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 will hold its Open Meeting tomorrow, January 25, 2011. The final Agenda contains only one item: a Further Notice of Proposed Rulemaking on interoperability in the public safety broadband network. The previously noticed presentation on the Data Innovation Initiative has been moved to the February meeting (see below). To view the Agenda, click here.
• The next FCC Open Meeting will be held February 8, 2011. The Tentative Agenda contains four items, including the presentation on the Data Innovation Initiative, previously scheduled for the January meeting, and a Notice of Proposed Rulemaking on the Connect America Fund and Intercarrier Compensation. To view the Tentative Agenda, click here.
• The Notice of Inquiry in ET Docket No. 10-237, Promoting More Efficient Use of Spectrum Through Dynamic Spectrum Use Technologies, has been published in the Federal Register. Comments are due February 28, 2011, and Reply Comments are due March 28, 2011. Our summary of this item, released December 1, 2010, is available here. To view the Notice of Inquiry, click here. To view the Federal Register entry, click 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.
• Reply Comments in the “bill shock” proceeding 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

• In an effort to stave off regulation by the FTC and the Department of Commerce following each agency’s release of online privacy reports last December, online advertisers are banding together to implement a “self-regulatory online behavior advertising program” that they claim will protect consumers’ privacy and give them the ability to control the data used by marketers. The program, developed by the Digital Advertising Alliance, is designed to implement the self-regulatory principles released by the FTC in February 2009. Already, major advertising companies like Publicis and GroupM, which together are responsible for 40 percent of all online advertising spending, have sought to bring their clients into compliance with the program. Advertisers hope that their self-regulatory efforts will cause the FTC to reconsider or limit its proposed “Do Not Track” regime, which could have serious repercussions for the $25 billion online advertising industry. Comments on the Department of Commerce’s Privacy Report are due January 28, 2011, and comments on the FTC’s Privacy Report are due January 31, 2011. A copy of the FTC Privacy Report can be found here. A copy of the Department of Commerce Privacy Report 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.

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

Developments in Intercarrier Compensation

• On January 20, 2011, Verizon appealed the FCC’s Open Internet Order in the United States Court of Appeals for the District of Columbia Circuit. In a press release, Verizon stated, “We are deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself. We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers.” Verizon’s press release is available here. To view the Notice of Appeal, click here.
• On January 11, 2011, the New York Public Service Commission (NYPSC) announced that the first meeting in its proceeding to examine the intrastate switched access rates of Verizon-New York will be held February 8, 2011. Sprint had petitioned the NYPSC to examine the rates, claiming that Verizon’s intrastate rates are four times higher than its interstate rates. In the meeting notice, the NYPSC stated that “the justification for continuing intrastate access charges at current levels should be re-examined … . Because we have not considered access charges for many years, and significant changes have transformed the market and regulatory environment, the time has come to reassess Verizon’s intrastate access charges.” Docket No. 09-M-0527.
• On January 18, 2011, Bandwidth.com, Inc., a privately held telecommunications company based in North Carolina, announced that it has signed a commercial agreement with the Verizon wireline companies under which the parties will terminate each other’s VoIP traffic at a rate of $0.0007 per minute. This rate will apply to all traffic that originates from or terminates to a VoIP end user. John Murdock, President of Bandwidth.com, stated that “[f]or too long, uncertainty over what charges apply to VoIP traffic has served as a wall to the innovations customers want and the lower prices they need. We are delighted to be working with Verizon in reaching a commercial deal that hopefully will serve as a path for the industry and service providers to move forward and better serve customers.”
• On January 14, 2011, AT&T Texas filed a status report with the Public Utility Commission of Texas stating that AT&T and Sprint Spectrum, LP have not yet reached a settlement to their ICA dispute but that negotiations are still ongoing. AT&T filed its complaint against Sprint in October of 2009, alleging that Sprint was failing to pay AT&T the proper charges for inter-MTA traffic under the parties’ ICA as a result of Sprint deliberately routing this traffic over trunks dedicated to local traffic. AT&T also alleged that Sprint failed to update the related billing factor after AT&T quantified the misrouted traffic. AT&T asserts that Sprint owes approximately $1.1 million. In its status report, AT&T requested until February 21, 2011 to continue further negotiations. Docket No. 37610.

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

Compliance Notes

• Carriers that have received telephone numbers from the North American Numbering Plan Administrator (NANPA), a Pooling Administrator, or another carrier are required to file their Numbering Utilization/Forecast (FCC Form 502) by February 1, 2011. This filing may be made electronically by logging in here. A user name and password are required.
• FCC Form 499-Q is due February 1, 2011 for all filers that are not considered to be de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the fourth quarter of 2010 and projected revenues for the second quarter of 2011. A copy of the current FCC Form 499-Q can be found here.
• The Universal Service contribution factor for the first quarter of 2011 will be 15.5 percent. A copy of the notice can be found here. DA 10-2344.
• Carriers providing tariffed services in California as of January 1, 2011 are required to file a complete copy of their tariffs on file with the California Public Utilities Commission (PUC) by February 1, 2011 on CD-ROM. This is an annual filing requirement at the PUC. A copy of the notice letter, which includes specific filing instructions, 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 January 18, 2011, the Rural Utilities Service (RUS) released a report on the monies granted or loaned for projects under the Broadband Initiatives Program (BIP). In total, BIP leveraged $2.5 billion in funding to issue more than $3.52 billion in loans and grants for 320 projects. Federal accounting rules allow RUS to count the cost of the loans, rather than the principal, toward the $2.5 billion in funding under the American Recovery and Reinvestment Act (ARRA). These projects are expected to provide seven million rural residents access to broadband through the use of satellite, middle-mile, and last-mile facilities. A copy of the report can be found here.
• All recipients of funds under the Broadband Technology Opportunities Program (BTOP), administered by the National Telecommunications and Information Administration (NTIA), are required to file their annual reports with NTIA by January 30, 2011. Information about this filing requirement for Infrastructure projects can be found here; information for Public Computer Center projects can be found here; and information for Sustainable Broadband Adoption projects 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 January 5, 2011, the FCC announced the Open Internet Challenge designed to encourage the public to create applications to monitor Internet providers’ compliance with the Open Internet rules and to encourage research into the same. One winner will get a trip to Washington, DC and will be honored at an FCC Chairman’s reception. The submission deadline is June 1, 2011, and winners will be chosen by a public vote and a panel of experts. More information can be found here.
• The dispute between Comcast and Level 3 continues publicly in various ex parte letters filed with the Commission recently. Voxel dot Net, Inc.’s January 11, 2011 letter to the Commission supported Level 3’s arguments that Comcast is violating Open Internet principles because it is forcing hosting companies like Voxel “to pay Comcast to serve its broadband subscribers. Voxel expressed it belief that Comcast was violating the prohibition on paid prioritization and blocking lawful applications. Verizon, on the other hand, stated in a January 13, 2011 ex parte that the dispute appears to be a “run-of-the-mill commercial negotiation over the terms of a peering arrangement in which one party now seeks to obtain a negotiating advantage by converting the negotiation into a regulatory dispute.” Level 3 responded to Verizon the next day, stating that Verizon confused the issue between “backbone peering” and Comcast’s discriminatory practices related to Level 3’s traffic. Although the Commission has not addressed the dispute thus far, Commissioner McDowell stated in his remarks at the TechFreedom at a symposium on January 19, 2011 that he does not believe the Comcast-Level 3 dispute should be before the Commission, even if the Commission had authority over the dispute. Voxel’s letter is available here. Verizon’s letter is available here. Level 3’s letter is available here.
• The FCC and the Department of Justice approved the Comcast-NBC Universal merger, with conditions, on January 18, 2011. The conditions are similar to the Open Internet rules, including a requirement that Comcast make its content available to distributors and allow purchasers to obtain Internet from Comcast without buying cable as well. The conditions also require Comcast to offer inexpensive broadband service and computers to low-income households. A news release related to the approval is available here. The Order is available here.

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

Telecom Privacy News

• Rep. Cliff Stearns, R-Fla., has indicated that he is working to develop a privacy bill for the new session of Congress that reflects stakeholder comments on a draft bill that Rep. Stearns and former Communications Subcommittee Chairman Rick Boucher, D-Va., developed last year. Stearns’ office reports that he plans to offer the new bill soon, but specifics are not yet available.
• Lawyers for Google, Inc. went to court in Madrid last week to address demands by Spanish authorities that the company delete links to websites containing information that officials say violates Spaniards’ privacy rights. Spain’s Data Protection Agency, which has issued 90 orders for Google to take down links, said it filed the orders against Google at the request of individuals who lodged complaints and because the original publishers of the material cannot legally be ordered to take them down. The National Court heard argument on Wednesday from both sides on the first five orders to be appealed. The cases include a surgeon who was absolved of charges of criminal negligence in a 1991 case but who sees a Spanish newspaper reference to the original case - and not the acquittal - whenever his name is keyed into Google’s search engine. Another case involves a woman who was denied a local government grant years ago but reference to her grant application keeps appearing in searches using her name. Google fears that a negative ruling by the court would effectively make it accountable for the material it provides on the Internet. Lawyers for Google pointed out that the data agency had not called on any of the news providers to modify or remove their content.
• Police in Huntington Beach, California will not be posting the mug shots of habitual drunk driving suspects on Facebook following the rejection last week of Councilman Devin Dwyer’s proposed ordinance that would have required police to post the mug shots online. Dwyer believed that such an ordinance would shame people into changing their behavior, but the Police Department opposed the move, saying it would alienate residents. Huntington Beach, with a population of 200,000, is ranked first in the state for alcohol-related traffic fatalities among cities of similar size. Dwyer’s proposal alarmed privacy advocates and defense lawyers who worried it might impact the presumption of innocence for suspects.

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

In the Courts

• On January 19, 2011, the US Supreme Court heard oral argument in FCC v. AT&T, which arises out of AT&T’s claim that the FCC could withhold documents otherwise responsive to a Freedom of Information Act (FOIA) request on the ground that AT&T qualifies for FOIA’s “personal privacy” exemption. The FCC disagreed with that interpretation, but the US Court of Appeals for the Third Circuit held that the corporate entity could qualify for the exemption. AT&T argued that it is a “person” within the meaning of FOIA, and thus has “personal privacy” interests that are protected under the Act. Liberal and conservative justices alike appeared to be skeptical of AT&T’s position. Chief Justice John Roberts, for example, noted that he had “come up with other examples where the adjective was very different from the root noun,” including “craft and crafty” and “squirrel and squirrelly.” When it was mentioned that AT&T was the first to press this argument since the law was passed nearly 40 years ago, Justice Breyer observed, “well, one reason might be that this has really never been a problem because all the legitimate ... organizations that have interests in privacy are actually taken care of by the other 17 exemptions” provided in FOIA. FCC v. AT&T, Inc., No. 09-1279.
• On January 12, 2011, the US District Court for the Western District of Oklahoma denied a motion to dismiss a putative consumer class action alleging that AT&T Mobility and Radio Shack defrauded consumers by not adequately warning them about the charges they would incur if they exceeded the $60/5GB wireless Internet plans sold with laptops. The lead plaintiff claims her overage ran “into the thousands of dollars” when she went over the prescribed limit, noting that the five gigabytes paid for each month cost $12 each, but that the overage price skyrocketed to over $500 per gigabyte. “Without intimating any view of the merits of plaintiff’s claim, the court concludes that plaintiff’s pleading provides defendants with fair notice of her fraud claim and the factual basis on which it depends,” the court concluded. Parks v. AT&T Mobility LLC, No. 09-cv-212 (W.D. Okla.).

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

Legislative Outlook

• Rep. Fred Upton, R-Mich., Chair of the House Commerce Committee, together with Rep. Greg Walden, R-Ore., Chair of the Communications Subcommittee, and Rep. Lee Terry, R-Neb., Vice Chair of the Subcommittee, released a statement on January 18, 2011 criticizing the “heavy-handed tactics of an overreaching FCC” with respect to the NBC-Comcast merger approval. Calling the merger conditions “a Chicago-style shakedown,” the congressmen stated that their committees will “exercise congressional oversight in the weeks to come.” To view the full statement, click here.
• Rep. Anna Eshoo, D-Cal., has been elected Ranking Member of the House Communications Subcommittee. For the list of Subcommittee members, click here. To read the statement of Commissioner Copps on her election, click here.

Upcoming Events

• The Federal Communications Bar Association is hosting a luncheon with Commissioner Michael Copps on February 15, 2011. For more information or to register, click here.

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