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 Intercarrier Compensation l Compliance Notes l Broadband News l In the Courts l Legislative Outlook l Events

Federal Communications Commission (FCC) Announcements

• The next FCC Open Meeting will take place November 30, 2011, at 10:30 am Eastern. We will provide a summary of the agenda when it is released.
• The FCC has released two reports on the number of extant broadcast licenses by type. As of June 30, 2011, there were 30,406 broadcast licenses, 852 of which were Low-Power FM licenses. See the report here. As of September 30, 2011, there were 30,441 broadcast licenses, 848 of which were Low-Power FM licenses. That report is available 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 November 2, 2011, District Court Judge Ellen S. Huvelle denied, in part, the AT&T/T-Mobile motions to dismiss the claims lodged by Sprint Nextel and Cellular South to enjoin their proposed merger. Judge Huvelle held that Sprint and Cellular South have stated valid claims of antitrust harm in the mobile handset product market. She also held that Cellular South may proceed on its claim that the merger would substantially impact the market for GSM (Global System for Mobile) roaming services, but she will not allow Sprint to pursue its own claims regarding the roaming market. Judge Huvelle dismissed other claims made by Sprint Nextel and Cellular South, including claims that the merger would result in higher retail wireless rates, stating “Harm to consumers by way of increased prices is the type of injury the antitrust laws were designed to prevent, but it is not an injury-in-fact that competitors suffer.” Judge Huvelle also dismissed claims regarding the potential impact on wireless spectrum availability, network development, and backhaul service. The full opinion is available here. Sprint Nextel Corp. v. AT&T Inc., No. 1:11-cv-1600 (D.D.C.); Cellular South Inc. v. AT&T Inc., No. 1:11-cv-1690 (D.D.C.).
• On November 3, 2011, the FCC Wireless Telecommunications Bureau released a public notice seeking “information and insights on competition across the mobile wireless ecosystem[.]”  The public notice seeks data and information on industry structure, firm conduct, market performance, and consumer behavior with respect to mobile wireless services, as well as on input and downstream segments, intermodal competition, urban-rural comparisons, and international comparisons. Initial comments are due December 5, 2011, and Reply Comments are due December 20, 2011. The full public notice is available here.
• On November 4, 2011, the House Communications Subcommittee held a hearing on HR 3035, the Mobile Information Call Act of 2011. The proposed legislation is aimed at modifying the Telephone Consumer Protection Act (TCPA), which was enacted in 1991. According to a Subcommittee release, the TCPA “limited the ability of telemarketers to make unwanted solicitations to consumers. It also placed additional restrictions on calls to wireless phones because consumers at the time paid high per-minute rates for even receiving calls.” The hearing was intended to “explore concerns that the restrictions went too far and are inadvertently preventing Americans who rely on wireless phones from receiving useful information, such as alerting consumers of harmful activity on their bank accounts, data breaches, and other pertinent data affecting them directly.” A background memo, including a discussion of HR 3035, is available here. The text of HR 3035 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

• Comments on proposed changes to the FTC Children’s Online Privacy Protection Rule are due November 28, 2011. The FTC press release about the proceeding is available here. The text of the Federal Register notice is available here.

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

Developments in Intercarrier Compensation

• On November 1, 2011, Qwest Corporation and Qwest Communications Company, LLC filed an answer with the Iowa Utilities Board (IUB) denying the substantive allegations contained in the complaint of Aventure Communication Technology LLC. Aventure filed its complaint with the IUB in April of this year, alleging that the Qwest entities and PAETEC Communications, Inc. are sending “phantom traffic” to Aventure’s network in a “fraudulent scheme to avoid paying terminating access charges on intrastate and interstate long distance traffic terminated by Aventure at its central office in rural Salix, Iowa.” Aventure asserts that the Qwest local exchange entity, in coordination with Qwest the interexchange carrier and PAETEC, is intentionally manipulating signaling information on interexchange traffic to make it appear as local traffic and then routing it over Aventure’s facilities dedicated for local traffic. In its answer, however, Qwest “categorically” denied that is “has acted in any way on any incentive to engage in the practice of phantom traffic.” Qwest further denied that its interexchange entity was involved in the calls destined for Aventure, stating that the calls that are the subject of the complaint are being transported by PAETEC “as a long distance carrier, and thus any alleged switched access charges” would be owed by PAETEC, and not Qwest. PAETEC has yet to answer Aventure’s complaint. Docket FCU-2011-0014.

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 will go 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 between November 17, 2011 and January 17, 2012. All subsequent tariff filings must likewise be made via ETFS. A copy of the FCC announcement can be found here. DA-11-1706, 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

• Updates on the appeal from the FCC Open Internet Order (Verizon Wireless v. FCC, Case No. 11-1355 and consolidated cases):
  • On October 21, 2011, MetroPCS filed its petition for review challenging the Order for many of the same reasons as Verizon, arguing that the FCC exceeded its statutory authority in issuing the Order.
  • On October 28, 2011, several entities filed motions to voluntarily dismiss their petitions, including Mountain Area Information Network, Media Mobilizing Project, and People's Production House, which were all represented by the Media Access Project. 
  • Also on October 28, 2011, ITTA - The Independent Telephone & Telecommunications Alliance moved to intervene on the ground that it “represents members who would be adversely affected if the Order is sustained.” 
  • On November 2, 2011, the Open Internet Coalition moved to intervene in support of the Order, because “[i]ts members include Internet content and application providers that rely upon the Internet for distribution to their users, and, consequently, their interests will be substantially affected by the Order and any decision by this Court concerning the Order.
• Senator Kay Bailey Hutchison, R-Tex., has stated that she has enough signatures on a Resolution of Disapproval of the Open Internet Order to introduce it in the Senate for consideration under the Congressional Review Act. She expects a vote as early as the week of November 7. If the Senate approves the Resolution, it would face a likely veto by President Obama, thus allowing the rules to go into effect subject to the ongoing appeal at the D.C. Circuit. The Senator’s statement about the Resolution 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 2, 2011, after its first order was vacated and remanded by the Supreme Court in 2009, the Third Circuit Court of Appeals found again that the FCC acted arbitrarily when it veered from prior precedent in fining CBS $550,000 for broadcasting a fleeting glimpse of Janet Jackson’s bare chest during the halftime show of the 2004 Super Bowl. As the court explained, “if anything, Fox [the Supreme Court’s decision that prompted the remand] confirms our previous ruling in this case and that we should readopt our earlier analysis and holding that the Commission acted arbitrarily in this case.” The court again concluded that the FCC was not entitled to fine CBS here because it did not announce its change in its indecency policy – to make the airing or fleeting expletives and indecent images punishable even if not repeated – until after the Super Bowl event occurred. As the court explained, the Supreme Court’s decision makes clear that “an agency may not apply a policy to penalize conduct that occurred before the policy was announced.” CBS Corp. v. FCC, No. 06-3575 (3d Cir.).

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

Legislative Outlook

• The Judiciary Committee’s promised hearing on HR 3261, the Stop Online Piracy Act, which was previously announced for November 16, 2011 (see October 31 edition of This Week in Telecom), has not yet been confirmed by the Committee’s webpage.
• Rep. Greg Walden, R-Ore., Chair of the House Commerce Committee, together with Sen. Dean Heller, R-Nev., have released statements on two bills aimed toward FCC reform. Chairman Walden introduced both bills. HR 3309, the FCC Process Reform Act of 2011, would include provisions mandating that comment cycles be no shorter than 30 days for initial comments and 30 days for reply comments, and a requirement that the FCC publish summaries of all items on circulation before the Commission and which Commissioners have failed to vote an item that has been pending 60 days or more. HR 3310, the Federal Communications Commission Consolidated Reporting Act, would require the FCC to release, in the last quarter of every even-numbered year, a report on the state of competition in the video programming, satellite, telecommunications, and mobile wireless markets. The report would also include findings under section 706 regarding access to advanced services, and whether any laws or regulations are acting as a barrier to entry into any communications market. Chairman Walden stated in support of the bills that “Taking a page from the President’s executive order, we have been examining ways to improve transparency and efficiency at the FCC. We have reached out to our Democratic colleagues, Chairman Genachowski, each commissioner, and job creators to identify what current FCC processes work and what can be improved.”
  
  The Committee’s summary of the bills, along with Chairman Walden’s and Senator Heller’s full statements, is available here.
  
  HR 3309 is available here.
  
  HR 3310 is available here.

Please contact Stephanie Joyce (contact information below) for further information.

Upcoming Events

• Jeffrey Rummel, a Partner in our Group, will deliver a presentation titled “FCC Licensing/Regulation of the Manufacture, Development & Testing of Military Communications Systems” at the Military Wireless Conference to be held November 15-17, 2011, in Las Vegas. For more information or to register, click here.

Please contact Ross Buntrock, Jonathan Canis, Stephanie Joyce, or Jeffrey Rummel (contact information below) for further information.

For further information, please contact any of our attorneys in the Arent Fox Telecommunications Group, including: