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.

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 first meeting of the Open Internet Advisory Committee (OIAC) will be held July 20, 2012, from 10:00 a.m. to 2:00 p.m. Eastern at FCC headquarters. The OIAC will “consider administrative and procedural matters relating to its functions and may also consider open Internet-related issues.” The OIAC will also review oral and written comments. More information is available here.
• The next FCC Open Meeting is scheduled for July 19, 2012, at 10:30 am Eastern. We will provide the Tentative Agenda when it is released.

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

The Mobile Market

• The FCC has set the comment cycle in the proceeding concerning the privacy and security of information stored on mobile devices. It seeks comment on the privacy and security practices of mobile wireless service providers and the application of existing privacy and security requirements to customer information stored on mobile communications devices. Comments are due July 13, 2012; Reply Comments are due July 30, 2012. CC Docket No. 96-115. The text of the Public Notice is available here.
• On June 19, 2012, the House Subcommittee on Intellectual Property, Competition, and the Internet held a hearing titled “New Technologies and Innovations in the Mobile and Online space, and the Implications for Public Policy.” At issue was how to strike the right balance between the protection of personal information and the ability of online and mobile companies to generate revenue from a customer’s personal data. The Subcommittee is chaired by Rep. Bob Goodlatte, R-Va., who asked what the costs to businesses would be if companies were restricted from collecting information from and about users. According to Morgan Reed, Executive Director of the Association for Competitive Technology, targeted advertising constitutes about 20% of the revenue mobile application developers. Rep. Jason Chaffetz, R-Utah, stated that “the tech sector is something in the country that’s working” and Congress needs “to be ultra careful that we don’t convolute the process to the point that young entrepreneurs are unable to start up.” Written remarks and testimony from the hearing are 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 June 12, 2012, the FTC announced that Spokeo, Inc., an online data broker that compiles and sells detailed information profiles on millions of individuals, will pay $800,000 in order to settle charges that it sold consumer profiles to other companies without taking the steps required by the U.S. Fair Credit Reporting Act (FCRA) to protect consumers. This was the first FTC case to address the sale of Internet and social media data for the purpose of employment screening. The FTC alleged that Spokeo operated as a consumer reporting agency but failed to ensure that the information it sold would be used only for legal purposes. Spokeo claims that it has since “made changes to our site and our internal business practices in order to ensure we don’t infringe upon the FCRA’s important consumer protections.” More information regarding the FTC’s settlement with Spokeo 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

• The U.S. Department of Energy recently announced the winners of its “Apps for Energy” competition. While there were a number of winners across several categories, the overall winner was an application called “Leafully”. This app seeks to help utility customers visualize their Green Button data as a variety of units, such as the amount of trees needed to offset an individual’s energy usage. Leafully also encourages users to set energy savings goals and to share their progress on Facebook. Launched in April 2012, Apps for Energy challenged software developers to build web and mobile apps that help utility customers understand and visualize their energy usage data in meaningful ways by leveraging the Green Button data initiative. More information regarding the Apps for Energy competition results 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 19, 2012, staff with the North Carolina Utilities Commission (NCUC) submitted a status report in its general tariff docket that identified local exchange carriers that are not fully compliant with the NCUC’s May 29, 2012 order directing carriers to file proof of compliance with the November 18, 2011 FCC Intercarrier Compensation/Universal Service Reform Order (FCC 11-161). Pursuant to the NCUC’s order, which specified an effective date of July 3, 2012 for revised intrastate switched access tariffs, non-average schedule incumbent local exchange carriers were required to file workpapers supporting tariff revisions by June 1, 2012. Average schedule incumbents and competitive carriers with intrastate switched access rates equal to their interstate rates were required to file an affidavit by June 1, 2012 indicating that their rates were the same. Average schedule incumbents and competitive carriers with interstate and intrastate rates that varied were required to provide proof of compliance with the FCC’s required rate reductions by June 1, 2012. In its status report, however, NCUC staff indicated that while a number of competitive carriers have fully complied with the Order, “an even larger number have either provided insufficient information or failed to respond at all.” A copy of the status report can be found here.

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

• The required effective date for new federal interstate access tariffs is July 3, 2012. On June 5, 2012, the FCC Wireline Competition Bureau released DA 12-870 in the Connect America docket to clarify a number of issues relating to the step-down of intrastate rates. It grants a waiver of the previous deadline of July 1, 2012 for interstate access rates. The FCC is encouraging state commissions to issue a similar extension for intrastate switched access tariff filings. A copy of DA 12-870 may be found here. (WC Docket No. 10-90)
• Local exchange carriers (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 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 June 14, 2012, the FCC released its report on Internet access services summarizing information about the number of working Internet access connections over 200 Kilobits per second (Kbps) in at least one direction in the United States as of June 30, 2011. The report begins with three notable findings:
  • Internet connections overall are growing. The number of connections over 200 Kbps in at least one direction increased by 31% year-over-year to 206 million.
  • Growth is particularly high in mobile Internet subscriptions, but fixed-location connections also continue to increase. The number of mobile subscriptions grew to nearly 120 million – up 59% from June 2010. The number of fixed-location connections increased by 6% year-over-year, to nearly 87 million.
  • Both fixed and mobile services are shifting to higher speeds. The share of fixed connections with speeds at or above the availability benchmark adopted in the Sixth Broadband Deployment Report increased from 51% to 56% of total fixed connections. Among mobile wireless subscriptions, the share increased from 6% to 14%.
  The report is available 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 21, 2012, the Supreme Court vacated the fines levied by the FCC against Fox and ABC for “fleeting expletives” that occurred during live broadcasts. The Court found that the FCC’s indecency policy was unclear at the time of the broadcasts, and thus Fox and ABC were deprived adequate notice prior to the sanctions. This case did not include the Janet Jackson incident. To read the full opinion, click here. FCC v. Fox Tel. Stations, Inc., No. 10-1293.
• Sprint knows that “unlimited” means “unlimited,” but it may have been a bit hazy on “everything.” On June 18, 2012, plaintiffs in a putative class action sought court approval of their $19 million settlement with Sprint to end their lawsuit regarding Sprint’s practice of charging separately for sending text messages with pictures after the customers had already paid for unlimited messaging plans. One putative class representative subscribed to Sprint’s “Everything Messaging” plan but was then billed so much for picture messaging that it doubled her monthly bill. Of the settlement, her counsel told the court that this was the best deal they could broker given the uncertainty of the factual and legal issues attending the case: “Plaintiffs and class counsel believe this proposed settlement to be an excellent result and submit that it is in the best interests of the settlement class, providing a meaningful recovery for the settlement class now.” Plaintiffs’ counsel would receive up to $3.5 million in fees. Affected consumers would receive either a $20 cash payout or noncash benefits from Sprint. Eoff v. Sprint Nextel Corp., No. 2:10-cv-01190 (D.N.J.).

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

Legislative Outlook

• The House Communications Subcommittee will hold a hearing titled “The Future of Video” on June 27, 2012, at 10:00 a.m. Eastern in 2123 Rayburn House Office Building. Scheduled witnesses include David Hyman, General Counsel of Netflix, and Charlie Ergen, Chairman of DISH Network.
• The House Subcommittee on Intellectual Property, Competition, and the Internet will hold a hearing titled “International IP Enforcement: Protecting Patents, Trade Secrets and Market Access” on June 27, 2012, at 10:00 am in 2141 Rayburn House Office Building.

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

Upcoming Events

• The FCBA is hosting an evening at a Washington Nationals game on July 17, 2012. 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.