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, compliance, legislation, and litigation. Follow our Telecom Group on Twitter. Click here.

Federal Communications Commission (FCC) Announcements

• The FCC has launched the Technology Experience Center which it describes as “an on-site technology lab that will provide FCC employees and invited guests hands-on experience with the latest communications devices and solutions.” The Commission is accepting donations of devices for the Center. For more information, click here.
• The next Consumer Advisory Committee meeting is November 10, 2010, from 9:00 am to 4:00 pm Eastern. The agenda includes a discussion on how to improve federal/state coordination of consumer complaints. Further information is available here.
• Reply Comments on the Further Inquiry into Two Under-Developed Issues in the Open Internet Proceeding are due November 4, 2010. The Arent Fox Client Alert on the item is available here. The Further Inquiry is available here. Chairman Julius Genachowski’s written statement is available here.

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

Federal Trade Commission (FTC) Developments

• On October 27, 2010, the FTC announced that it is closing its investigation into whether Google violated the law by collecting consumer data transmitted over unsecured wireless networks as part of its Street View mapping service. The investigation was initiated earlier this year after Google acknowledged that it had inadvertently collected personal information while gathering data for its Street View service which provides ground-level views as part of Google’s geo-mapping services. In a letter to Google, the FTC stated that its privacy concerns regarding Street View were allayed when the company announced that it will beef up privacy training for employees and will not use any of the collected data to market Google products or services. In contrast to the FTC’s decision, the UK, Germany, and the Czech Republic all have taken steps to limit Google’s ability to expand the Street View service after the company admitted to illicit data gathering. A copy of the FTC’s letter can be found here. See related piece in Privacy below.

Please contact Ross Buntrock, Alan Fishel, or Stephanie Joyce (contact information below) for further information.

Developments in Intercarrier Compensation

• On October 28, 2010, Verizon filed an Ex Parte letter with the FCC stating that “there is widespread acknowledgement that the current intercarrier compensation (ICC) system is broken and requires comprehensive reform.” Verizon urged the Commission to address “arbitrage schemes flowing from flaws in the current ICC regime such as traffic pumping and phantom traffic.” Verizon alleged that access costs the industry $400 million annually. WC Docket No. 07-135.
• On October 27, 2010, Free Conferencing Corp. filed an Ex Parte with the FCC distinguishing between so-called “traffic pumping,” which Free Conferencing defined as “a non-consumer dialed voice service that generates artificial traffic for the sole purpose of collecting access revenues,” and “access stimulation,” which it described as “the act of routing a high volume of consumer dialed long distance traffic to a rural carrier.” Free Conferencing accused many in the industry of trying to blur the distinction between the two terms in order to ignore the “one major difference: ‘traffic pumping’ is artificial, non-consumer dialed traffic; whereas ‘access stimulation’ occurs when real consumers make personal decisions regarding their long distance billing plans and then place genuine calls to obtain beneficial services.” Defined as such, Free Conferencing urged the Commission to find the practice of billing for actual “traffic pumping” illegal, but advocated a narrowly tailored approach that balances the competing interests with respect to access stimulation. Free Conferencing further recommended that the Commission consider the High Volume Access (HVA) rate structures contained in three rural carriers’ tariffs that were recently approved by the Commission. Under these tariffs, the HVA rate “applies instead of the highest benchmark rate when telecommunications traffic to a rural area exceeds a pre-determined volume threshold … in order to provide a fair rate structure for the IXCs.” WC Docket No. 07-135.
• On October 25, 2010, rural local exchange carriers Deerfield Farmers’ Telephone Company, Lennon Telephone Company, Pigeon Telephone Company, and Waldron Telephone Company filed a motion to withdraw their joint petition for arbitration with MetroPCS Michigan, Inc. at the Michigan Public Service Commission (MI PSC). On September 16 of this year, the LECs filed a petition alleging that MetroPCS refused to engage in good-faith interconnection negotiations with them. They stated that because MetroPCS “did not negotiate in any manner and made no counter-proposal during the allowed negotiation period,” the MI PSC should adopt the ICAs that the LECs proposed. In their motion to withdraw, the LECs stated that the parties engaged in negotiations after the filing of the petition and they were able to settle the issues in dispute. Case No. U-16455.

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

Compliance Notes

• FCC Form 499-Q is due November 1, 2010 for all filers that are not considered to be de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the third quarter of 2010 and projected revenues for the first quarter of 2011. A copy of the current FCC Form 499-Q can be found here.
• All providers of interconnected fixed or non-nomadic Voice over Internet Protocol (VoIP) services as of December 1, 2010 will be required to register with the Illinois Commerce Commission (ICC) by January 1, 2011, in accordance with 220 ILCS 5/13‑401.1. Thereafter, new providers will be required to register with the ICC at least 30 days prior to their provision of service within Illinois. The ICC has posted a copy of the registration form here.

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

Stimulus This Week

• During a press conference in West Virginia on October 27, 2010, Sen. John “Jay” Rockefeller IV, D-W.Va., praised Governor Joe Manchin for his efforts to obtain $126 million in broadband stimulus money from the Broadband Technology Opportunities Program (BTOP), administered by the National Telecommunications and Information Administration (NTIA). At the same time, Sen. Rockefeller dismissed objections to the grant that were lodged by Citynet, LLC, a West Virginia-based Internet service provider. In an interview after the press conference, Sen. Rockefeller stated, “The game is over. The NTIA has already looked at this and approved it. It’s gone through Commerce in a broader sense. The FCC, they’ve signed off. It’s a done deal.”
• On October 28, 2010, NTIA disputed a report in Communications Daily earlier in the week implying that broadband stimulus funding was awarded unevenly between districts that had representation on the US House of Representatives Commerce Committee and those districts that did not. Tom Power, NTIA Chief of Staff, stated that this conclusion was “just plain wrong.” Mr. Power went on to say, “As described in the grant rules, we considered factors such as the sustainability of projects and how they would meet the needs of the community. This resulted in a proportional distribution of grant funds, without regard to congressional districts or political affiliations.” NTIA officials also added that the report did not take into account that fact that the grants will have broad impact and will reach surrounding congressional districts, not just the ones that received funds.

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

Broadband News

• On October 28, 2010, Verizon Wireless (VZW) agreed to a $25 million payment to the US Treasury along with at least $52.8 million in refunds to approximately 15 million customers who had “mystery” fees on their wireless bills for unrequested wireless broadband charges. Millions of VZW customers had $1.99 data fees on their bills despite not having used data-based services. The $25 million payment is the largest in FCC history, and the agreement ends the FCC’s ten-month investigation into this VZW practice. VZW also agreed to adopt various consumer protection mechanisms, including an appeals process for data charges and a “Data Charge Task Force” to monitor and resolve data-charge complaints. In a statement, Chairman Genachowski highlighted to consumers that the FCC has “got their back.” Commissioner Michael J. Copps and Mignon Clyburn both praised the agreement as well, with Copps stating that the agreement demonstrates that the FCC is taking its “charge as a consumer protection agency seriously.”
  
  The Order is available here. The consent decree is available here. The Chairman’s statement is available here.

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

Telecom Privacy News

• According to the Privacy Commissioner of Canada, Google violated Canada’s Personal Information Protection and Electronic Documents Act by collecting personal information from publicly accessible, unsecured wireless networks with its camera cars. Privacy Commissioner Jennifer Stoddart recently released a “preliminary letter of findings,” the latest development involving Canada’s investigation of Google's Street View mapping service. “Our investigation shows that Google did capture personal information and, in some cases, highly sensitive personal information such as complete e-mails,” Stoddart said in a press release. “This incident was a serious violation of Canadians’ privacy rights.” In a post on its official blog earlier this year, Google stated that it made an honest make and was “acutely aware that we failed badly here.” The post went on, “We are profoundly sorry for this error and are determined to learn all the lessons we can from our mistake.”

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

In the Courts

• On October 28, 2010, the US Court of Appeals for the Ninth Circuit affirmed a California federal district court’s affirmation of the California Public Utility Commission’s grant of summary judgment to Cox California in its intercarrier-compensation dispute with Global NAPs California (Global). In April 2008, Cox brought an action against Global at the California PUC alleging that Global had failed to pay Cox for its termination of Global’s VoIP-originated intraLATA toll traffic. Cox claimed that such payments were due under the terms of the parties’ 2003 interconnection agreement (ICA). Global resisted payment on the ground that the traffic at issue “arises from an enhanced services provider” and is therefore “subject to an exemption” from access charges under federal law. The California PUC rejected that argument, finding instead that the parties’ ICA required payment for all intraLATA toll traffic. Based on Global’s concession that the VoIP traffic was intraLATA toll traffic, the Ninth Circuit affirmed the PUC’s interpretation of the parties’ ICA. The Ninth Circuit also rejected the argument that the payment clause violates federal law insofar as it abridged the access-charge exemption for VoIP traffic, reasoning that an ICA is a creature of section 251(b)(5) of the Communications Act, and thus is an appropriate basis for establishing payment obligations for termination of VoIP traffic. Global NAPs California, Inc. v. California Pub. Utils. Comm’n, No. 09-55600 (9th Cir.).
• On October 22, 2010, the US Court of Appeals for the Third Circuit Court agreed with the federal district court for the Eastern District of Pennsylvania that federal law preempts, and thus required the dismissal of, a putative class action against wireless carriers and wireless handset manufacturers alleging, among other things, that the defendants should have provided and must provide headsets with all mobile phones and that the defendants conspired to suppress knowledge of the adverse health effects from their phones’ radio frequency (RF) emissions. The plaintiff’s claims were based in state law – such as breach of warranty and conspiracy – but the Third Circuit concluded that the “FCC is in a better position to monitor and assess the science behind RF radiation than juries in individual cases,” and therefore dismissed the suit. The plaintiff argued that he is not seeking to regulate the frequency itself, but rather only to require the manufacturers and carriers to provide the headsets. But the appeals court credited the defendants’ arguments that state juries are limited to awarding only that remedy, and that potentially conflicting state judgments could yield a patchwork system of laws that would collide with the Communications Act’s grant of authority over these issues to the FCC. Farina v. Nokia Inc., No. 08-4034 (3rd Cir.).

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

Legislative Outlook

• Both the US House of Representatives and the US Senate are on recess for the elections. They are presently expected to return November 15, 2010.
• Sen. John “Jay” Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, has sent letters to Facebook and MySpace inquiring about whether reports are correct that the sites share sensitive user information with undisclosed third parties. Each letter contains a detailed analysis of the companies’ respective privacy policies and asks several questions related to how each policy is enforced. To read the text of the letters, click here.

Upcoming Events

• The Federal Communications Bar Association will hold the 24th Annual Chairman’s Dinner on Thursday, December 9, 2010, at the Washington Hilton. 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

Michael B. Hazzard
hazzard.michael@arentfox.com
202.857.6029

Jonathan E. Canis
canis.jonathan@arentfox.com
202.775.5738

Stephanie A. Joyce
joyce.stephanie@arentfox.com
202.857.6081

Alan G. Fishel
fishel.alan@arentfox.com
202.857.6450

Jeffrey E. Rummel
rummel.jeffrey@arentfox.com
202.715.8479