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.

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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.
• On June 21, 2011, the FCC and the US Department of Agriculture (USDA) jointly issued a rural broadband report to Congress. The report, entitled “Bringing Broadband to Rural America: Update to Report on a Rural Broadband Strategy”, emphasizes “the need to support the delivery of broadband to rural communities” and states that “more needs to be done to fulfill the Administration’s objective for widespread deployment of affordable, quality broadband services to every community.” FCC Chairman Julius Genachowski stated that the report’s finding that “28 percent of rural residents still lack access to the kind of broadband that most Americans take for granted” was “not acceptable.” He highlighted the FCC’s initiatives to increase spectrum and to reform the Universal Service Fund as ways to achieve greater rural broadband access. More information about the report can be found here.

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

The Mobile Market

• On June 22, 2011, Rep. Anna Eshoo, D-Cal., introduced HR 2281, the “Next Generation Wireless Disclosure Act”. The bill would require wireless carriers to disclose, at point of sale and in billing materials, information about service they market as “4G”, such as the guaranteed minimum speed, coverage maps, and pricing. Rep. Eshoo stated in support of the bill that “Consumers deserve to know exactly what they’re getting for their money when they sign-up for a 4G data plan.” For more information about the bill, click here.

Federal Trade Commission (FTC) and Privacy Regulation

• The FTC is seeking public comment on a proposed safe harbor program that Aristotle International, Inc. has submitted for approval under the agency’s Children’s Online Privacy Protection Act (COPPA) Rule. COPPA allows industry groups and others to request FTC approval of self-regulatory guidelines that implement the protections of COPPA. Aristotle’s proposed guidelines are available here. More information is available here.
• On June 17, 2011, the FTC granted early termination of its review into Microsoft’s purchase of Skype. This action means the deal may go forward and neither the Justice Department nor the FTC will review the transaction further. Microsoft and Skype may need to seek review from European and other international regulators. More information is available here.
• The FTC recently found that Social Intelligence Corp. is in compliance with the Fair Credit Reporting Act and can use social networks and blogs to compile background checks on job applicants. Social Intelligence Corp. stores the information for up to 7 years, but states that the information would not be accessible via Internet search if the reporting entity has removed it. More information is available here.
• 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 US 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 22, 2011, a group of 34 Missouri local exchange carriers (LECs) filed a complaint against Halo Wireless, Inc. with the Missouri Public Service Commission (MPSC), alleging that Halo is illegally sending traffic to the LECs for termination. Five other Missouri LECs, Alma Communications Company, Chariton Valley Telephone Corporation, Choctaw Telephone Company, Mid-Missouri Telephone Company, and MoKAN DIAL, Inc., filed a similar complaint against Halo with the MPSC earlier this month. According to the LECs, beginning in December 2010, they began receiving traffic records indicating that Halo was sending them traffic through AT&T, but after performing a traffic study, they determined that approximately 70% of the traffic was intrastate, interexchange wireline-originated traffic. The LECs then billed Halo access charges for this traffic, but Halo claimed that it did not owe access charges because a “de facto bill and keep” arrangement existed between the carriers. The LECs further assert that Halo is in violation of its Interconnection Agreement (ICA) with AT&T, which requires Halo to negotiate agreements with other LECs prior to sending traffic for termination. Docket No. TC-2011-0404.

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 14, 2011, the FCC announced that 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

• On June 20, 2011, the Board of Directors of the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to launch a new system that will substantially increase the number of generic Top-Level Domains (gTLDs). The new system will allow brand owners to register their own gTLDs – such as “.brand” – and may allow hundreds of new domain names based upon generic terms like “.travel”, “.bank”, and “.nyc.” ICANN will accept the first round of applications from January 12, 2012, to April 12, 2012, and many of the new gTLDs are expected to go live later in 2012. Rod Beckstrom, ICANN’s President and Chief Executive Officer, is touting the new gTLD system as an opportunity “to better serve all of mankind.” Some companies worry, however, that the new system will create new and additional opportunities for cybersquatters and will force companies to register many more domain names solely for defensive purposes. ICANN’s Applicant Guidebook includes several mechanisms – including sunrise periods and a Trademark Clearinghouse – that will help companies identify potential infringement and enforce their rights. The policies outlining the new program are available in ICANN’s gTLD Applicant Guidebook, 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, 2011, the US Court of Appeals for the Ninth Circuit reversed a 2008 California federal district court order affirming a 2006 California Public Utilities Commission (CPUC) decision that AT&T Communications of California, a LEC, must pay tariffed access charges to Pac-West Telecomm for termination of traffic to Internet Service Providers. The court of appeals found instead that the FCC’s $0.0007 rate for interstate ISP traffic preempts the CPUC decision and applies to ISP-bound traffic. It stated that “[a]lthough the [FCC’s] ISP Remand Order could be clearer, we are convinced that the CPUC and the district court erred in holding that it does not apply to ISP-bound traffic exchanged between two CLECs.” It further reasoned that “[t]he defining feature of the problem the FCC sought to remedy is thus the type of traffic being exchanged—ISP-bound traffic.” Finally, the court found support in the FCC’s amicus brief which argued that “the regulatory language, the FCC’s description of the scope of its compensation regime, and the regulatory purpose demonstrate that the new markets rule (until forborne from on October 18, 2004) and the rate caps ... apply to CLEC-to-CLEC ISP-bound traffic.” AT&T Commc’ns of Cal., Inc. v. Pac-West Telecomm, Inc., No. 08-17030 (9th Cir.).
• Also on June 21, the Bankruptcy Court of the US District Court for the Southern District of New York provisionally accepted DISH Network’s $1.4 billion bid for bankrupt TerreStar Network Inc. ahead of a June 30, 2011 auction. The bankruptcy court noted the lack of objections to the bid, as well as the support DISH’s bid received from the committee of unsecured creditors. DISH’s bid reportedly exceeds TerreStar’s secured debt by $90 million, and will be an all-cash transaction. This would mark DISH’s third significant bankruptcy-related acquisition, having completed acquired a bankrupt Blockbuster and satellite provider DBSD North America earlier this year for $320 million and $1.4 billion, respectively. In re TerreStar Networks Inc., Br. No. 1:10-bk-15446 (S.D.N.Y.).

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 is considering legislation to reform FCC procedure, HR __, the “Federal Communications Commission Process Reform Act of 2011”. At a session regarding this draft bill held June 22, 2010, Subcommittee Chair Fred Upton, R-Mich., remarked that “Eliminating outmoded rules, removing regulatory barriers, and refraining from imposing new ones on this segment of our economy could do a lot to help spur jobs and help pull us out of our fiscal doldrums.” The draft contains provisions for a “shot clock” to govern FCC deadlines and to increase transparency in FCC operations. To read a press release and summary about the bill, click here. The draft bill, which has not yet been introduced, is available from that webpage.
• At this time, the House is scheduled to be out July 4-6 for the July 4th holiday, with July 1 listed as a Constituent Work Day. The Senate will be out July 4-8.

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

Upcoming Events

• Telecom Group Partner Jeffrey Rummel will be speaking on the topic of “FCC Licensing/Regulation of the Manufacture, Development and Testing of Military Communications Systems” during the Military Wireless Conference to be held June 27-29, 2011, at the Sheraton National Hotel in Arlington, VA. For information about this conference, 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, including: