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.

Our Group has been named once again by The Legal 500, an international publication on legal services, as an Editor’s Selection in two categories: Telecoms and Media – Regulatory and Telecoms and Media – Transactional.

Jump to a Topic:
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 Final Agenda for the next FCC Open Meeting on June 13, 2012, contains the same two items previously noticed: a Report and Order modifying the rules for certifying radio equipment; and a Report and Order and Further Notice of Proposed Rulemaking on improving efficiency in the 4.9 GHz band. The meeting will begin at 10:30 am Eastern. To read the Final Agenda, click here.

• Commissioner Mignon Clyburn he been re-nominated to the FCC. To read FCC Chairman Genachowski’s statement, click here.

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

The Mobile Market

• America Movil, a Mexico-based telecom service provider, has received clearance from U.S. regulators for its U.S. subsidiary, TracFone, to buy Simple Mobile, Inc., which is a mobile virtual network operator (MVNO) operating on T-Mobile USA’s network. Simple reportedly has over one million customers. America Movil is the leading provider of wireless services in Latin America, with over 246 million wireless subscribers as of March 31, 2012, including about 20 million U.S. TracFone subscribers. TracFone focuses exclusively on prepaid “No-Contract” cell phones and service.

• The U.S. International Trade Commission (USITC) last week voted to begin an investigation regarding the importation and sale of certain electronic devices, including mobile phones and tablet computers. The investigation stems from a complaint filed by Nokia Corporation and Intellisync Corporation alleging that certain imported mobile phones and tablet computers infringe these companies’ patents. The complainants request that an exclusion order and cease and desist order be issued. The named respondents are Exedea, Inc., HTC America, Inc., and HTC Corporation of Taiwan.

Please contact Ross Buntrock, Michael Hazzard, or G. David Carter (contact information below) for further information.

Federal Trade Commission (FTC) and Privacy Regulation

• On May 31, 2012, Microsoft announced that it will make “Do Not Track” a default feature in its next web browser release, Internet Explorer 10. This signals a shift in Microsoft’s previous policy: in Internet Explorer 9, “Do Not Track” was a feature but users were required to opt in to turn the feature on. Making “Do Not Track” a default setting will set Internet Explorer apart from other web browsers like Google Chrome and Mozilla Firefox, both of which require users to opt in to the feature. Microsoft states that it made its decision in part because “of the work of the U.S. Federal Trade Commission which ... called on the technology and advertising industries to create a more uniform and comprehensive consumer choice mechanism for online behavioral advertising targeting.” Although the FTC has not yet made a final decision regarding whether to fully support “Do Not Track”, it first proposed the policy in 2010 and has applauded companies who have decided to implement the technology. “Do Not Track” allows users to block third-party cookies, which are used to piece together Internet users’ personal information and online activity. Microsoft’s announcement is 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

• This past week, FCC Chairman Genachowski hosted a discussion with several leaders in wireless health technology to discuss the promise of mobile communications devices for improving health care and lowering costs. The Chairman’s summit included senior executives and leaders from companies at the forefront of mHealth, including Philips, Qualcomm, Verizon, and Medtronic, as well as startups such as MedApps, Telcare, TheCarrot, and WellDoc. Also present were non-profits, including the West Wireless Health Institute and the Alfred Mann Foundation, hospital leaders, and government experts from various agencies. The Chairman announced a plan for enhanced spectrum access for testing new wireless health innovations, with the goal of speeding new mHealth technologies to market. More information about the summit is available here.

• The U.S. Department of Energy and the Utilities Telecom Council (UTC) will hold the Critical Infrastructure Communications Policy Summit on June 19, 2012, in Washington, DC. The Summit will focus on “aligning policies, technologies and communications networks that support integrating variable energy resources, optimizing the use of existing resources, supporting smart cities, and public safety communications to ensure the health, safety and welfare of Americans.” More information regarding the Summit 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 June 6, 2012, the Iowa Utilities Board (IUB) directed Broadstar, LLC, d/b/a Primecast to file a revised local exchange services tariff in accordance with the IUB’s prior orders. On March 30, 2011, the IUB ruled in a separate proceeding that although Primecast offers only VoIP service, which Primecast argued is an information service not subject to the IUB’s jurisdiction, Primecast was nevertheless a “local exchange carrier” under Iowa law and is required to file a local exchange tariff and obtain a Certificate of Public Convenience and Necessity (CPCN). When Primecast then filed its tariff, the Office of Consumer Advocate (OCA) filed a petition to suspend and investigate on November 7, 2011, arguing that the tariff: (1) is in direct conflict with the IUB’s customer service rules; (2) purports to allow Primecast to provide service throughout Iowa although Primecast’s facilities are limited only to certain areas; (3) does not include standard contract forms for the various types of service offered; and (4) contains limitation-of-liability provisions that would preclude the IUB from exercising jurisdiction over certain disputes. Primecast has not yet, however, filed a revised tariff to address these issues. The IUB therefore ordered Primecast to file a revised tariff responding to OCA’s concerns within 14 days. Docket No. TF-2011-0114.

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

• On June 5, 2012, the Wireline Competition Bureau of the FCC released an Order in the Connect America docket that clarifies a number of issues relating to the step-down of intrastate rates and grants a waiver of the July 1, 2012 deadline for filing interstate access rates. The effective date of annual switched access tariffs is now July 3, 2012, because these tariffs are typically filed on 15 days’ notice; in order to meet the July 1 deadline, carriers would have had to make their filings over a weekend. The FCC is encouraging state commissions to issue a similar extension for intrastate switched access tariff filings. In addition, the Bureau clarified that carriers may apply rate reductions as to any element, provided that the resulting rate would be equal to the 2012 level set in the FCC’s Connect America Order. A copy of the Order may be found here. (DA-12-870, WC Docket No. 10-90)

• Local Exchange Carriers (LECs) that maintain switched access tariffs on file with the New York Public Service Commission (NY PSC) are required to update their tariffs in compliance with the FCC Connect America Order (FCC 11-161) by June 15, 2012. The NY PSC appended the rates Frontier and Verizon to the order to assist competitive local exchange carriers (CLECs) with their filings. A copy of the order may be found here. Case No. 12-C-0012.

• LECs operating in Iowa are required to update their intrastate switched access tariffs to comply with the Connect America Order (FCC 11-161). In this filing, LECs are required to step-down their intrastate access rates to 50% of the difference between the LEC’s intrastate access rates and interstate access rates. The Iowa Utilities Board (IUB) has set a timeline for these filings in order that the new access rates are effective July 1, 2012. LECs that believe their current intrastate access tariffs comply with the Connect America plan are required to file a letter with the IUB by July 1, 2012, explaining how their existing tariff is in compliance. A copy of the order can be found here. IAC-2012-2214.

• The Maryland Public Service Commission (MD PSC) has ordered all facilities-based LECs to update their intrastate tariffs to reflect the implementation of the Connect America Order’s Internet-protocol (IP) traffic provisions in the Connect America Order (FCC 11-161) by July 1, 2012. These provisions allow LECs to charge switched access charges for all IP-related traffic at interstate rates. The MD PSC warned that LECs that do not make these filings in a timely manner may be out of compliance and will not be allowed to charge for intrastate switched access until their revised tariff is approved by the MD PSC. A copy of the MD PSC notice can be found here. The Connect America Order may be found here.

• The Universal Service contribution factor for the second quarter of 2012 is 17.4%. A copy of the Public Notice announcing the rate can be found here. (DA-12-396).

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

Broadband News

• The FCC has announced the panelists and the agenda for its TV Broadcaster Relocation Fund Workshop to be held June 25, 2012, from 2:00-3:30 pm Eastern. The workshop regards “the Commission’s program to reimburse the costs that some broadcasters are likely to incur as a result of channel reassignments in connection with the repacking authorized by the 2012 Spectrum Act.” The TV Broadcaster Relocation Fund holds $1.75 Billion. Panelists will include representatives from Harris Corporation, Deloitte Consulting, Sprint Nextel Corporation, and the National Association of Broadcasters. More information may be found here.

• Short form applications for the FCC mobility auction must be filed between June 27 and July 11, 2012. The auction will take place on September 27, 2012 and will distribute as much as $300 million from the USF. A news release on the auction is available here.  The procedures for the auction are available 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 5, 2012, the U.S. Court of Appeals for the Third Circuit affirmed a Philadelphia district court’s reversal of the Pennsylvania Public Utility Commission (PUC) rejection of Verizon’s application of the term  “fiber-based collocator” which a component of unbundling impairment analysis. The district court agreed with Verizon that competitive local exchange carriers (CLECs) are properly classified as fiber-based collocators if they lease Verizon’s dark fiber strands under an “indefeasible right of use” and supply the optronics equipment necessary to light the fiber and carry the resulting traffic in and out of Verizon’s wire center. The PUC appealed, arguing that a CLEC must own a full fiber-optic cable or lease strands from an ILEC and operate those facilities before it can be treated as a “fiber-based collocator” for unbundling purposes. Deferring to the FCC, which filed an amicus brief supporting Verizon, the Third Circuit affirmed summary judgment for Verizon. “Since [47 C.F.R.] § 51.5 is ambiguous … we defer to  the interpretation offered by the FCC because it is consistent with the regulation and reflects the agency’s fair and considered judgment,” the court concluded. The court reasoned that “the FCC’s guidance indicates that it is the existence of an IRU generally — received from either the ILEC or another carrier, like a CFP — that is the critical component in determining whether dark fiber strands leased by a CLEC qualify it for treatment as a ‘fiber-based collocator’ under § 51.5.” Verizon Pa. Inc. v. Pa. Pub. Util. Comm’n, No. 11-2712 (3d Cir.).

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

Legislative Outlook

• On June 6, 2012, a bipartisan group of national security experts sent a letter to Senator Harry Reid, D-Nev., Senate Majority Leader, and Senator Mitch McConnell, R-Ky., Senate Minority Leader, urging them – twice – to “bring cyber security legislation to the floor as soon as possible.” The group, led by Hon. Michael Chertoff, former Secretary of Homeland Security, and Vice Admiral Mike McConnell, former Director of National Intelligence, noted that “we carry the burden of knowing that 9/11 might have been averted with the intelligence that existed at the time.” To read the letter, click here.

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

Upcoming Events

• The 16th Annual Federal Communications Bar Association Golf Tournament will be held June 18, 2012, at The Country Club at Woodmore in Mitchellville, Maryland. All proceeds will go to the FCBA Foundation. To find out more, click here.

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.