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: Smart Grid 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 FCC has released the Final Agenda for its next Open Meeting on August 3, 2012, at 10:30 am Eastern. It contains the same two items previously noticed: a Notice of Proposed Rulemaking on modernizing the cable rules to encourage the transition to digital technology; and a multi-part item regarding measures to streamline the regulation of Fixed Service wireless spectrum. To read the Final Agenda, click here.
• On July 26, the FCC announced that, via the first phase of implementation of the Connect America Fund, almost 400,000 residents of 37 states will have access to broadband service within three years. In conjunction with this announcement, the FCC released an interactive map, available here, to depict the areas receiving support. The goal of Connect America is to bring broadband to 7 million unserved rural areas within six years. A press release is available here.

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

The Mobile Market

• Senators Mark Warner, D-Va., and Olympia J. Snowe, R-Maine, last week reintroduced S. 3433, the Radio Spectrum Inventory Act of 2012, that would require the creation and maintenance of an inventory of spectrum resources in the United States. Under S. 3433, the FCC, in consultation with NTIA and the Office of Science and Technology Policy, would conduct an inventory of spectrum between 300 megahertz and 6.5 gigahertz within one year and biennially after that. The bill is similar to one previously introduced that failed to be adopted in 2009 after gaining approval in the Senate Commerce Committee. In introducing the bill, Senator Snowe stated, “I believe more can and must be done to meet the future needs of all spectrum users and properly address existing spectrum challenges. This includes a comprehensive spectrum inventory, more strategic and long-term planning of spectrum resources, and greater collaboration between the FCC and NTIA.” The text of S. 3433 is available here.
• Reply Comments on the privacy and security practices of mobile wireless service providers are due today, July 30, 2012. CC Docket No. 96-115. The text of the 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 July 20, 2012, the FTC filed comments with the FCC regarding the “cramming” of unauthorized charges on wireless phone bills. The FTC’s comments note that in the past few years both the FTC and FCC have reviewed thousands of complaints about unauthorized third-party charges on wireless bills. The FTC believes that the number of reported complaints likely understates the full extent of wireless cramming. As a result, the FTC commented that wireless providers should be required by law or regulation to give customers the option to block all third-party charges from their bills. “Wireless providers should clearly and prominently inform their customers that third party charges may be placed on the consumers’ accounts and explain how to block such charges at the time accounts are established and when they are renewed. And wireless providers should provide a clear and consistent process for customers to dispute suspicious charges placed on their accounts and obtain reimbursement.” The FTC’s comments are available here.
• The FTC will host a “Robocall Summit” on October 18, 2012, in Washington, DC. The purpose of the summit will be to examine issues surrounding illegal pre-recorded robocalls. It will also highlight industry innovations that could potentially be used to trace robocalls and prevent illegal robocallers from faking caller ID data. The Robocall Summit will be open to the public, and will include members of law enforcement, the telemarketing and telecommunications industry, consumer groups, as well as other stakeholders. More information about the FTC’s recent efforts related to robocall issues and the Robocall Summit is available here.

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

New Markets: Smart Grid and E-Health

• On July 12, 2012, the U.S. Department of Energy released its Smart Grid Investment Grant Progress Report. The Smart Grid Investment Grant (“SGIG”) program is a $3.4 billion initiative to accelerate the transformation of the United States’ electric grid by making substantial investments in the deployment of smart grid technologies and systems. The SGIG is authorized by the Energy Independence and Security Act of 2007 and is funded by the American Recovery and Reinvestment Act of 2009. The DOE’s progress report provides an overview of the program and summary information on expenditures and projects. It is available here.
• Deadlines have been set for comments on the Further Notice of Proposed Rulemaking that was adopted by the FCC in May 2012 concerning medical body area networks (MBANs). Comments regarding proposed procedures to pick an entity to coordinate MBAN use are due September 10, 2012, and Reply Comments are due September 28, 2012. ET Dockets No. 08-59 and 12-54. The FNPRM, which was combined with a First Report and Order, is available here.
• Comments on the National Institute for Standards and Technology (NIST) draft “Advanced Metering Infrastructure Smart Meter Upgradeability Test Framework” are due August 9, 2012. The Federal Register notice is available here. “Advanced Metering Infrastructure Smart Meter Upgradeability Test Framework” 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 July 25, 2012, the National Association of Regulatory Utility Commissioners (NARUC) voted unanimously to adopt a resolution to urge the FCC to assess substantial penalties on carriers that are not in compliance with the FCC’s call blocking orders. The resolution commended the FCC for its efforts over the past year to resolve rural call termination issues, in particular, the Wireline Competition Bureau’s February 6, 2012 Declaratory Ruling clarifying carriers’ obligations with respect to the routing of calls destined for rural areas. The Declaratory Ruling also stated that violations could result in forfeitures of up to $150,000 for each violation or each day of a continuing violation, up to a $1.5 million for a single act or failure to act. In its resolution, NARUC urged the FCC to expeditiously identify providers that have not changed any practices that result in the call termination issues identified in the Declaratory Ruling.

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

• Common carriers, including resellers and facilities-based carriers, that provided international telecommunications services in 2011 are required to file their international traffic data reports by tomorrow, July 31, 2012, pursuant to 47 C.F.R. § 43.61(a). The FCC reminds carriers that the reporting requirements have changed from those in previous years. Specifically, common carriers no longer are required to report traffic from off-shore points separately, and no longer are required to report traffic between off-shore U.S. points and the United States. Amendment of Part 43 of the Commission’s Rules (FCC 11-76, 26 FCC Rcd. 7274), click here and here to view.
  
  As a result of these rule changes, common carriers must report only traffic between foreign points and the United States. Please note that these changes are not reflected in the current Filing Manual for this report, but the FCC has issued a Public Notice, available here, and an attachment, available here, to assist carriers with this filing.
• The FCC has released a Report and Order stating that it is maintaining the fiscal year 2012 Interstate Telecommunications Service Provider (ITSP) Annual Regulatory Fee rate at the 2011 level. That rate is $0.00375 per assessable dollar, as reported on a company’s FCC Form 499A. Similarly, the FCC is holding the rate it assesses Commercial Mobile Radio Service providers to $0.08 per subscriber.  The Report and Order can be found here.
  
  The FCC has not announced the due date for payment of the Annual Regulatory Fees, but indicates in its Report and Order that they would be due in September. More information regarding payment of the fee can be found here. (FCC 12-76)
• Form 499-Q is due August 1, 2012, for all filers that are not considered de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the second quarter of 2012 and projected revenues for the fourth quarter of 2012. A copy of the current FCC Form 499-Q can 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, 2012, to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC.
• The Universal Service contribution factor for the third quarter of 2012 is 15.7%. A copy of the Public Notice announcing the rate can be found here. (DA-12-917)

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

Broadband News

• On July 26, 2012, Google officially announced Google Fiber, including details about service options and price. To obtain service, Google is asking citizens of Kansas City, Missouri and Kansas to pre-register and get their neighbors to pre-register to have the service installed. Google will turn on service based on “fiberhoods” where the interest, measured by pre-registrations, meets a certain level by September 9, 2012, and with the highest interest fiberhoods receiving service first. Services will include three choices, which are
  
  

  1.    Free Internet at 5 Mbps and a $300 installation fee,
  
  2.    1000 Mbps broadband at $70/month and no installation fee, or
  
  3.    1000 Mbps + Google TV at $120/ month, no installation fee, and free Nexus 7 to use as a remote control.

  More information is available in several Google Fiber blog posts available here; and here; and here.
  
  Google’s new fiber webpage is here.
• On July 23, 2012, amicus curiae filed their briefs in the D.C. Circuit appeal of the FCC’s Open Internet rules. TechFreedom, the Competitive Enterprise Institute, the Free State Foundation, and the Cato Institute filed a joint brief arguing that the Open Internet rules violate both the First and Fifth Amendments. The rules violate the First Amendment, they argue, because there is no problem solved by the rules that couldn’t already be handled through existing antitrust laws. The Fifth Amendment is impacted because it deprives network owners of their property by forcing access to content providers. Finally, the groups criticize the FCC’s use of “ancillary authority”. The joint brief argues that strict scrutiny should be applied.
  
  Georgia, Michigan, Oklahoma, South Carolina, West Virginia, and Virginia also filed an amicus brief arguing that the FCC is relying on a number of disparate statutory provisions but has no clear authority to impose common carriage requirements on broadband providers. Finally, the National Association of Manufacturers argued that the FCC lacked authority to promulgate the rules and that Section 706 of the Telecommunications Act of 1996 does not provide that authority.
  
  In other developments in the appeal, in light of Free Press’s decision to drop its appeal, CTIA withdrew as an intervenor in the case. Verizon Wireless v. FCC, Case No. 11-1355 and consolidated cases (D.C. Cir.).

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

In the Courts

• On July 24, 2012, the U.S. District Court for the Eastern District of Pennsylvania largely denied Sprint Nextel’s motion to dismiss the complaint that CLEC Line Systems, Inc. brought against it for the collection of unpaid access charges for the termination of interstate and intrastate interMTA traffic from Sprint’s customers. The court agreed with Sprint that Line Systems’ claims for violations of Sections 201 and 203 of the Communications Act were not well pled, but gave Line Systems a chance to repair the defective Section 201 claim in an amended complaint. The court rejected Sprint’s broader arguments that it should not face this suit as a matter of law on the ground that (1) Line Systems does not provide “exchange access” for this traffic under section 251(g) of the Act, or (2) Sprint is not an interexchange carrier by virtue of not billing customers expressly for interexchange services. The court noted that “Sprint apparently believes that its status as an ‘interexchange carrier’ depends on whether it charges its customers a separate fee for long distance calls. I reject this argument….” It also held that Sprint’s interMTA calls are subject to tariffed access charges. Line Systems, Inc. v. Sprint Nextel Corp., No. 11-6527 (E.D. Pa.).

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

Legislative Outlook

• On July 23, 2012, Rep. Fred Upton, R-Mich., Chair of the House Commerce Committee, and Rep. Greg Walden, R-Ore., Chair of the House Communications Subcommittee, along with dozens of Committee members, sent a letter to FCC Chairman Julius Genachowski urging him not to adopt the expanded program carriage rules for cable service that are under consideration. The members noted that today’s market for video programming is much different than in 1992 when Congress enacted program-carriage legislation. The letter goes on to warn the Chairman that “it is consumers who will ultimately bear the brunt of these expanded regulations through higher costs.” To read the letter, click here.
• On July 25, 2012, Sen. John “Jay” Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, made a statement on the Senate floor about the urgent need for cybersecurity legislation. Within his remarks he stated that, “History teaches us that disruptive technological advancements bring about both opportunities and dangers. We cannot let our exuberance blind us from this simple truth. We cannot ignore the part of the equation that is unpleasant. And this is it: These technological advancements can compromise our national security.” To read the full statement, click here.

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

Upcoming Events

• Arent Fox is hosting an event in conjunction with Mobile Monday - Washington DC titled “Women and Philanthrophy: Mobile for Good Works,” on August 13, 2012, at 6:00 pm Eastern, at its Washington, DC office. Telecom Group Partner Stephanie Joyce will moderate the event.

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.