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.

Federal Communications Commission (FCC) Announcements

• The Federal-State Joint Board on Universal Service is seeking comment on possible changes to Lifeline and Link-Up eligibility, verification, and outreach rules that may be necessary given the technological and market changes that have taken place since the current rules were adopted. (Dockets No. CC 96-45, et al.) Comments are due July 15, 2010, and Reply Comments are due July 30, 2010. Please contact Ross Buntrock, Jon Canis, Michael Hazzard, or Jeffrey Rummel (contact information below) for further information or for assistance in filing comments.

• 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. For more information, click here.

• 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

• Howard Shelanski, Deputy Director for Antitrust in the FTC Bureau of Economics, testified on June 15, 2010, before the House Subcommittee on Courts and Competition Policy recommending Congressional action to ensure that the recent Trinko and Credit Suisse Supreme Court decisions are not used to limit public antitrust enforcement actions brought by the FTC and DOJ in regulated industries such as telecommunications. In his testimony, Shelanski noted that public antitrust enforcement actions are more likely than private litigation to avoid claims that will interfere with regulation or fail to yield net benefits. A copy of the written testimony submitted by the FTC can be found here.

• The FTC Red Flag Rules become effective on January 1, 2011. The Rules are identity theft prevention rules which require companies that invoice for goods or services (including telecommunications companies) to implement programs designed to detect and prevent identity theft. Please contact Ross Buntrock, Stephanie Joyce, or Jeffrey Rummel (contact information below) for information or assistance with compliance.

Developments in Intercarrier Compensation

• On June 15, 2010, Sprint Spectrum LP, d/b/a Sprint PCS and Nextel West Corp. informed the Missouri Public Service Commission (PSC) that they will elect third-party mediation to resolve a dispute with AT&T Missouri. On June 8, 2010, AT&T filed a complaint with the PSC seeking over $14 million dollars in payment from Sprint and Nextel. AT&T alleged in its complaint that Sprint has refused to pay termination charges for interMTA wireless traffic since 2007 when AT&T disputed the parties’ intraMTA/interMTA billing factor. Under the parties’ interconnection agreement (ICA), intraMTA traffic is to be exchanged at the reciprocal compensation rate, while interMTA traffic is subject to access charges. AT&T specifically claimed that Sprint has been delivering interMTA traffic over trunks dedicated to local traffic to skew the billing factor. In response, AT&T unilaterally instituted a new billing factor it claims accurately reflects the jurisdictional breakdown of the traffic, but Sprint has refused to apply it for the last two and a half years. Docket IC-2010-0358.

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. A copy of the Commission’s Manual for Filing Section 43.61 International Traffic Data can be found here. The FCC also has set up a webpage to assist carriers with this filing which is available here.

• On June 10, 2010, the FCC announced that the third quarter contribution factor for the federal Universal Service Fund is 13.6%. A copy of the Public Notice can be found here. (DA 10-1055, CC Docket No. 96-45)

• Carriers operating in California are reminded that they must begin reporting and remitting their monthly surcharges online beginning July 1, 2010. The California Public Utilities Commission (CPUC) has unveiled a new Telecommunications User Fees Filing System (TUFFS) for carriers to make these filings. A copy of the system manual can be found here. Carriers should have received information regarding this change via US Mail or e-mail. Any carrier that has not received this information should contact the CPUC’s Telecommunications Division at telco_surcharge@cpuc.ca.gov.

• The annual reporting period for competitive local exchange carriers (CLECs) and interexchange carriers (IXCs) operating in Texas runs from June 1, 2010 to June 30, 2010. Carriers are required to file online through the Public Utility Commission of Texas website. The log in to make the filing for CLECs can be found here. The log in to make the filing for IXCs can be found here.

• The North American Numbering Plan (NANP) Administration contribution factor is 0.0000181 per assessable dollar, and the fund size requirement for the fiscal year of July 1, 2010 through June 30, 2011 is approximately $5.5 million. (DA 10-924)

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

Stimulus This Week

• On June 15, 2010, Rural Utilities Service (RUS) Administrator Jonathan Adelstein spoke at BroadbandCensus.com's Broadband Breakfast Club. In his remarks, Mr. Adelstein predicted that the second round of applications for funding under the Broadband Initiatives Program (BIP) “is going to be more than double what we invested in the first round,” due in part to a larger number of applications. RUS is expected to begin announcing awards from the second round of applications in July 2010.

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

Broadband News

• On June 14, 2010, Chairman Genachowski announced the formation of a Universal Service Working Group in order to achieve the universal service goals of the National Broadband Plan. The working group “will provide a comprehensive, collaborative approach to the FCC’s reform of universal service programs to better support broadband.” Led by Sharon Gillett, Chief of the Wireline Competition Bureau, the working group will include participation by the Consumer and Governmental Affairs Bureau, the International Bureau, the Office of General Counsel, the Office of Managing Director, the Office of Strategic Planning, the Wireless Telecommunications Bureau, and the Wireline Competition Bureau.

• As reported in our Client Advisory on June 17, 2010, click here, the FCC is seeking comment on its legal authority to adopt the proposed Open Internet principles. Comments are due July 15, 2010, and Reply Comments are due August 12, 2010. To view the Notice of Inquiry setting forth the items for comment, click here.

• The FCC released a comprehensive white paper on June 15, 2010, discussing whether the existing network has the capacity to accomplish the National Broadband Plan recommendations for the deployment of a nationwide 4G wireless public safety network that will allow first responders to communicate across geographic regions. The white paper “shows that the 10 MHz of dedicated spectrum currently allocated to public safety will provide the capacity and performance necessary for day-to-day communications and serious emergency situations.” The white paper is available here.

• Commissioner Meredith Attwell Baker spoke at the TV White Spaces Summit on June 15, 2010, and urged quicker action on the White Spaces proceeding. She noted that work has been ongoing since 2004, and “that is simply too long to make you wait.” Because of the delay, she stated, the United States has been eclipsed by the EU and other countries including Singapore. Commissioner Baker emphasized the need to move forward on the treatment of wireless mics and creating a spectrum inventory.

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

Telecom Privacy News

• Google, Inc. testified before the House Energy and Commerce Committee recently about its collection of “payload data” from unsecured Wi-Fi networks. Pablo Chavez, Google’s director of public policy, told the Committee that the collection of this information was caused by code “mistakenly included” in the network software. The identifying information was to be used to help Google to determine the location of laptop computers, mobile phones, or other devices based on which Wi-Fi networks could be detected by the device. Mr. Chavez added that the payload data was stored in raw form, has never been used in any Google product or service, and that the company is “aware of only two instances when any Google engineer even viewed the payload data.” Mr. Chavez also stated that Google does not believe that current U.S. law prohibits the collection of this sort of data from unsecured Wi-Fi networks.

• In a further development of the Google privacy investigation, Illinois Attorney General Lisa Madigan (D) and Massachusetts Attorney General Martha Coakley (D) jointly announced last week that their offices have begun investigations into whether Google collected personal data of their states’ residents as part of the creation of its Street View service. Missouri Attorney General Chris Koster (D) and Connecticut Attorney General Richard Blumenthal (D) previously announced similar investigations.

• On June 17, 2010, by a 9-0 decision, the U.S. Supreme Court held that the Ontario, California Police Department did not violate the Fourth Amendment when it reviewed the text messages of an officer on his department-issued pager. City of Ontario, Calif. et al. v. Jeff Quon, et al. (Case 08-1332). In reviewing Sergeant Quon’s messages, the Department had found that the vast majority of his messages were of a personal nature and some were sexually explicit. Overturning a 2008 decision issued by the US Court of Appeals for the Ninth Circuit, the Supreme Court found that the audit ordered by the police department was reasonable given that Quon regularly exceeded his allotted pager usage, and that as a member of the SWAT team he should not have had an expectation of privacy in his pager. “Even if Quon had a reasonable expectation of privacy in his text messages, petitioners did not necessarily violate the Fourth Amendment by obtaining and reviewing the transcripts,” Justice Anthony M. Kennedy wrote for the court. “The City and OPD (Ontario Police Department) had a legitimate interest in ensuring that employees were not being forced to pay out of their pockets for work-related expenses, or on the other hand that the City was not paying for extensive personal communications.” In 2001, the department distributed pagers to SWAT team members after requiring them to sign acknowledgments that the Department reserved to right to monitor their messages and that they had no right to privacy in the messages. A copy of the decision is available here.

In the Courts

• On June 8, 2010, the Minnesota Court of Appeals rejected the appeal of the Minnesota Department of Commerce (DOC) challenging the Minnesota Public Utilities Commission’s (PUC’s) decision regarding the disposition of the balance remaining in the Tier 2 Special Fund under Qwest’s Performance Assurance Plan. The DOC argued that the PUC’s decision to distribute the money in the form of telecommunications grants to K-12 schools contravened Minn. Stat. § 16A.151, which, the DOC argued, requires the PUC to deposit the balance of money into the state’s general fund. The Court of Appeals disagreed, holding that Qwest’s contribution of those funds arose out of its obligations under a federal statute, 47 U.S.C. § 271, and not pursuant to Minn. Stat. § 16A.151, and thus the K-12 telecommunications grants were not unlawful. In re Qwest’s Performance Assurance Plan, No. A09-1493.

Legislative Outlook

• The Senate Judiciary Committee will hold a hearing entitled “Oversight of the Office of the Intellectual Property Enforcement Coordinator” on June 23, 2010, at 10:00 am Eastern in 226 Dirksen Senate Building. Scheduled witnesses include Victoria Espinel, Intellectual Property Enforcement Coordinator, Office of Management and Budget, and Barry M. Meyer, Chairman and CEO of Warner Bros. Entertainment Inc. For more information, click here.

• The full Senate Commerce Committee will hold a hearing entitled “Universal Service: Transforming the High-Cost Fund for the Broadband Era” on June 24, 2010, at 10:00 am Eastern in 253 Russell Senate Office Building. For more information, click here.

• Rep. Henry Waxman, D-Calif., Chair of the House Commerce Committee, has issued a statement on the FCC’s Notice of Inquiry regarding its legal authority to preserve open Internet access. Reiterating a previous statement on this issue, Chairman Waxman stated that “the Commission should consider all viable options. This includes a change in classification, provided that doing so entails a light regulatory touch, with appropriate use of forbearance authority.” To view the full statement, click here.

• Senator John (“Jay”) Rockefeller IV, D-W Va., Chair of the Senate Commerce Committee, also released a statement on the NOI, noting that “I support the agency seeking comment … In the long term, however, I believe we need to develop consensus to update the law, further safeguard consumers, and spur universal broadband deployment.” To view the full statement, click here.

Upcoming Events

• The Federal Communications Bar Association is hosting a luncheon with Commissioner Mignon Clyburn as part of its Annual Meeting on June 30, 2010, at 12:00 pm at the Mayflower Hotel. For more information, click here.

• 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, TX. For more information or to register, click here.

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