Arent Fox's This Week in Telecom - November 28, 2011
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 New Markets: SmartGrid 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 FCC has released the Final Agenda for the next Open Meeting to be held November 30, 2011, at 10:30 am Eastern. It contains the same two items previously noticed: a Report and Order allocating spectrum for interactive medical devices; and a presentation on the Commission’s recent initiatives to increase broadband adoption. To view the Final Agenda, click here. Further information about the first item is provided in the New Markets section below.
- The FCC has released the Tentative Agenda for the Open Meeting to be held December 13, 2011, at 10:30 am Eastern. It contains one item, a Report and Order implementing the Commercial Advertisement Loudness Mitigation Act (CALM Act). To view the Tentative Agenda, click here.
- Comments on the FCC Notice of Proposed Rulemaking on Next-Generation 911 (NG911) service are due December 12, 2011, and Reply Comments are due January 10, 2012. To view the Federal Register notice, click here. To read the NPRM, click here.
Please contact Ross Buntrock, Alan Fishel, Michael Hazzard, or Jon Canis (contact information below) for further information.
The Mobile Market
- On Thanksgiving Day, AT&T and T-Mobile announced they had withdrawn their application to the FCC for approval of their proposed $39 billion merger. AT&T also stated that it was taking steps to pay the estimated $4 billion “break-up fee” to T-Mobile. The decision to withdraw the application came as word circulated that FCC Chairman Genachowski was preparing to send the case to a formal hearing before an Administrative Law Judge, which was understood to be a sign that the Commission was opposed to the merger. In an email release to the media on Friday, AT&T rebuked suggestions that the FCC could block its request to withdraw the application without prejudice, stating “The FCC’s own rules give us this right and provide that the FCC ‘will’ grant any such withdrawal. Further, this has been the FCC’s own consistent interpretation of its rules. We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.” The letter withdrawing the merger application is available here.
- Responses to the FCC Wireless Telecommunications Bureau call for comments on the state of competition in the mobile wireless industry are due December 5, 2011, and Reply Comments are due December 20, 2011. The full public notice is 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 November 22, 2011, the FTC continued its crackdown on illegal robocalls by taking action against a telemarketing operation that allegedly helped clients make robocalls, call phone numbers on the National Do Not Call Registry, and mask Caller ID information, in violation of the FTC’s Telemarketing Sales Rule. The company, Sonkei Communications, Inc., allegedly sold robocall services to telemarketers offering credit card services, home security systems, and grant procurement programs. Sonkei allegedly gave clients the means to hide their identity by transmitting inaccurate caller names on caller ID displays, such as “SERVICE MESSAGE” or “SERVICE ANNOUNCEMENT”. The FTC, through the Department of Justice, is seeking civil penalties and an injunction against Sonkei. More information is available here.
- EXTENSION OF TIME GRANTED: In response to a number of requests citing the complex nature of the questions and issues raised, the FTC has extended the deadline for comments on proposed amendments to the Children’s Online Privacy Protection Rules. The deadline is now December 23, 2011. The FTC press release about the proceeding is available here. The text of the Federal Register notice is available here. The announcement regarding the extended deadline is here.
Please contact Ross Buntrock, Alan Fishel, Stephanie Joyce, or Jason Koslosfky (contact information below) for further information.
New Markets: SmartGrid and E-Health
- As stated above, at its November 30 Open Meeting, the FCC will consider whether four sets of frequencies between 413 MHz and 457 MHz can be used by Medical Micropower Networks (MMNS) that link sensors implanted in patients who suffer from various forms of paralysis. One intended purpose of MMNS is to transmit movement commands from a sensor on a patient’s spinal cord to implants that electrically stimulate nerves. Today, some patients have networks of microstimulators linked by wires implanted underneath their skin. This requires two or three days of operations and can lead to infections. Wireless networks would allow doctors to cease using that technique.
MMNS uses very low frequencies in order to communicate with implants through the patient’s skin. The same wireless technology might be used in the future to restore sight or hearing. Some broadcast engineers are fighting the proposed rules, saying TV and radio stations already use one of the bands to broadcast live from news events and this might interfere with the body networks. The main proponent of MMNS, the nonprofit Alfred Mann Foundation, says tests have proved that these systems can cope with interference as long as all four blocks of spectrum are available. If approved, the rules would go into effect as soon as they are published in the Federal Register. - On November 21, 2011, PG&E asked the California Public Utilities Commission for approval to begin work on six new smart grid pilot projects that will have a total cost of $109 million over four years. These projects will include the installation of smart grid line sensors that will improve communications for grid outage detection as well as enable grid system monitoring and control. PG&E is seeking to recover the costs of these projects through increases in electricity rates.
- On November 8, 2011, the Department of Energy released its “Smart Grid Data Access” Funding Opportunity Announcement (FOA) that will provide up to $8 million to promote partnerships between utilities and third-party technology innovators for the development and implementation of applications that provide access to electricity consumption data. The FOA will have two phases, with funding applications due March 1, 2012. More information 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 November 21, 2011, the Iowa Utilities Board (IUB) issued an order docketing the proposed local exchange service tariff of Broadstar, LLC, d/b/a Primecast after the Office of Consumer Advocate (OCA) filed a petition to suspend and investigate the tariff. On March 30, 2011, the IUB ruled in a separate proceeding that although Primecast offers only VoIP service, which Primecast argued is an information service not subject to the IUB’s jurisdiction, Primecast was nevertheless a “local exchange carrier” under Iowa law and was required to file a local exchange tariff and obtain a Certificate of Public Convenience and Necessity (CPCN). After Primecast filed its tariff, OCA filed a petition to suspend and investigate on November 7, 2011, arguing that the tariff: (1) is in direct conflict with the IUB’s customer service rules; (2) purports to allow Primecast to provide service throughout Iowa although Primecast’s facilities are limited only to certain localities; (3) does not include standard contract forms for the various types of service offered; and (4) contains limitation-of-liability provisions that would preclude the IUB from exercising jurisdiction over certain types of disputes. In response to OCA’s petition, the IUB elected not to suspend Primecast’s tariff, but docketed it for further investigation without setting a full procedural schedule. Docket No. TF-2011-0114.
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
- Each competitive local exchange carrier (CLEC) that has an intrastate switched access tariff on file with the Illinois Commerce Commission (ICC) is required to reduce its intrastate switched access rates by an amount equal to 50% of the difference between its current intrastate switched access rates and interstate switched access rates. Those CLECs must file updated tariff pages reflecting the reduction by January 1, 2012. This is the second part in a step-down process mandated by a recent Illinois statute, and is intended to result in interstate and intrastate switched access rates mirroring each other by July 1, 2012. A notice from the ICC regarding this process may be found here. 220 ILCS 5/13-900.2.
- The FCC rule requiring CLECs to file their switched access tariffs and any supporting materials electronically went into effect November 17, 2011. A copy of the Report and Order establishing the rule can be found here. FCC-11-92, WC Docket No. 10-141.
CLECs must use the Electronic Tariff Filing System (ETFS) to file their initial base tariffs by January 17, 2012. All subsequent tariff filings must likewise be made via ETFS. A copy of the FCC announcement can be found here. The FCC has issued an updated Public Notice to assist CLECs with their filings, which can be found here. DA-11-1706, DA-11-1887, WC Docket No. 10-141. - The Universal Service contribution factor for the Fourth Quarter of 2011 is 15.3%. A copy of the notice can be found here.
Please contact Ross Buntrock, Jon Canis, Michael Hazzard, or Katherine Barker Marshall (contact information below) for further information regarding compliance matters.
Broadband News
- On November 21, 2011, FCC Commissioner Robert McDowell spoke at a lunch sponsored by the Federal Communications Bar Association and stated that he and Chairman Genachowski agree that the FCC should take action on Universal Service Fund (USF) contributions in the first half of 2012. His comments came just days after the FCC released its order altering how USF contributions are used and distributed to support broadband. Commissioner McDowell also spoke about spectrum, praising efforts to free up government-held spectrum for commercial use and advocated for more efficient use of spectrum.
- On November 23, 2011, the European Commission (EC) released a “Communication” stating that it will adapt the 2002 Universal Service Directive to support broadband. It concluded that “[a]t this stage, it would not be appropriate to include mobility or mandate broadband at a specific data rate at EU level.” The EC promised to continue to monitor broadband deployment, but stated that Member States should decide whether to include broadband in national universal service obligations. The Communication is 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 November 23, 2011, the Second Circuit Court of Appeals affirmed a New York federal trial court’s affirmance of a bankruptcy court’s holding that Manhattan Telecommunications Corp. (MetTel) had an allowed claim for over $200,000 of lost profits against debtor Best Payphones. The court agreed that MetTel did not repudiate the parties’ contract by sending a disconnection letter for non-payment under a separate contract. The court of appeals also agreed that adding an $8.08 federal subscriber line charge in its lost profits calculation – making up a quarter of the lost profits claim – was not improper, because MetTel “presented testimony that the charges were believed to be authorized by tariff and that all local exchange carriers invoice and retain the line charge rather than forwarding it to another carrier.” In re Best Payphones, Inc., Nos. 10-2830-cv, et al. (2d Cir.).
Please contact Ross Buntrock, Jon Canis, Michael Hazzard, Stephanie Joyce, or Joseph Bowser (contact information below) for further information.
Legislative Outlook
- The Senate Commerce Committee will hold a hearing on the two nominees to the FCC, Ajit Pai and Jessica Rosenworcel, on November 30, 2011, at 2:30 pm Eastern in 253 Russell Senate Office Building. For more information, click here.
- The full House Commerce Committee will mark-up and vote HR 3309, the Federal Communications Commission Process Reform Act of 2011, and HR 3310, the Federal Communications Commission Consolidated Reporting Act of 2011, on November 29 and 30, 2011, along with other bills. The session will begin at 4:30 pm Eastern on November 29 for opening statements only, and continue at 10:00 am Eastern the next day. To view the Background memo on the legislation and find the text of the bills, click here.
Please contact Stephanie Joyce (contact information below) for further information.
Upcoming Events
- The Federal Communications Bar Association will hold its 25th Annual Chairman’s Dinner on December 8, 2011, at the Washington Hilton, 1919 Connecticut Avenue, NW. The cocktail reception begins at 6:00 pm EDT, with dinner at 7:30 am EDT. To register, 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, including:
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Ross A. Buntrock |
Michael B. Hazzard |
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Jonathan E. Canis |
Stephanie A. Joyce |
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Alan G. Fishel |
Jeffrey E. Rummel |
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Adam D. Bowser |
Jason A. Koslofsky |
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Joseph P. Bowser |
Katherine Barker Marshall |
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G. David Carter |
Stephen Thompson |
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Marcia Fuller Durkin |
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