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 final Agenda for its next Open Meeting to be held November 30, 2010. It contains four items, as one have been added since the Tentative Agenda was released. In addition to the three items previously noticed, the Commission has added a presentation by the Consumer and Governmental Affairs Bureau regarding plans for implementing the Twenty-First Century Communications and Video Accessibility Act. To view the final Agenda, click here.
• Comment dates have been set for the FCC’s “bill shock” proceeding. CG Docket Nos. 10–207 and 09–158, Empowering Consumers to Avoid Bill Shock; Consumer Information and Disclosure, Notice of Proposed Rulemaking, FCC 10–180 (rel. Oct. 14, 2010). Comments are due December 27, 2010, and Reply comments are due January 25, 2011. More information may be found here.

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

Federal Trade Commission (FTC) Developments

• On November 23, 2010, a coalition of consumer advocacy groups consisting of the Center for Digital Democracy, U.S. PIRG, Consumer Watchdog, and the World Privacy Forum filed a complaint with the Federal Trade Commission requesting an investigation and public accounting of how pharmaceutical and online health services gather and use consumer data. The coalition alleges that “privacy policies on health and pharmaceutical sites fail to meaningfully inform consumers of how the data collected … is used” and that “health consumers are the subject of unfair and deceptive practices as they visit medical information sites.” In the complaint, the advocacy groups call upon the FTC, among other things, to: (1) examine data collection and usage practices of pharmaceutical advertisers; (2) review the privacy policy pages on health and pharmaceutical websites and services; and (3) investigate whether there is a violation of the FTC’s endorsement guidelines when advice is given to patients or consumers from seemingly independent health bloggers who fail to disclose that they are sponsored by pharmaceutical or other companies.
  
  A copy of the complaint 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 22, 2010, Wisconsin CALLS CLECs, a competitive local exchange carrier advocacy group, urged the Wisconsin Public Service Commission to defer any order in its docket examining LEC intrastate access charges until the FCC acts to reform intercarrier compensation as it promised in the National Broadband Plan. The Wisconsin Commission established this docket on its own motion last September to investigate LEC rate structures and to seek industry comment on means to prevent “unreasonable and unjust” access rates. CALLS argued that only the “FCC can address all areas of intercarrier compensation and thereby achieve a balanced result. For instance, if the FCC were to lower CLEC intrastate access rates, it could balance that decision by reducing exorbitant ILEC charges for special access.” CALLS therefore recommended that the Wisconsin Commission delay any further action on intrastate reform until “at least six months from when final comments are due in the intercarrier compensation NPRM.” Docket 5-TR-105.

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

Compliance Notes

• Companies that hold only a Non-Dominant Interexchange Carrier (NDIEC) Registration License in California are required to post a performance bond in the amount of $25,000 or 10% of the NDIEC’s intrastate revenue as reported to the California Public Utilities Commission (CAPUC) in the previous year, whichever is greater, by December 3, 2010. In addition, NDIECs are required to pay an annual user fee of $100 each year by January 15th. The CAPUC ordered these new compliance requirements as a result of a California State Controller’s 2007 Audit report that stated the CAPUC’s registration process for NDIECs did not sufficiently scrutinize NDIEC registrants, and that the CAPUC’s collection efforts for monies owed by NDIECs were ineffective when NDIECs ceased operations in California or declared bankruptcy. Carriers that also hold a Certificate of Public Convenience and Necessity in addition to an NDIEC Registration License are not affected by the new requirements. A copy of the order can be found here. The CAPUC has posted a list of NDIECs affected by this decision, which can be found here. D. 10-09-017.
• 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, the National Telecommunications and Information Administration (NTIA) filed its quarterly status report with the Committees on Appropriations for the Senate and House of Representatives, and the Senate and House Commerce Committees. A copy of the report 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

• Reports began circulating late last week that the FCC intends to vote on Open Internet principles in December based on its Title I authority. The reports intensified when the FCC pushed back the scheduled December 15 meeting to December 21, although the FCC has not yet announced what items will be discussed at the meeting. Various stakeholders renewed meetings at the FCC last week on Open Internet issues, including AT&T, the National Cable & Telecommunications Association, Verizon, CTIA, Free Press, and Public Knowledge. Republican lawmakers have publicly opposed any effort by the FCC to adopt Open Internet rules during the lame duck Congress.

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

Telecom Privacy News

• The United Kingdom’s Information Commissioner’s Office recently announced that Google, Inc. has committed to improving its handling of data and taking measures to prevent the further invasion of citizen’s privacy, such as with the collection of unsecured WiFi data by Google’s StreetView vehicles. The agreement commits the company to improving training measures, and the company will now require its engineers to create a “privacy design document” for any new projects. Google also will delete all WiFi data collected by the StreetView vehicles in the U.K. The Information Commissioner’s Office said that over the next several months it will undertake a “full audit of Google’s internal privacy structure, privacy training programs, and its system of privacy reviews for new products.”

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

In the Courts

• On November 19, 2010, the Court of Appeals of Ohio affirmed the grant of summary judgment to marketer Fernandez Discipline, LLC in connection with a fax recipient’s suit alleging that Fernandez violated the Telecommunications Consumer Protection Act (TCPA) and Junk Fax Prevention Act (JFPA) by sending an allegedly unwanted fax. In May 2006, Fernandez sent a two-page fax to a chiropractor advertising an upcoming seminars including one on chiropractor marketing. Four and a half months later, Fernandez received a letter from the chiropractor’s attorney claiming that the fax violated the TCPA and offering to settle the claim for $3,000. Two years later, Cardinal Partners, a party that jointly used the fax number in question, brought a class action suit against Fernandez in Ohio state court. The trial court dismissed the case because the defendant’s fax to the chiropractor fell within the “established business relationship” exemption from TCPA liability, and it was sent two months before the FCC’s JFPA-related rules requiring an opt-out notice became effective in August 2006. Rejecting the appellant’s argument that the TCPA’s “established business relationship” exemption only applied to telephone calls, and not faxes, the Ohio appellate court affirmed the trial court’s ruling, finding the FCC’s comments on the topic sufficient to receive Chevron deference. The court also found that the defendant’s evidence of the business relationship, which included a series of related seminars that the fax recipient had attended, was sufficient to support application of the exemption. Cardinal Partners, Ltd. v. Fernandez Discipline, LLC, No. L-10-1180.
• On November 18, 2010, the United States Court of Appeals for the Ninth Circuit reversed the California federal district court that had denied Verizon’s request to remove a putative consumer class action to federal court. The plaintiff, Dolores Lewis, filed the class action in California state court in December 2009, claiming that Verizon had improperly billed her and others for “premium content,” such as weather reports and sports scores delivered through her landline phone, that she had never ordered. Verizon sought to remove the class action to federal court under the Class Action Fairness Act, which allows class actions otherwise grounded in state law to be removed to federal court where the amount in controversy exceeds $5 million. Verizon had submitted an affidavit claiming that the total charges from the relevant third-party billing aggregator exceeded $5 million. The plaintiff argued that Verizon improperly placed the entire amount of the third-party aggregator’s charges in issue to justify exceeding the statutory $5 million threshold, and the trial court had agreed that plaintiffs only sought recovery of the “unauthorized” charges, not the total charges. The Ninth Circuit held that, to stay in state court, the plaintiff needed to rebut Verizon’s evidence that something less than $5 million was actually at issue: “the Defendant has put in evidence of the total billings and the Plaintiff has not attempted to demonstrate, or even argue, that the claimed damages are less than the total billed. Indeed … the Defendant has conceded that where proposed class members have been billed for services they did not order, they are entitled to a refund. Hence, on this record, the entire amount of the billings is ‘in controversy.’” The case now will be litigated in federal court. Lewis v. Verizon Commc’ns, Inc., No. 10-56512 (9th Cir.).

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

Legislative Outlook

• The House Consumer Protection Subcommittee will hold a hearing titled “‘Do-Not-Track’ Legislation: Is Now The Right Time?” on Thursday, December 2, 2010, at 10:30 am Eastern in 2123 Rayburn House Office Building. For further information, click here. This hearing was presaged by Rep. Bobby Rush, D-Ill., before the holiday (see November 22 edition of This Week in Telecom). 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.
• Rep. Jerry McNerney, D-Cal., has held on to his seat for California’s 11th District. In the final vote tally it was determined that he beat challenger David Harmer by more than 2,500 votes. Rep. McNerney sits on the House Communications Subcommittee.

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.