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 next FCC Open Meeting will be July 15, 2010. The tentative agenda, available here, 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.

• On June 22, 2010, Chairman Julius Genachowski announced that Geoffrey Blackwell will return to the FCC to head its new initiatives for tribal lands, including bringing broadband to all Native American communities. Mr. Blackwell is a recognized expert in the field of Tribal economic infrastructure development, and had previously worked on Tribal issues at the FCC. To read the News Release regarding this new appointment, click here. To read Commissioner Copps’ statement praising the choice, click here.

• 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

• The FTC and Twitter have reached an agreement to settle the agency’s investigation into security breaches that put Twitter users’ privacy at risk. The FTC’s complaint against Twitter alleged that serious lapses in the company’s data security allowed hackers to obtain unauthorized administrative control of Twitter, including access to non-public user information and tweets that consumers had designated private, and that the hackers obtained the ability to send out phony tweets from any user account. At one point, then-President-Elect Obama’s account was affected by the security breach. The settlement does not include a fine, but the company is prohibited from “misleading consumers about the extent to which it maintains and protects the security, privacy and confidentiality of nonpublic consumer information, including the measures it takes to prevent authorized access to information and honor the privacy choices made by consumers.” In the Matter of Twitter, Inc., FTC File No. 092 3093. The FTC’s press release on the settlement can be found here.

• The FTC Red Flag Rules become effective on January 1, 2011. The Rules 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 22, 2010, the Kentucky Public Service Commission (KY PSC) issued an order addressing a long-standing billing dispute between South Central Telecom LLC and AT&T Kentucky. In 2006, South Central filed a complaint action against AT&T for payment of access charges, at South Central’s tariffed rate, on all traffic AT&T delivers to South Central. AT&T sought to dismiss the complaint, arguing that only 2 percent of the traffic it delivers to South Central is AT&T-originated interLATA traffic that is subject to access charges, with the remainder consisting of either CMRS or transit traffic originated by other carriers. The two carriers are not directly interconnected. The KY PSC stated that “[b]ecause of this unique relationship, no tariff or other existing agreement appears to account for the treatment of all the traffic being delivered to South Central by AT&T.” The KY PSC ultimately ruled that if “the traffic terminated by South Central is non-local toll traffic, then AT&T Kentucky must pay access charges,” but if “the traffic is local in nature, then AT&T Kentucky is not responsible for paying access charges; but the traffic would be subject to reciprocal compensation if such arrangements are in place between the originating and terminating carriers.” The KY PSC further directed the parties to submit a negotiated agreement within 60 days addressing the various types of traffic and the terms and conditions upon which such traffic will be exchanged. Docket No. 2006-00448.

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 percent. 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 17, 2010, National Telecommunications and Information Administration (NTIA) approved the State of Alaska’s request to change its Designee for funding under the State Broadband Data and Development Program, administered by the NTIA. The new Designee is Connected Nation Inc. The scope of work and funding for the mapping project in Alaska remain the same. NTIA will use the mapping data gathered from Alaska and the other states for the National Broadband Map. Summaries of projects in other states that have been approved for funding can be found here.

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

Broadband News

• EXTENSION OF TIME GRANTED: The deadline for comments regarding measurement of mobile broadband network performance and coverage, Docket Nos. CG 09-158, CC 98-170, WC 04-36, has been extended to July 8, 2010. DA 10-998.

• On June 18, 2010, the FCC’s Spectrum Task Force announced “a proceeding to unleash up to 90 MHz of additional spectrum for mobile broadband, consistent with the National Broadband Plan recommendation to accelerate terrestrial deployment in the mobile satellite service band.” This is part of a “plan to increase value, utilization, and investment in mobile satellite service bands.” The proceeding will commence in July. The announcement is available here.

• The FCC has launched Wireless World Travel Week which focuses on providing travelers abroad with “tips to help travelers save money on international wireless use.” Each day will features tips on a different topics, such as making VoIP calls to save on international calls. The tips will be collected here.

• Edward Lazarus, the FCC’s Chief of Staff, defends the recent Open Internet meetings with Verizon, AT&T, the National Cable & Telecommunications Association, Google, and Skype in a blog post available here. Lazarus states that because these meetings are “regarding other approaches outside of the open proceedings at the Commission, the agency’s ex parte disclosure requirements are not applicable.” He also notes that the FCC is posting notices of the meetings at the Broadband Blog.

• Chairman Genachowski spoke at Atlantic magazine’s “Future of the City” conference on June 22, 2010, comparing ongoing efforts to improve broadband infrastructure to the electricity infrastructure upgrades of the past. Chairman Genachowski highlighted many of the goals of the National Broadband Plan, and pointed out that the US is falling behind internationally because of broadband adoption issues. He concluded that the issue of spectrum availability requires aggressive action by the United States.

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

Telecom Privacy News

• On June 24, 2010, the American Civil Liberties Union (ACLU) lended its support to Amazon.com in its lawsuit against the North Carolina Department of Revenue, which seeks to avoid providing its customers’ personally identifiable information (PII) relating to North Carolina residents’ purchases. The ACLU, on behalf of seven Amazon customers, intervened in the lawsuit and argued that North Carolina’s request for the PII as part of a tax audit was unconstitutional because it violates Internet users’ rights to privacy and free speech. The suit began when Amazon refused to produce personally identifiable user information that could be linked back to the individual purchases, prompting threats of suit from the North Carolina agency. Amazon.com, LLC v. Kenneth R. Lay, Case No. 2:10-cv-00664-MJP (WD Wash.). The ACLU Motion to Intervene is available here.

• Also on June 24, 2010, the House Constitution, Civil Rights, and Civil Liberties Subcommittee heard from a panel of experts about whether Congress should update the Electronic Communications Privacy Act of 1986 (ECPA) in order to specify what standard law enforcement agents must meet before getting mobile phone location information of suspected criminals. A coalition of privacy advocates and Internet companies wants to make clear that the government must obtain a probable cause warrant before tracking the location of a mobile phone or other wireless communications device. Several witnesses noted that ECPA was adopted long before the proliferation of mobile phone and other handheld devices, and that the case law and interpretations of ECPA with regard to these newer technologies is in disarray. To read the written statements of testifying witnesses, click here.

In the Courts

• On June 23, 2010, the US District Court for the Southern District of New York granted summary judgment in favor of YouTube and Google and against Viacom and various other copyright holders who claimed that YouTube and Google are liable for their users’ acts of copyright infringement. The trial court agreed with YouTube and Google that the Digital Millennium Copyright Act’s “safe harbor” clause shielded them from liability, and did not require them to review users’ content for potential copyright-infringement concerns before allowing the material to be posted to the site. “The provider must know of the particular case before he can control it,” the court ruled, and further held that the “provider need not monitor or seek out facts indicating such [infringing] activity.” Viacom Int’l, Inc. v. YouTube, Inc., Case Nos. 07 Civ. 2103 (LLS), et al. (SDNY). Viacom already has stated publicly that it will appeal the decision.

• A day earlier, the US Court of Appeals for the DC Circuit dismissed an appeal by the Recording Industry Association of America (RIAA) that challenged the Copyright Royalty Board’s order instituting a penny-rate royalty structure for cell phone ringtones under which copyright owners receive 24 cents for every ringtone sold using their copyrighted work and a 1.5 percent per month late fee for late royalty payments. The DC Circuit held that the Board’s decision was reasonable and reasonably explained, and not arbitrary and capricious, as the RIAA claimed. For the ringtone fee, the RIAA had sought 15 percent of the wholesale ringtone revenue, but the court found that the Board had considered the full, extensive scope of evidence submitted at the hearing and therefore was entitled to substantial deference in its chosen penny-rate royalty structure. As the court concluded, the “Board examined the relevant data and determined that there was no meaningful link between the selection of a penny-rate royalty structure for ringtones and future ringtone revenues. RIAA has failed to present any basis for us to overturn that conclusion.” Recording Industry Assoc. v. Librarian of Congress, DC Cir. No. 09-107.

Legislative Outlook

• The House Science and Technology Committee will hold a hearing on July 1, 2010, at 10:00 am Eastern in 2318 Rayburn House Office Building titled “Smart Grid Architecture and Standards: Assessing Coordination and Progress”. Scheduled witnesses include Dr. George Arnold, National Coordinator for Smart Grid at the National Institute of Standards and Technology, and Mason Emnett, Associate Director of the Office of Energy Policy and Innovation at the Federal Energy Regulatory Commission.

• 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 am Central in the Everett Dirksen Federal Building in Chicago, Illinois. For more information, 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. 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