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.

We wish all of you a happy and prosperous New Year!

Federal Communications Commission (FCC) Announcements

• On December 23, 2010, the FCC released its “net neutrality” order. Preserving the Open Internet, GN Docket No. 09-191, Report and Order, FCC 10-201. It is available here. Our summary of the Order is available here.
• The FCC has released a Notice of Proposed Rulemaking seeking comment on proposed changes to the Commission’s Registration System, or “CORES”. Comments are due 30 days after publication in the Federal Register, and Reply Comments are due 15 days thereafter. MD Docket No. 10-234. To view the item, click here.
• EXTENSION GRANTED: The FCC has extended the comment dates in the “bill shock” proceeding. Comments now are due January 10, 2011. Reply Comments are due February 8, 2011. CG Docket Nos. 10–207 and 09–158, Empowering Consumers to Avoid Bill Shock; Consumer Information and Disclosure, Notice of Proposed Rulemaking, FCC 10–180 (rel. Oct. 14, 2010). More information may be found here.

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

Federal Trade Commission (FTC) Developments

• On December 21, 2010, the FTC's new chief technologist, Dr. Edward Felton, provided additional insight into the agency’s possible role in developing and enforcing an online “do-not-track” mechanism. Dr. Felton explained that the system as currently envisioned would not apply to ordinary first-party tracking or to a first party’s use of a service provider to provide website analytics, but instead would apply only to companies engaged in tracking users across websites without their consent. Dr. Felten also provided clarification as to the FTC’s possible enforcement role, explaining that if the “do-not-track” mechanism ultimately is adopted through industry self-regulation, then the agency’s enforcement role would likely be one of preventing a company from deceiving consumers about the company’s participation in the system. If, however, Congress directs the FTC to create and enforce a “do-not-track” mechanism, the agency would take a more active role in investigating and prosecuting sites that engage in improper tracking, regardless of whether such complaints are the result of a consumer-originated complaint or an agency-initiated investigation.
  

  A copy of the interview can be found here.

• Comments on the FTC’s Caller ID Advanced Notice of Proposed Rulemaking are due January 28, 2011. A link to the NPRM can be found here.
• Comments on the privacy report issued December 1, 2010, by FTC staff are due January 31, 2011. A copy of the report can be found here.

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

Developments in Intercarrier Compensation

• On December 20, 2010, the Nebraska Public Service Commission granted several rural LECs an extension of time in which to answer AT&T Communications of the Midwest, Inc.’s complaint against them. AT&T filed its formal complaint on November 17, 2010, alleging that the rural LECs were charging unfair and unreasonable intrastate switched access rates and were maintaining inefficient network architecture. Due to ongoing settlement negotiations, the LEC defendants were granted until January 12, 2011 to notify the Commission of any settlement with AT&T or, in the alternative, to answer AT&T’s complaint by January 31, 2011. The LEC defendants include Arapahoe Telephone Company, Benkelman Telephone Company, Inc., Cambridge Telephone Company, Cozad Telephone Company, Diller Telephone Company, Eastern Nebraska Telephone Company, Great Plains Communications, Inc., Hartington Telecommunications Company, Hartman Telephone Exchanges, Inc., Henderson Cooperative Telephone Company, Southeast Nebraska Communications, Rock County Telephone Company, Three River Telco, and Wauneta Telephone Company. Docket No. FC-1348.

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

Compliance Notes

• On December 13, 2010, the FCC announced that the universal service contribution factor for the first quarter of 2011 will be 15.5%. A copy of the notice can be found here. DA 10-2344.
• All providers of interconnected fixed or non-nomadic Voice over Internet Protocol (VoIP) services as of December 1, 2010 will be required to register with the Illinois Commerce Commission (ICC) by January 1, 2011, in accordance with 220 ILCS 5/13-401.1. Thereafter, new providers will be required to register with the ICC at least 30 days prior to their provision of service within Illinois. The ICC has posted a copy of the registration form here.

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

Stimulus This Week

• The Office of the Inspector General of the Department of Commerce (OIG) has announced an inquiry into a Broadband Technology Opportunities Program (BTOP) grant issued by the National Telecommunications and Information Administration (NTIA) to Motorola, Inc. for construction of a public safety broadband network in the San Francisco Bay Area. The grant totaled $50.6 million. In a memo dated December 17, 2010, to NTIA Administrator Lawrence Stickling, Commerce Department Inspector General Todd Zinser noted that OIG had received a letter from Santa Clara County Executive Jeffrey Smith expressing concern about the grant to Motorola, after NTIA rejected Mr. Smith’s request that NTIA postpone the award “until concerns regarding the procurement and vendor selection process have been addressed and well understood.”
  

  In order to respond to Mr. Smith’s concerns, OIG will review “the procedures followed by NTIA in reviewing the initial complaint from the County of Santa Clara and City of San Jose prior to preparing its October 1, 2010, response, and subsequent actions to look into the issue.”

• On December 22, 2010, President Obama signed a continuing resolution (H.R. 3082), passed by the US Senate and the House of Representatives on that day, that will give NTIA oversight funding for the BTOP program until March 4, 2011. The continuing resolution gives NTIA $40.6 million.

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

Broadband News

• No resolution emerged in the Comcast-Level 3 dispute that has been ongoing since November. Level 3 generated the most activity recently, filing several ex parte letters with the FCC. The first letter claims that Comcast disclosed private negotiations despite a confidentiality agreement, and that Level 3 did not believe the “trial” offer by Comcast would result in a meaningful resolution of the dispute. Level 3 is seeking a resolution that does not require it to pay anything to Comcast. The second ex parte concerns the Comcast-NBC Universal merger. Calling Comcast a “gatekeeper” for online video entertainment, Level 3 argues that Comcast will have an incentive to discriminate against other online video providers, because they will compete with Comcast’s cable programming and NBC’s online videos. Level 3’s CEO, James Crowe, has also recently filed a letter with the FCC requesting conditions on the Comcast-NBC merger, including requiring Comcast to interconnect with Internet backbone carriers on nondiscriminatory, fair, and reasonable terms. It has been reported that a draft order approving the merger has been on circulation at the FCC since December 23, 2010.
  

  Level 3’s letters are available here and here.
  
  Mr. Crowe’s letter is available here.

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

Telecom Privacy News

• Amid concerns about privacy breaches, the Mobile Marketing Association (MMA) stated recently that it will begin work on a “comprehensive set of mobile privacy guidelines” to help marketers and phone users navigate the rapidly changing landscape. The MMA’s announcement came shortly after the FTC called for a “Do-Not-Track” Registry to protect Internet users. The Obama administration has also urged a “privacy bill of rights” to regulate the commercial collection of data online. The MMA stated that it hopes to develop guidelines that cover multiple types of marketing on mobile phones, including text messages, email, and voice calls. The MMA’s current guidelines contain no specific provisions for protecting privacy in mobile applications. No specific date for the release of the new guidelines was announced.

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

In the Courts

• On December 20, 2010, the United States Court of Appeals for the Federal Circuit affirmed the ruling of the federal district court in Seattle that T-Mobile’s prepaid wireless refill cards and accompanying cellular service did not infringe Israel-based Aerotel’s 1987 patent for its system for making prepaid telephone calls. The trial court construed the Aerotel patent to require each caller to enter manually a special code after dialing a special exchange, and as such that process precluded Aeretol from proving its infringement claim against T-Mobile’s prepaid calling system. The Court of Appeals affirmed, agreeing that the trial court’s construction of the patent was “compelled by the natural sequence of steps in a telephone call” and by the language of the patent. Aerotel Ltd. v. T-Mobile USA, Inc., No. 2010-1179 (Fed. Cir.).
• On December 17, 2010, the United States District Court for the Eastern District of Alexandria rejected T-Mobile’s suit alleging that the Fairfax County Board of Supervisors violated section 332 of the Communications Act when it denied T-Mobile’s application to install three antenna panels on a proposed extension to an existing 100-foot cellular pole. T-Mobile also argued that the Board “unreasonably discriminated among providers of functionally equivalent wireless services” and prohibited the provision of wireless services. The district court denied T-Mobile’s motion for summary judgment and granted the Fairfax Board’s motion, finding that the Board’s concern for the repeated complaints of nearby residents is a sufficient basis on which to deny T-Mobile’s application. The court concluded that the “record provides significant evidence in support of the board’s determination that T-Mobile’s proposed facilities create a different visual and aesthetic impact on the … residential community and the historic and scenic Georgetown Pike.” T-Mobile Northeast LLC v. Fairfax County Bd. of Supervisors, No. 1:10-cv-117 (E.D. Va.).

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

Legislative Outlook

• Rep. Henry Waxman, D-Cal., outgoing Chair of the House Commerce Committee, released a statement giving the FCC and Chairman Genachowski “enormous credit” for adopting the Open Internet Order. Calling it a “bill of rights for users of the Internet,” Rep. Waxman called the order a “huge advance over the status quo” and noted that it “constitutes a floor, not a ceiling, on basic protections.” His full statement is available here.

Upcoming Events

• The Federal Communications Bar Association is hosting a breakfast with Scott Blake Harris, General Counsel of the Department of Energy, on January 18, 2011, and a luncheon with Commissioner Michael Copps on February 15, 2011. For more information or to register, click here www.fcba.org.

For further information, please contact any of our attorneys in the Arent Fox Telecommunications Group, including: