Welcome to the Fourth of July 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!

Federal Communications Commission (FCC) Announcements

• The next FCC Open Meeting will be July 15, 2010. The tentative agenda lists three items, including a Notice of Proposed Rulemaking regarding rural health care reform, and a Notice of Inquiry and Notice of Proposed Rulemaking regarding spectrum flexibility in satellite services.
• The FCC has launched its Data Innovation Initiative “to modernize and streamline how it collects, uses, and disseminates data.” Chairman Julius Genachowski has appointed Greg Elin as the first-ever FCC Chief Data Officer, along with Chief Data Officers from the Wireless, Media, and Wireline Competition Bureaus.
• The FCC will hold a public forum on the NBC Universal-Comcast merger on July 13, 2010, from 1:00 to 8:00 p.m. Central at Northwestern University Law School.
• On July 26 and 27, 2010, the FCC and the Food and Drug Administration (FDA) will hold a public meeting on the “Impact on Regulation of Converged Communications and Health Care Devices” as part of the National Broadband Plan’s recommendation to use the power of broadband to improve health care. The meeting is scheduled for 8:00 a.m. to 5:30 p.m. each day in the FCC Commission Room, located at 445 12th Street, SW, Washington, DC.

Federal Trade Commission (FTC) Developments

• The FTC has reached a settlement agreement with JAK Productions, Inc., a Georgia-based telemarketing company, and its corporate owner for allegedly having “abandoned” millions of calls when consumers answered their phones. JAK Productions is a “telefunder,”, a for-profit telemarketer that seeks donations on behalf of charities. JAK uses automated “predictive” dialers that can place calls so rapidly that there are not enough telemarketing representatives to handle all answered calls, resulting in “abandoned” calls. The FTC’s complaint alleges that JAK and its owner violated the Telemarketing Sales Rule in two respects: (1) by abandoning more than two million calls; and (2) by making thousands of calls to consumers who are on the Do-Not-Call list of the charity for which JAK was calling. The settlement prohibits JAK and its owner from continuing the practice, and imposes civil fines against them of $1.45 million and $300,000, respectively. The penalty against JAK has been suspended due to the company's representation that it is unable to pay. United States v. JAK Productions, Inc., No. 1:10-cv-2008 (N.D. Ga.), FTC File No. 072-3245.

Developments in Intercarrier Compensation

• On June 30, 2010, an administrative law judge at the California Public Utilities Commission (CPUC) tentatively consolidated four access cases brought by Pac-West Telecomm, Inc. against wireless carriers Sprint Spectrum, L.P. and its affiliates, Cricket Communications, Inc., T-Mobile West Corp., and Verizon Wireless and its affiliates. In each complaint proceeding, Pac-West is seeking a declaration that the terms, conditions, and charges set forth in its intrastate access tariff are reasonable and should be applied to the termination of intrastate, intraMTA CMRS traffic sent to it by the wireless carriers. The ALJ ruled that each of the four complaints arises out of the same set of facts and should therefore be consolidated for further briefing on the issue of whether the actions should be dismissed on the same grounds that North County Communication’s recent application to establish a rate for terminating intrastate, intraMTA CMRS traffic was dismissed. In that proceeding, the CPUC dismissed North County’s application without prejudice on the ground that, in light of an appeal filed by MetroPCS with the DC Circuit regarding the same issue, it would premature and a waste of CPUC resources to address North County’s application. The ALJ directed Pac-West to file a statement by July 12, 2010, as to why its complaints should not be similarly dismissed, and the wireless carriers may file responsive statements by July 19, 2010. Cases 09-12-014, 10-01-019, 10-01-020, and 10-01-021.
• On June 29, 2010, a CPUC Administrative Law Judge issued a proposed order to dismiss a complaint initiated by Qwest Communications Company LLC two years ago against several CLECs operating in California. The CLECs include, among others, MCImetro Access Transmission Services, XO Communications Services, Inc., tw Telecom of California, Cox California Telecom LLC, Blue Casa Communications, Inc., Mpower Communications Corp., Navigator Telecommunications LLC, Pacific Centrex Services, Inc., PAETEC Communications, Inc., and Telekenex, Inc. Qwest alleged in its complaint that the CLECs were engaging in “unjust and unreasonable” practices by entering into off-tariff contracts with certain interexchange carriers and not offering Qwest the same terms, conditions and rates. The ALJ found that Qwest’s complaint should be dismissed, because the CPUC has previously authorized CLECs to enter into voluntary individual case basis contracts with other carriers. The ALJ stated further that “Qwest has not alleged any violations of the tariff requirements but only that competitive local exchange carriers have entered into voluntary contractual rates for intrastate access services at rates below the tariffed rates, and have not offered these lower rates to Qwest. Therefore, we conclude that Qwest's allegation of contracts between carriers for lower intrastate access rates than in the carriers' tariffs does not constitute a violation of California law or Commission regulations.” Case 08-08-006.
• On June 30, 2010, the FCC rejected the Petition for Reconsideration of Feature Group IP appealing the denial of its 2007 Petition for Declaratory Ruling seeking a ruling that “voice-embedded Internet communications” are enhanced services that are exempt from access charges.

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

Compliance Notes

• Carriers providing international services, including those providing service via resale, are required to make their annual Section 43.61 International Traffic Data and associated revenue filing by July 31, 2010.
• On June 28, 2010, the Universal Service Administrative Company (USAC) issued a reminder to service providers that receive Universal Service Fund (USF) support that all payments will be made by electronic funds transfer starting August 31, 2010. This requirement was mandated by the Wireline Competition Bureau in Public Notice DA 10-270, released on June 2, 2010. Providers must confirm that USAC has electronic banking information on file or payments will be withheld. Providers may update or add electronic banking information with USAC by filing FCC Form 498 via USAC’s electronic filing system. Providers that have questions may contact USAC’s Customer Operations as (888) 641-8722 or may e-mail customersupport@usac.org.

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

Stimulus This Week

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

• On June 30, 2010, the Rural Utilities Service (RUS) announced that it has sent Second Review letters to some applicants for middle-mile project funding in the second round of the Broadband Initiatives Program (BIP). The Second Review letters request supplemental information “to address specific and limited adjustments in their NOFA II applications.” RUS has stated that the letters are not an indication that a proposed project will be accepted or denied for funding, and that it may issue additional Second Review letters in the future if needed.

Broadband News

• President Obama released a memorandum on Monday, June 28, 2010 supporting the National Broadband Plan’s recommendation to free up spectrum to meet next-generation broadband needs. The President committed the government to freeing up an additional 500 megahertz of spectrum over the next 10 years. The memorandum said much of the spectrum will come from the federal government and will direct several federal agencies to work together to identify available spectrum. Chairman Julius Genachowski released a supportive statement on President Obama’s decision, stating that spectrum is the “oxygen of wireless” and the future of the mobile economy.

   

• On July 7, 2010, at 10:00 A.M. Eastern, the Wireline Competition Bureau will convene a Staff Workshop “to discuss technical methods for performance testing of residential fixed Internet service and procedures to remotely acquire and analyze such data.”
• Commissioner Mignon Clyburn spoke before the American Library Association (ALA) on Friday, June 26, 2010, in Washington, DC about the National Broadband Plan. She praised the ALA for its prior leadership on broadband adoption and use, and highlighted reform of the Universal Service Fund as the “most significant” recommendation to increase broadband availability. She also identified the National Digital Literacy Program as part of the National Broadband Plan that will need the help of libraries to increase digital literacy.
• “Stakeholder meetings” on Open Internet issues continued at the FCC with new meetings between the FCC and Sprint and the Motion Picture Association of America, as well as another meeting with Verizon, AT&T, the National Cable & Telecommunications Association, Google, and Skype.

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

Telecom Privacy News

• Google, Inc., plans to cease its recently adopted practice of automatically redirecting users of its Chinese search engine, Google.cn, to Google’s Hong Kong search engine, Google.com.hk, a site that permits unfiltered searches. Google said that it now intends to offer a link to the Hong Kong site, rather than an automatic redirect, based on the Chinese government’s threats that it will not renew Google’s Internet Content Provider (ICP) license. David Drummond, Google’s Senior Vice President-Corporate Development and Chief Legal Officer, wrote in a blog post that “it’s clear from conversations we have had with Chinese government officials that they find the redirect unacceptable” and that without the ICP license Google “Google would effectively go dark in China.” Earlier this year Google had announced that it would no longer censor search results on the Chinese version of its website.

In the Courts

• On June 29, 2010, a California appeals court upheld Verizon Wireless’s settlement of a class action lawsuit that challenged its practice of charging $175 early termination fees. In exchange for dismissing the case, which was in trial when the settlement was reached, Verizon Wireless agreed to pay approximately $21 million to over 175,000 consumers and consent to the entry of injunctive relief. Certain hold-out class members appealed the trial court’s approval of the settlement on the grounds that notice of the settlement was inadequate, the settlement itself was insufficient and unfair, and the settlement contained improper incentive payments to the lead plaintiffs in the class. The appellate court rejected those arguments, and found that the trial court properly analyzed the settlement terms and claims of the objectors in reaching its decision to approve the settlement. White v. Cellco Partnership, Cases A124038 et al.
• On June 24, 2010, the US District Court for the Southern District of California dismissed North County Communications’ claim for declaratory relief against Sprint Nextel for its failure to pay reciprocal compensation for North County’s termination of calls from Sprint’s wireless customers. The trial court followed the recent decision by the US Court of Appeals for the Ninth Circuit against North County in the California Catalog case, 594 F.3d 1149 (9th Cir. 2010), in which North County’s similar claim against other wireless carriers was “dismissed because it lacked a favorable FCC determination and the necessary statutory footing to seek redress in federal court.” As the court concluded, “[i]n light of the substantial similarities between the claim at issue here and the claims at issue in [California Catalog], the Court concludes that the holding in [California Catalog] is controlling. That holding precludes Plaintiff from bringing the sixth claim for relief absent a determination by the FCC that the practice at issue here is unreasonable.” N. County Commc’ns Corp. v. Sprint Spectrum, L.P., S.D. Cal. Case No. 09cv2782 DMS.

Legislative Outlook

• By letter dated June 30, 2010, Rep. Henry Waxman, D-Calif., Chair of the House Commerce Committee, requested information from FCC Chairman Genachowski regarding the market for public safety communications equipment in order to assist the Committee with arranging funding for the nationwide, interoperable public safety network called for in the National Broadband Plan. To view the letter, click here.
• Congress is presently in recess. The Senate reconvenes on July 12, 2010, and the House reconvenes on July 13, 2010.
• The House Communications Subcommittee will hold a field hearing on July 8, 2010, titled “Comcast and Universal: Who Benefits?”. It will be held at 9:00 A.M. Central in the Everett Dirksen Federal Building in Chicago, Illinois.

Upcoming Events

• Telecom Group Partners Jon Canis, along with Ross Buntrock, Michael Hazzard, and Stephanie Joyce will be presenting at the COMPTEL Plus 2010 Fall Convention + Expo being held September 12-15, 2010, in Dallas.

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

Ross A. Buntrock
buntrock.ross@arentfox.com
202.775.5734

Jonathan E. Canis
canis.jonathan@arentfox.com
202.775.5738

Alan G. Fishel
fishel.alan@arentfox.com
202.857.6450

Michael B. Hazzard
hazzard.michael@arentfox.com
202.857.6029

Stephanie A. Joyce
joyce.stephanie@arentfox.com
202.857.6081

Jeffrey E. Rummel
rummel.jeffrey@arentfox.com
202.715.8479