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 released the Tentative Agenda for its next Open Meeting to be held November 30, 2010. It contains three items: a Notice of Proposed Rulemaking on using UHF and VHF spectrum for mobile broadband; a Notice of Proposed Rulemaking on experimental wireless licenses; and a Notice of Inquiry on the “opportunistic use” of underdeveloped spectrum. To view the Tentative Agenda, click here.

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

Federal Trade Commission (FTC) Developments

• The White House is reviewing a 54-page draft report on online privacy titled “Privacy and Information Innovation: A Dynamic Privacy Framework for the Internet Age.” It is the work of the US Commerce Department’s Internet Policy Task Force which held more than six months of meetings and issued a Notice of Inquiry in order to gather data for the report. The report calls for legislation providing an expanded set of Fair Information Practice Principles in five core areas: (1) Consumer Notice/Awareness; (2) Consumer Choice/Consent; (3) Consumer Access/Participation; (4) Information Integrity/Security; and (5) Enforcement/Redress. In addition, the draft report calls for a data breach law that would require companies to notify consumers when their information may have been compromised. The report also calls on the Obama administration to “review the Electronic Communications Privacy Act (ECPA), paying particular attention to assuring strong privacy protection in cloud computing and location-based services.” The report is expected to be closely followed by an FTC report on similar issues in which the FTC is expected to call for a more active regulatory environment with greater government intervention to protect consumers.
  
  A copy of the current Fair Information Practice Principles can be found here.

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

Developments in Intercarrier Compensation

• On November 17, 2010, North County Communications Corp. filed an Ex Parte presentation with the FCC responding to Verizon’s November 2, 2010 Ex Parte. North County urged the FCC to abandon its piecemeal approach to access charge disputes “and to stop the lawless actions of the Bell System and other large IXCs, who have adopted a nationwide campaign of self-help refusals to pay any access charges with which they disagree.” North County criticized Verizon’s arguments concerning LEC revenue-sharing arrangements, noting that Verizon “pays commissions of up to 90 percent to chat providers” and the large IXCs have other significant SMS-based revenue sharing arrangements with programs such as Dancing with the Stars. North County also took exception with Verizon’s claim that so-called “traffic pumping” costs the industry $400 million annually, pointing out that of the approximately 40 collection actions against IXCs pending, the amount claimed in unpaid charges typically runs from under $1 million to $3 million, and these sums represent amounts that the IXCs have refused to pay for many years. North County further asserted that the FCC’s inaction has emboldened IXCs to engage in self-help tactics rather than settle with LECs under reasonable terms, because they face no consequences for refusing to pay. To remedy this problem, North County urged the FCC to require IXCs to pay a minimum rate for terminating access at the lowest-band NECA rate pending final resolution of rule requiring IXCs to file rate complaints rather than cease paying. WC Docket 07-135.
• On November 16, 2010, at its 122nd Annual Meeting in Atlanta, the National Association of Regulatory Utility Commissioners (NARUC) Board of Directors adopted a resolution urging the FCC to address so-called “traffic pumping,” noting that the FCC “is well positioned to resolve the increasing number of interstate traffic pumping complaints uniformly.” Previously, the NARUC Committee on Telecommunications inserted language into the resolution asserting that “[t]raffic pumping does not include traffic imbalances arising from legitimate transport and termination service for discrete, wholesale, or retail service arising from State or federal law.” The NARUC resolution recommends that the FCC act within the existing WC Docket 07-135 and “consider further efforts to adopt interim rules to limit or prohibit similar schemes of inter-carrier compensation arbitrage as recommended in the National Broadband Plan.”

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

Compliance Notes

• 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

• On November 17, 2010, at its Annual Meeting, NARUC passed a resolution urging Congress to ensure that both the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) have adequate funding to oversee the Broadband Technology Opportunities Program (BTOP) and the Broadband Initiatives Program (BIP). A copy of the resolution may 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

• On November 15, 2010, NTIA released a long-awaited study on freeing up 500 MHz of spectrum for fixed and mobile wireless broadband in the next ten years, a benchmark set by President Obama in a June 2010 Memorandum. The report identifies numerous areas where spectrum might be available, sets an “aggressive” timetable to free up 500 MHz of spectrum, and calls for various incentives to encourage that identified spectrum to be released. The report is available here. FCC Chairman Julius Genachowski praised the report, stating that it outlined important short-term and long-term approaches to reach the 500 MHz goal.
• Also on the topic of spectrum, on November 15, 2010, Chairman Genachowski spoke at the NARUC Annual Meeting in Atlanta. He identified the upcoming items at the FCC’s November 30 meeting that are designed to help ease the upcoming “spectrum crunch.” Chairman Genachowski said that incentive auctions and Universal Service reform are key steps to bringing broadband to more people and businesses. The Chairman’s speech is available here.
• On November 17, 2010, Chairman Genachowski spoke at the Web 2.0 Summit in San Francisco on open Internet issues, including the Google-Verizon proposal. Although, he noted, it is a “good thing” when open Internet adversaries come to agreement on some principles, the Google-Verizon proposal slowed down the process at the FCC. The Chairman stated that the FCC is moving forward on open Internet rules in some form, without getting into specifics, but noted that all options remain on the table, including Title I authority. He also highlighted a number of “boring and geeky” efforts undertaken by the FCC to support broadband growth such as releasing spectrum and pole attachment rules.
• The FCC announced several upgrades to the spectrum dashboard available at www.broadband.gov, including advanced search and the ability to download results. More information is available here.
• On November 16, 2010, FCC Commissioner Michael J. Copps spoke at the Future of the Internet public hearing in Albuquerque, NM. He stated that broadband will be vital to any economic recovery, and that an open Internet is critical to a free press and responsible media. He also warned that the FCC and public should not accept a “trust us” from the gatekeepers of the Internet when it comes to preserving an open Internet. His speech is available here.
• Comment dates have been set for the Mobility Fund Notice of Proposed Rulemaking (see October 18 edition of This Week in Telecom). The NPRM “proposes the creation of a new Mobility Fund to make available one-time support to significantly improve coverage of current-generation or better mobile voice and Internet service for consumers in areas where such coverage is currently missing. The [FCC] seeks comment on creating the Mobility Fund using reserves accumulated in the Universal Service Fund and on the use of a reverse auction to make one-time support available to service providers to cost-effectively extend mobile coverage in specified unserved areas.” Comments are due December 16, 2010, and Reply Comments are due January 18, 2011. More details are available here.

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

Telecom Privacy News

• An assistant professor at New York University wants to implant a camera in the back of his head for an art project, The Wall Street Journal reports. Wafaa Bilal plans to have the surgically placed camera take pictures every minute and transmit them to a museum in Qatar, a proposal that has raised privacy concerns among NYU faculty, staff, and students who do not wish all of their campus activities to be publicized. After much discussion among faculty and deans, the Journal says that Mr. Bilal has agreed to cover the camera with a black lens cap while on NYU property.
• The nonprofit Free Press Free, in an amicus brief, has urged the US Supreme Court to reject an argument by AT&T that the company is entitled to a “personal privacy” exemption under the Freedom of Information Act. AT&T seeks to block the release of records that it provided to the FCC, claiming that disclosure of the records would violate the company’s personal privacy. AT&T won at the district court. Oral argument is scheduled for January 19, 2011. Free Press argues that a victory for AT&T would gut open records laws. FCC v. AT&T Inc., No 09-1279.

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

In the Courts

• On November 16, 2010, the US District Court for the Northern District of California granted a motion to dismiss filed by Google and HTC and a motion to compel arbitration filed by T-Mobile in a putative class action claiming that the Nexus One mobile phone (or Google Phone) is defective by not maintaining connectivity to T-Mobile’s 3G mobile network. Before turning to the merits, the court first sided with T-Mobile in applying Pennsylvania law based on the language of the T-Mobile customer agreement, which provided that Pennsylvania law will apply to this dispute regarding a Pennsylvania resident’s purchase of a phone in that state. Because Pennsylvania substantive unconscionability law is more tolerant of T-Mobile’s arbitration provisions than California’s, the court granted T-Mobile’s motion to compel arbitration. Turning to the other parties, the court agreed that Google, which designed the phone, and HTC, which manufactured it, could not be sued under the federal Communications Act because they are not “common carriers.” The court also agreed that the plaintiff’s state and federal law warranty claims are preempted by the Communications Act, finding that they were essentially “attacks on T-Mobile’s rates and market entry” which are issues subject to the FCC’s exclusive jurisdiction. The court granted plaintiff leave to amend her complaint against Google and HTC to address, for example, “actual defects of the Google Phone or its applications” which the court noted “do not challenge a carrier’s rates or market entry and hence would not be preempted.” McKinney v. Google, Inc., No. C 10-01177 JW (N.D. Cal.).
• On November 15, 2010, the US Supreme Court denied, without opinion, petitions for writs of certiorari filed by Core Communications and state public utility commissions seeking review of the DC Circuit’s January 2010 affirmance of the FCC’s November 5, 2008 order applying pricing rules for the termination of telecommunications traffic to Internet Service Providers. Core and the state commissions challenged the FCC’s authority to set those rates under sections 251 and 252 of the Communications Act and Supreme Court precedent limiting the FCC’s role in setting rates to establishing the methodology. Core Communications, Inc. v. FCC, No. 10-185; Pennsylvania Public Utility Commission v. FCC, No. 10-189.

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

Legislative Outlook

• On November 17, 2010, the US Senate Communications Subcommittee held a hearing titled “Television Viewers, Retransmission Consent, and the Public Interest.” Witnesses included Glenn Britt, Chairman, President, and CEO of Time Warner Cable, and Chase Carey, Deputy Chairman, President, and COO of News Corporation. Sen. John Kerry, D-Mass., Chair of the Subcommittee stated in his opening remarks that “The pay TV industry has become robustly competitive, while local broadcasters have retained their government-granted monopolies and other benefits that now distort carriage negotiations. ... Consumers, caught in the middle, are the ones getting hurt.” For further information, click here.
• Rep. Bobby Rush, D-Ill., the outgoing Chairman of the House Consumer Protection Subcommittee, has indicated that he plans to hold a hearing on “do-not-track” and other privacy issues in early December 2010. Chairman Rush introduced HR 5777, the Building Effective Strategies To Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards Act (BEST PRACTICES Act), on July 19, 2010, and it is expected to be the primary focus of the hearing. It is anticipated that the bill will be introduced again in the lame duck session and will identify what information cannot be collected by websites and third-party advertisers without user approval. Key Republicans and Democrats have stated they would pursue Internet privacy legislation in the new Congress. A list of witnesses for the hearing has not been announced.

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.

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

Legislative Outlook

• On November 17, 2010, the US Senate Communications Subcommittee held a hearing titled “Television Viewers, Retransmission Consent, and the Public Interest.” Witnesses included Glenn Britt, Chairman, President, and CEO of Time Warner Cable, and Chase Carey, Deputy Chairman, President, and COO of News Corporation. Sen. John Kerry, D-Mass., Chair of the Subcommittee stated in his opening remarks that “The pay TV industry has become robustly competitive, while local broadcasters have retained their government-granted monopolies and other benefits that now distort carriage negotiations. ... Consumers, caught in the middle, are the ones getting hurt.” For further information, click here.
• Rep. Bobby Rush, D-Ill., the outgoing Chairman of the House Consumer Protection Subcommittee, has indicated that he plans to hold a hearing on “do-not-track” and other privacy issues in early December 2010. Chairman Rush introduced HR 5777, the Building Effective Strategies To Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards Act (BEST PRACTICES Act), on July 19, 2010, and it is expected to be the primary focus of the hearing. It is anticipated that the bill will be introduced again in the lame duck session and will identify what information cannot be collected by websites and third-party advertisers without user approval. Key Republicans and Democrats have stated they would pursue Internet privacy legislation in the new Congress. A list of witnesses for the hearing has not been announced.

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.