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 Intercarrier Compensation l Compliance Notes l Broadband News l In the Courts l Legislative Outlook l Events

Federal Communications Commission (FCC) Announcements

• The next FCC Open Meeting is August 9, 2011. The tentative Agenda contains four items: a Report and Order and Further Notice of Proposed Rulemaking on using spectrum for wireless backhaul; and three items related to foreign ownership guidelines and review, including an Order on Reconsideration of prior orders regarding Verizon's acquisition of Rural Cellular Corporation and Alltel. To view the tentative Agenda, click here.
• The FCC is seeking nominations for persons to serve on the Open Internet Advisory Group which was created by the Open Internet Order adopted in December 2010. Nominations are due September 1, 2011. For more information, click here.

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

The Mobile Market

• The United States Food and Drug Administration (FDA) this week announced the availability of draft guidelines for "Mobile Medical Applications". Due to the increasing use and expansive scope of mobile applications, the FDA has issued the draft guidance to "clarify the types of mobile apps to which FDA intends to apply" its regulatory requirements. Consumers and interested parties may submit comments on the draft through October 19, 2011. The draft guidelines are available here. Filing instructions are provided in the document.
• On July 20, 2011, Senate Antitrust Subcommittee Chairman Herb Kohl, D-Wis., sent a letter to Attorney General Eric Holder and FCC Chairman Julius Genachowski, urging them to block AT&T's proposed acquisition of T-Mobile. "To replace the AT&T phone monopoly of the last century with a near-duopoly of AT&T and Verizon today would be harmful to consumers, contrary to antitrust law and not in the public interest under communications law," Sen. Kohl argued. He also expressed "considerable doubt" that Sprint Nextel would survive if the transaction is approved. To view the full letter, click here. Those opposed to the merger, including the Consumers Union, CompTel, the Rural Cellular Association, DISH Network, Free Press, and Public Knowledge, applauded Kohl's letter.
  
  The letter also prompted rebuttals from merger supporters. Senator Mike Lee, R-Utah, Ranking Member of the Subcommittee, stated in a responsive press release that "the merger has the potential to provide significant network efficiencies that may help alleviate capacity constraints, enable enhanced service quality, and facilitate expansion of a 4G LTE nationwide network, which would in turn create opportunities for handset innovation and continued development of data-rich applications." To view the full release, click 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 July 19, 2011, President Obama announced that he will nominate Maureen K. Ohlhausen to the FTC. Ms. Ohlhausen is telecommunications and technology lawyer who previously served at the FTC from 2004-2008 as a Director in the Office of Policy Planning. More information may found here.
• The US Department of Justice and the FTC have announced a shared role in the Google antitrust probe, which Google acknowledged on June 24, 2011, after two years of discussions. Under the agreement, DOJ will review any planned acquisitions by Google, while the FTC will review Google's presence in the Internet search market.
• On July 21, 2011, FTC Chairman Jon Leibowitz spoke at a Brookings Institution forum on privacy and argued for a national data breach notification standard. He noted that 47 states have laws that require notification to consumers of data breaches, but feared that a state-by-state approach could lead to a "crazy quilt patchwork of statutes". He declined to comment on the SAFE Data Act, which recently passed a House Subcommittee and establishes a national notification policy, because he has not yet read the bill. See Legislative Outlook below. More information is available here.

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

Developments in Intercarrier Compensation

• On July 20, 2011, competitive local exchange carriers (CLECs) Eschelon Telecom of Colorado, Inc. d/b/a Integra Telecom, McLeodUSA Telecommunications Services LLC d/b/a PAETEC Business Services, and tw telecom of Colorado, LLC filed a motion for preliminary injunction with the Colorado Public Utilities Commission (PUC) that would prevent Qwest from adopting changes to its Operational Support Systems (OSS). The PUC recently denied the motion of Qwest and CenturyLink to dismiss the CLECs' complaint alleging that those carriers are violating conditions contained in a multi-state merger settlement agreement from November 2010 related to OSS. The CLECs assert that Qwest announced it will retire and replace its OSS with a new repair system before the end of 2011, despite the fact that the terms of the settlement agreement require Qwest to use and offer the legacy Qwest OSS for a two-year period. Docket Nos. 10A-350T and 11F-436T.
• On July 15, 2011, South Dakota LECs Midcontinent Communications, Knology of the Plains, Inc., and Knology of the Black Hills, LLC filed a voluntary motion to dismiss their complaint against Verizon Business Services with the South Dakota Public Utilities Commission (SD PUC) after the parties reached a settlement agreement. The LECs alleged in their complaint that Verizon had refused to pay intrastate access charges associated with VoIP traffic. Verizon previously sought to have the case dismissed or stayed, arguing that the SD PUC lacked jurisdiction over VoIP traffic, which is interstate in nature. The terms of the settlement were not disclosed. Docket No. TC10-096.

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

• FCC Form 499-Q is due August 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 second quarter of 2011 and projected revenues for the fourth quarter of 2011. A copy of the current FCC Form 499-Q can be found here.
• The Universal Service contribution factor for the Third Quarter of 2011 is 14.4%. A copy of the notice can be found here.
• Carriers that provided service between the United States and foreign points in the 2010 calendar year are required to file their annual International Traffic Data report by July 31, 2011. Carriers required to file this report include resellers that bill for international service that was handled by an underlying carrier. Information regarding this filing, including past reports and the filing manual, may be found here.
• Voice over Internet Protocol (VoIP) providers and Commercial Mobile Radio Service (CMRS) providers who rely on traffic studies to report interstate revenues on FCC Form 499-Q must submit these studies by August 1, 2011 to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC. The instructions to Form 499-A, which lists filing deadlines at page 5, can be found here.
• Quarterly financial reports and Performance Progress Reports (PPR) for Broadband Technology Opportunities Program (BTOP) grant recipients are due July 30, 2011 for the second quarter of 2011.
  
  The quarterly Performance Progress Reports for Broadband Sustainability Projects can be found here.
  
  The quarterly Performance Progress Reports for projects involving Public Computer Centers can be found here.
  
  The quarterly Performance Progress Reports for Broadband Infrastructure Projects can be found here.

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

Broadband News

• It was reported last week that the FCC will delay the release of a comprehensive broadband speed study until early August 2011. The study began last year and sought 10,000 volunteers to measure home broadband speed through installation of hardware that will monitor broadband speed on the volunteer's computers. See June 7, 2010 edition of This Week In Telecom. The FCC partnered with UK company SamKnows in this effort. The results of the study have reportedly been released to some companies and show that test speeds were either close to or exceeded advertised speeds.

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

In the Courts

• On July 19, 2011, the United States District Court for the Northern District of California largely dismissed a putative class action suit against AT&T Mobility in the wake of the Supreme Court's decision in AT&T Mobility v. Concepcion that the Federal Arbitration Act preempts state laws or court rulings that invalidate no-class-action clauses in consumer contracts. Here, the putative class action was brought by iPad consumers complaining that they are victims of a "bait-and-switch fraud scheme" when they paid $130 more for 3G-enabled iPads based on AT&T and Apple's advertising of an unlimited data plan that included options to switch between tiered and unlimited plans – AT&T discontinued those options soon after purchase. The N.D. Cal. dismissed the suit, because the wireless contracts require arbitration. "The argument that [AT&T's] arbitration provision is unenforceable solely because it includes a class action waiver is no longer viable," the California court noted. The court rejected arguments based on the law of states other than California, finding that, in the wake of Concepcion, "it ultimately makes little difference which states' laws are applied."
  
  One plaintiff's claim survived, because he never subscribed to AT&T's 3G service, and thus did not enter into the contract with AT&T that contains the arbitration provision. The court rejected AT&T's argument that that plaintiff still had to arbitrate his iPad-related claim on the ground that he holds a contract with AT&T for his iPhone, concluding that "Certainly a reasonable consumer would not contemplate that an arbitration agreement regarding the iPhone would bind him to arbitrate a dispute with respect to a future, unreleased device. At bottom, it cannot reasonably be that both parties intended for the iPhone 3GS arbitration clause to extend to all future Apple products that utilize [AT&T's] data network." In re Apple & AT&T iPad Unlimited Data Plan Litigation, No. 5:10-cv-02553 (N.D. Cal.).

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

Legislative Outlook

• On July 20, 2011, the House Subcommittee on Manufacturing and Trade approved HR 2577, the Secure and Fortify Electronic (SAFE) Data Act, by voice vote. Rep. Mary Bono Mack, R-Cal., Chair of the Subcommittee and author of the bill, stated that "My legislation is crafted around a guiding principle: Consumers should be promptly informed when their personal information has been jeopardized." The bill would require, among other things, that the FTC adopt rules requiring consumer notification of data breaches, but does not provide a private right of action. To view the press release about HR 2577, click here. To view the bill, click here.
• A bipartisan group of Senators, including Sen. John "Jay" Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, have issued a joint statement of support for S 911, the Public Safety Spectrum and Wireless Innovation Act. Sen. Rockefeller stated that "We made a promise almost ten years ago to stand by those who protect us no matter what. It's time now that we make good on that promise." To view the full statement, click here. To read the bill, click here.
• The Senate Judiciary Committee will hold a hearing titled "Cybercrime: Updating the Computer Fraud and Abuse Act to Protect Cyberspace and Combat Emerging Threats" on August 3, 2011, at 10:00 am Eastern in 226 Dirksen Senate Office Building. Scheduled witnesses are James A. Baker, Associate Deputy Attorney General, DOJ, and Pablo A. Martinez, Criminal Investigative Division, U.S. Secret Service. For more information, click here.

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

Upcoming Events

• Jeffrey Rummel, a Partner in our Group, will speak at the 8th Military Antennas Summit held by the Institute for Defense & Government Advancement September 12-15, 2011, in Washington, DC. For more information, click here.
• Jonathan Canis and Ross Buntrock, Partners in our Group, will speak at CompTel Plus in Orlando, Florida on October 3, 2011, on a topic titled "Mediation, Complaints and Referrals: What Does It Take to Get Disputes Resolved Before the FCC?" For further information, click here.

Please contact Stephanie Joyce or Jeffrey Rummel (contact information below) for further information.

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