011, the Department of Energy released its “Smart Grid Data Access” Funding Opportunity Announcement (FOA) that will provide up to $8 million to promote partnerships between utilities and third-party technology innovators for the development and implementation of applications that provide access to electricity consumption data. The FOA will have two phases, with funding applications due March 1, 2012. More information is available here.

Please contact Stephanie Joyce, Jeffrey Rummel, G. David Carter, or Stephen Thompson (contact information below) for further information.

Developments in Intercarrier Compensation

• On December 5, 2011, the Pennsylvania Public Utility Commission (PA PUC) appealed the FCC’s recent order on Universal Service and Intercarrier Compensation reform (FCC 11-161) to the U.S. Court of Appeals for the Third Circuit. The PA PUC asks that the court vacate and enjoin the order on the grounds that it unlawfully preempts states' rights, violates due process, lacks evidentiary support, and is otherwise arbitrary and capricious. Pennsylvania Pub. Util. Comm’n v. FCC, No. 11-4324 (3d Cir.).
• Also on December 5, Aventure Communication Technology LLC filed with the Iowa Utilities Board (IUB) a voluntary motion to withdraw its complaint against Qwest Corporation, Qwest Communications Company, LLC and PAETEC Communications. Aventure had alleged in its April 2011 complaint that Qwest and PAETEC are sending “phantom traffic” to Aventure’s network in a “fraudulent scheme to avoid paying terminating access charges on intrastate and interstate long distance traffic terminated by Aventure at its central office in rural Salix, Iowa.” Aventure asserted that the Qwest local exchange entity, in coordination with Qwest the interexchange carrier and PAETEC, is intentionally manipulating the signaling information of interexchange traffic to make it appear as if it is local traffic and then routing it over Aventure’s facilities dedicated for such local traffic. In its motion to withdraw the complaint, Aventure noted that the FCC’s recent order on Universal Service Fund and Intercarrier Compensation reform (FCC 11-161) established rules prohibiting phantom traffic, but only on a prospective basis. According to Aventure, “the most efficient course for all parties and the Board is to withdraw the present Complaint. Aventure would then monitor its network for compliance by respondents and other carriers with the new FCC rules and would bring a new Complaint before the FCC and/or this Board to address any violations of the new rules.” Docket FCU-2011-0014.

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

Compliance Notes

• Under the FCC’s new access tariff rules adopted November 18, 2011, see December 5 Client Alert, all local exchange carriers (LECs) that trigger the “access stimulation” criteria are required to cap their switched access rates to the lowest incumbent carrier in the LEC’s service area starting December 29, 2011. All rate reductions, as mandated by the new “step-down” process, must be filed by February 13, 2012.
  
  A copy of FCC 11-161 may be found here.  (WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC Docket Nos. 01-92, 96-45; and WT Docket No. 10-208)
• Each competitive local exchange carrier (CLEC) that has an intrastate switched access tariff on file with the Illinois Commerce Commission (ICC) is required to reduce its intrastate switched access rates by an amount equal to 50% of the difference between its current intrastate switched access rates and interstate switched access rates. Those CLECs must file updated tariff pages reflecting the reduction by January 1, 2012. This is the second part in a step-down process mandated by a recent Illinois statute, and is intended to result in interstate and intrastate switched access rates mirroring each other by July 1, 2012. A notice from the ICC regarding this process may be found here.
• The FCC rule requiring CLECs to file their switched access tariffs and any supporting materials electronically went into effect November 17, 2011. A copy of the Report and Order establishing the rule can be found here. FCC-11-92, WC Docket No. 10-141.
  
  CLECs must use the Electronic Tariff Filing System (ETFS) to file their initial base tariffs by January 17, 2012. All subsequent tariff filings must likewise be made via ETFS. A copy of the FCC announcement can be found here. The FCC has issued an updated Public Notice to assist CLECs with their filings, which can be found here.  DA-11-1706, DA-11-1887, WC Docket No. 10-141.
• The Universal Service contribution factor for the Fourth Quarter of 2011 is 15.3%. A copy of the notice can be found here.

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

Broadband News

• On December 1, 2011, the House Communications Subcommittee approved the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act of 2011 that would authorize the FCC to conduct incentive auctions, a move that Chairman Genachowski has long advocated as a means to free spectrum for broadband use. The bill would also reallocate the 700 MHz D block for public safety and provide $6.5 billion in grants to construct a public safety network. It now heads to the full House Commerce Committee for debate. Rep. Walden’s discussion of the bill is available here. The House Subcommittee press release on the vote is available here. The record on the vote is available here.
• Also on December 1, the Southern Company Services, Inc. Petition for Clarification or Reconsideration of the FCC Open Internet Order was published in the Federal Register. See November 21 edition of This Week in Telecom. Southern asks the FCC to clarify its policies on so-called “specialized services” so that enterprise customers have greater assurance they can contract for specialized services from broadband providers without the risk the FCC will impose new terms and conditions fundamentally altering the services. Responses are due December 16, 2011, and replies are due December 27, 2011. The Federal Register publication is available here.  Southern’s Petition is available here.

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

In the Courts

• On December 1, 2011, the United States District Court for the Northern District of California granted both AT&T’s and Apple’s motions to compel arbitration and decertify the class of consumers suing them for, among other claims, bundling the iPhone with a two-year AT&T wireless contract without informing them that the entities have a five-year exclusivity agreement, essentially tying customers to the AT&T network for five years. The court granted AT&T’s motion to compel based on the arbitration clause in its consumer contracts, an unsurprising outcome after the Supreme Court’s Concepcion decision. But the court also granted Apple’s motion to compel arbitration, not because the Apple contracts have an arbitration clause – they do not – but on the grounds of “equitable estoppel.” The court ruled that, “having agreed to arbitrate any claim growing out of their respective contractual relationships with [AT&T], and having made a claim arising from that contractual relationship against both [AT&T] and Apple in which they allege that both Defendants jointly subverted rights under the contract, Plaintiffs are now estopped from refusing to arbitrate against Defendants [AT&T] and Apple, jointly.” The federal case is now closed, and the plaintiffs can attempt arbitration. In re Apple & AT&TM Antitrust Litigation, No. C 07-05152 (N.D. Cal.).

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

Legislative Outlook

• Rep., Fred Upton, R-Mich., Chair of the House Commerce Committee, and Rep. Greg Walden, R-Ore., Chair of the Communications Subcommittee, have sent a letter to Chairman Genachowski seeking information about the FCC’s decisions to release the Staff Report criticizing the AT&T/T-Mobile merger and to revise the spectrum screen in light of that report. The Chairmen pose 13 discrete questions about the FCC’s basis for these decisions, and request a response by December 19, 2011. To read the letter, click here.
• The House Communications Subcommittee will hold a hearing titled “ICANN’s Top-Level Domain Name Program” on December 14, 2011, at 9:00 am Eastern in 2123 Rayburn House Office Building. For more information, click here.

Please contact Stephanie Joyce (contact information below) for further information.

Upcoming Events

• The Wireline Committee of the Federal Communications Bar Association will conduct a CLE seminar titled “Understanding USF and ICC Reform” on January 19, 2012, from 6:00 to 8:15 pm Eastern. Location TBD. For more information, click here.

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

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	Michael B. Hazzard hazzard.michael@arentfox.com 202.857.6029
Jonathan E. Canis canis.jonathan@arentfox.com 202.775.5738	Stephanie A. Joyce joyce.stephanie@arentfox.com 202.857.6081
Alan G. Fishel fishel.alan@arentfox.com 202.857.6450	Jeffrey E. Rummel rummel.jeffrey@arentfox.com 202.715.8479
Adam D. Bowser bowser.adam@arentfox.com 202.857.6126	Jason A. Koslofsky koslofsky.jason@arentfox.com 202.857.8969
Joseph P. Bowser bowser.joseph@arentfox.com 202.857.6102	Katherine Barker Marshall marshall.katherine@arentfox.com 202.857.6104
G. David Carter carter.david@arentfox.com 202.857.8972	Stephen Thompson thompson.stephen@arentfox.com 202.715.8596
Marcia Fuller Durkin durkin.marcia@arentfox.com 212.484.3939