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 everyone a safe July 4th Holiday!

Jump to a Topic:
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 will be held July 12, 2011, at 10:30 am Eastern. The tentative Agenda contains three items: a Notice of Proposed Rulemaking on the impact of the Local Community Radio Act on low-power FM licensing; a Notice of Proposed Rulemaking on “cramming”; and a Report and Order on E911 location information. 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 Federal Trade Commission recently released information aimed at better educating consumers about mobile applications. Focused heavily on privacy, it is part of the agency’s ongoing public education effort to protect consumers who use smart phones and other mobile devices. The FTC also hosts OnGuardOnline.gov, a site that provides general information about apps and data collection practices. To read the information, click here.

Federal Trade Commission (FTC) and Privacy Regulation

• Google has confirmed that the FTC is investigating the company, but the exact nature of the review has not yet been disclosed. Google stated in a blog post that it is “unclear” what the FTC’s concerns are. Reports are that the agency is examining whether Google has abused its search dominance to the detriment of competitors. Other companies have apparently cooperated with the FTC in the review. Google stated that the use of its service is voluntary, so it focuses solely on the user and providing the best search results. Google’s blog post is available here. Google’s webpage on competition is available here.
• On June 29, 2011, FTC Commissioner Julie Brill testified on behalf of the agency before the Senate Commerce Committee regarding privacy on the Internet. She stated that the FTC promotes a “privacy by design” approach for companies to incorporate “privacy protections into their everyday business practices, such as collecting or retaining only the data they need to provide a requested service or transaction, and implementing reasonable security for such data.” She also highlighted a “Do Not Track” solution as a “universal, one-stop choice mechanism for online behavioral tracking.” The FTC press release regarding Commissioner Brill’s testimony is available here.
• News reports are circulating that the FTC is investigating Twitter and its relationships with third-party application providers, such as UberMedia Inc. which creates applications for advertising and photo sharing, among other uses. Twitter has bought several third-party providers over the last year, including TweetDeck, and is suspected of disadvantaging unaffiliated third-party apps.
• The FTC and the Department of Justice’s Office for Victims of Crime will host “Stolen Futures: A Forum on Child Identity Theft,” on July 12, 2011, at the FTC Conference facility at 601 New Jersey Avenue N.W., Washington DC, 20001. The forum will run from 8:30 am to 5:00 pm Eastern, and according to the tentative agenda will feature several guest speakers, including Kathleen Styles, Chief Privacy Officer of the U.S. Department of Education. For more information, click here. To view the agenda, click here.
• On May 26, 2011, the FTC announced that it will be updating its advisory guide on how federal advertising law applies to marketing and sales on the Internet. It last issued guidance on the topic in 2000, in a document entitled “Dot Com Disclosures: Information About Online Advertising.” The agency seeks public comment on possible revisions to the guide, particularly on the technical and legal issues that marketing entities and consumer advocates would like to see addressed. Comments may be submitted until July 11, 2011.
  
  A copy of the Staff Invitation for comments on the Dot Com Disclosure Business Guidance Publication can be found here.
  
  A copy of the FTC’s 2000 guide, “Dot Com Disclosures,” can be found here.
  
  Interested parties may be submit comments electronically here.

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

Developments in Intercarrier Compensation

• On June 30, 2011, the Pennsylvania Public Utility Commission (PA PUC) voted to require rural local exchange carriers (LECs) within the state to reduce their intrastate access charge rates to mirror their interstate levels. At the same time, the Commission is permitting rural LECs to increase their residential and business customer rates during the four-year implementation period to offset lost revenues. The PA PUC stated that although the reform measures are “not a perfect solution, our action today attempts to strike the appropriate balance between reforming access rates and protecting rural Pennsylvanians and the companies that have provided them with reliable and affordable telephone services for over 100 years.” The PA PUC estimates that interexchange carriers (IXCs) will save approximately $50 million from the reduced rates and it “expects the IXC carriers to pass on the savings to their end-user customers because the commission no longer regulates the long-distance rates of the IXCs.” Docket Nos. I-00040105 and C-2009-2098380.
• On June 27, 2011, Verizon California Inc., MCImetro Access Transmission Services LLC, and MCI Communications Services, Inc. answered and moved to dismiss a complaint filed by Cox California Telcom, LLC with the California Public Utilities Commission (CPUC). In its complaint, Cox alleges that Verizon has unlawfully refused to pay access charges for traffic that either originates or terminates in Voice over Internet Protocol (VoIP) format. In moving to dismiss, Verizon asserts that the CPUC does not have jurisdiction over the traffic in dispute, because the FCC has preempted state regulation of VoIP traffic. Verizon further stated that even if the CPUC had jurisdiction over Cox’s complaint, the claims would fail because Cox was not providing Verizon switched access service pursuant to the terms of Cox’s intrastate tariff. According to Verizon, the LEC entity of Cox does not have any relationship with its alleged end users or provide any facilities connecting the end users that send or receive the traffic in dispute. Rather, Verizon asserts that Cox’s affiliated cable company is the entity providing the services and facilities to the end users, and thus Cox is in violation of its tariff by charging for access services it is not providing. Docket No. C-11-05-012.

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.
• Carriers certified in California having gross annual intrastate revenues exceeding $750,000 are required to submit their quarterly PUC User Fee by July 15, 2011. Gross intrastate revenues exclude inter-carrier sales, directory listings, and equipment sales. More information on this filing may 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.
• Carriers that are certified in California and have annual gross intrastate revenues in excess of $750,000 are required to pay the California Public Utilities Commission’s Annual User fee on a quarterly basis. The filing for the second quarter of 2011 is due July 15, 2011. More information on this filing 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

• In connection with the Open Internet Order, the FCC Enforcement Bureau and Office of General Counsel have issued a Public Notice containing guidelines for complying with the transparency aspect of that order, which requires disclosure of network management practices. To view the Public Notice, click here.

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

In the Courts

• On June 29, 2011, a California appeals court affirmed the dismissal of a putative class action against various AT&T entities for the wireless carrier’s practice of charging its California customers sales tax on the full, undiscounted price of their phones, instead of the price for which AT&T actually sells the phone. The relevant California tax law requires carriers to pay sales tax on the full price of the device when bundled with wireless service, but gives discretion to the carrier as to whether it collects the full tax from the consumer. The putative class representative alleged that she relied on AT&T’s representations that it only collects “mandatory” taxes; she then, in an amended complaint, alleged that an AT&T representative told her that it is “required by law” to collect the full tax. The appeals court agreed that the case was properly dismissed because the plaintiff did not allege that “she could have obtained a bundled transaction for a new cellular telephone – the telephone that she selected – at a lower price from another source,” which could have supplied the necessary injury-in-fact element of her claims. The court concluded that the plaintiff did not “allege a ‘tangible increased cost or burden’ as a result of AT&T’s purported misrepresentation.” The court did not explain how that could allegation could be made in light of AT&T’s practice of securing exclusive rights to sell particular mobile devices. Bower v. AT&T Mobility, LLC, Cal. Ct. App. 2d Dist. No. B223364.
  
  The California Public Utilities Commission has opened an investigation into AT&T’s proposed acquisition of T-Mobile, including how it will affect consumer choice and prices. CPUC Investigation 11-06-09.
• On June 28, 2011, the United States Court of Appeals for the Eighth Circuit reversed a Missouri district court’s denial of a challenge from a homeowners’ group to a consent judgment entered into between Franklin County, Missouri and St. Charles Tower that would have allowed St. Charles Tower to build a cellular tower. The County Planning and Zoning Commission originally denied the tower application, but, upon being sued in federal court, it entered into a consent judgment with the tower company, granting it the necessary permits to build the proposed facility. The Eighth Circuit “agree[d] with Intervenors that the consent judgment’s remedy – compelling the issuance of the conditional use permit without regard to the procedures specified in the [County’s] Land Use Regulations – violated state law.” The consent decree, for example, was not achieved through a concurring four-fifths vote, or accompanied by written findings and conclusions. The court concluded that “State actors cannot enter into an agreement allowing them to act outside their legal authority, even if that agreement is styled as a ‘consent judgment’ and approved by a court.” The case is remanded to the district court to vacate the consent judgment. St. Charles Tower, Inc. v. Kurtz, No. 10-2412 (8th Cir.).

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

Legislative Outlook

• Rep. Bono-Mack, R-Cal., and Rep. Greg Walden, R-Ore., are spearheading this Congress’s review of privacy issues at the request of House Commerce Committee Chair Fred Upton, R-Mich., and have announced a series of hearings to begin with a session on July 14, 2011, titled “Internet Privacy: The Views of the FTC, the FCC, and NTIA.” For more information about this initiative, click here.
• FCC Chairman Genachowski has agreed to set an August deadline for repealing the Fairness Doctrine and other regulations, pursuant to a letter to the Office of Information and Regulatory Affairs (OIRA) from Chairman Upton, Rep. Walden, and Rep. Cliff Stearns, R-Fla., Chair of the House Oversight Subcommittee. To view the press release on this decision, click here.
• Senators John “Jay” Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, and John Kerry, D-Mass., Chair of the Senate Communications Subcommittee, along with eight senior Committee members, have sent a letter to Senator Dan Inouye, D-Haw., Chair of the Senate Appropriations Committee, and Sen. Cochran, D-Miss., Ranking Member, asking that they not take any action to deny funding to the FCC that will be used to implement the Open Internet Order. To view the text of the letter, click here.
• The House is scheduled to be out July 4-6 for the July 4th holiday. The Senate will be out July 4-8.

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.

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.