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.
• 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.

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

Federal Trade Commission (FTC) Developments

• On November 4, 2010, the FTC announced the appointment of Edward W. Felten, Ph.D., as the agency’s first Chief Technologist. Dr. Felten, a professor of computer science and public affairs at Princeton University, will advise the FTC on evolving technology and policy issues. Dr. Felten’s research has focused on areas including computer security, privacy, and technology law and policy. Dr. Felten has been a fierce critic of the music industry’s anti-piracy encryption scheme and has assisted with lawsuits against the RIAA. In addition, Dr. Felten provided evidence in the Microsoft antitrust case, and has served as a board member for the Electronic Frontier Foundation. He also famously hacked a supposedly secure Diebold voting machine in under one minute. An official announcement of Dr. Felten’s appointment 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 3, 2010, the Public Utilities Commission of Ohio (PUCO) unanimously voted to establish a generic investigation into intrastate carrier access reform as a follow-up measure to the legislation signed on June 13, 2010, by outgoing Governor Ted Strickland. The bill essentially deregulated the intrastate access rates of incumbent local exchange carriers (ILECs) provided that their intrastate rates mirror their interstate rates. The PUCO proposes to establish an Access Restructuring Plan in order to “maintain the affordability of local service rates for end-user customers while allowing rural incumbent telephone companies to reduce access charges, on a revenue-neutral basis, thereby encouraging greater competition.” The plan would be financed by compulsory monthly contributions from carriers operating in Ohio. The PUCO invited interested parties to file comments regarding the proposal no later than December 20, 2010, with reply comments due January 19, 2011. Docket No. 10-2387-TP-COI.

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.
• Both the Maine Public Service Commission (Maine PSC) and the Vermont Public Service Board (Vermont PSB) have issued orders asserting jurisdiction over “fixed” Voice over Internet Protocol (VoIP) services offered within these states.
  • On October 27, 2010, the Maine PSC held that the VoIP services offered by Time Warner Digital Cable Telephone, LLC (TWDC) and Comcast Phone of Maine, LLC (Comcast-ME) fall within the definition of “telephone services” under Maine law and, therefore, are subject to the PSC’s jurisdiction. The PSC made its evaluation in two parts. First, it determined whether the services fell within the statutory definition of “telephone service,” which is “the offering of a service that transmits communications by telephone, whether the communications are accomplished with or without the use of transmission wires.” In its order, the PSC stated that this definition is “entirely agnostic with respect to how the call is transmitted or processed” and that the VoIP services in these instances are offered as a substitute for traditional telephone service. Further, the PSC stated, the experience of placing and receiving a VoIP call is “indistinguishable” from calls placed or received from a traditional circuit-switched telephone. “In light of these fundamental similarities in service, we are hard-pressed to see how the purposes of the regulatory system... would be advanced by and interpretation of a ‘telephone service’ that did not include VoIP service.”
    
    The Maine PSC then turned to the question of preemption. Both Comcast-ME and TWDC argued that the PSC was preempted from asserting jurisdiction over their VoIP services by federal law. The PSC, however, relied upon the Eighth Circuit’s decision in Minn. Pub. Utils Comm’n v. FCC, 483 F.3d 570 (8th Cir. 2007), which noted the “practical impossibility of severing the intrastate from the interstate aspects of nomadic VoIP service” that permitted federal preemption of state regulation. The PSC found that here, by contrast, the “fixed” VoIP services offered by Comcast-ME and TWDC are provided in such a way that the end points can be determined. A copy of the Maine PSC’s order can be found here (Docket No. 2008-421).
  • The next day, October 28, 2010, the Vermont PSB issued a similar order in its Investigation Into the Regulation of Voice over Internet Protocol (VoIP) Services, finding that “fixed” VoIP services are “telecommunications services” under Vermont state law, and, accordingly, fall under the jurisdiction of the PSB. However, the PSB’s order also stated that its jurisdiction over nomadic VoIP services, such as Vonage’s DigitalVoice service and AT&T’s CallVantage, is preempted by federal law. Under the Vermont statute, “telecommunications service” is defined as “the transmission of any interactive two-way electromagnetic communications, including voice image, data and information.” The PSB found that the definition would include “transmission of electromagnetic signals through the use of any media such as wires, cables, television cables, microwaves, radio waves, light waves or any combination of those similar media.”
    
    The Vermont PSB then concluded that fixed VoIP services, which require an end user to use a geographically specific telephone number, allow for the provider to distinguish between the interstate and intrastate components of the service and therefore would fall under the jurisdiction of the PSB. Conversely, nomadic VoIP services are “impossible” to separate into interstate and intrastate components and therefore remain subject to the exclusive jurisdiction of the FCC.
    
    In a second phase of the proceeding, the PSB plans to look at the policy considerations of its order, such as how it should exercise its jurisdiction over VoIP services. A copy of the order may be found here (Docket No. 7316).

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

Stimulus This Week

The full posting can be found here.

• On October 28, 2010, the National Telecommunications and Information Administration (NTIA) posted an update on its website that summarizes the projects it selected for stimulus funding under the Broadband Technology Opportunities Program (BTOP). Assistant Secretary for Communications and Information and NTIA Administrator Lawrence Strickling provided an overview of the portfolio of projects and stated that the funding projects will result in:
  • Construction or upgrading of approximately 120,000 miles of broadband networks;
  • Broadband access to approximately 24,000 community anchor institutions;
  • Deployment of middle-mile infrastructure into areas covering 40 million residences and 4 million businesses;
  • Investment in more than 35,000 computer centers in community anchor institutions; and
  • Availability of public computer workstations and training for approximately 1 million new users.

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

Broadband News

• 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.
• On November 4, 2010, the Federal-State Joint Board on Universal Service made several recommendations to the FCC to improve participation in the Lifeline and Link Up programs, including that the Universal Service Fund should be used to support broadband, consistent with the FCC’s National Broadband Plan. The Joint Board also recommends that broadband and mobility services be included within supported services. The recommendations may be found here. A press release outlining the other recommendations may be found here.

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

Telecom Privacy News

• Facebook has reported its discovery that a data broker has been paying application developers to identify user information, and the company has placed some developers on a six-month suspension from its site because of the practice. Some applications on the social-networking site were sending users’ Facebook ID numbers to third-party marketing or data firms in violation of Facebook’s privacy policies. That ID can be used to look up a user’s name and other information on the site and link it to their use of the application. Facebook stated it has reached an agreement with RapLeaf Inc., which it described as “the data broker who came forward to work with us on this situation.” Under the agreement, Rap Leaf agreed to delete all Facebook user IDs in its possession, and also agreed “not to conduct any activities on the Facebook Platform” in the future. Facebook has not identified which developers have been suspended, but noted that they number fewer than a dozen and are small entities. Facebook is developing a mechanism to enable developers who need to share a unique identifier with outside parties, such as content partners, to do so in an anonymous fashion. This new function will be required of all applications by January 1, 2011.
• The Indiana Attorney General is suing health insurance provider WellPoint Inc. for $300,000 for its failure to timely notify insured persons that their medical records, credit card numbers, and other sensitive information may have been exposed online. State officials say the personal records were exposed for at least 137 days between October 2009 and March 2010. The suit alleges that WellPoint learned of the problem on February 22, 2009, but did not begin notifying customers until June. The insurer previously has stated that 470,000 people might have been affected.
• Three class action complaints filed recently in Georgia's Fulton County Superior Court allege that Internet service providers (ISPs) Yahoo! Inc., Comcast Corp., and Windstream Corp. violated federal electronic privacy standards by releasing subscriber information in response to subpoenas that were invalid. The lawsuits allege that the ISPs violated the Stored Communications Act and the Wiretap Act by improperly disclosing subscribers’ private data and information to law enforcement. Under those statutes, when a subpoena is served, the subscriber is entitled to notice of the subpoena and have an opportunity to file a motion to quash, according to Joshua A. Millican, attorney for the plaintiffs. The information allegedly released–without notice to the plaintiffs–included the plaintiffs’ names, addresses, phone numbers, birth dates, genders, Social Security numbers, account creation dates, account statuses, email addresses, login IP addresses, and other information. The cases are Sams v. Windstream Corp., No. 2010CV191484 (Ga. Super. Ct.); Sams v. Yahoo! Inc., No. 2010CV191482 (Ga. Super. Ct.), and Losapio v. Comcast Corp., No. 2010CV191107 (Ga. Super. Ct.).

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

In the Courts

• On October 29, 2010, Magistrate Judge Stephen Wm. Smith of the US District Court for the Southern District of Texas denied, on constitutional grounds, the US Government’s request, under the Stored Communications Act, to compel wireless carriers to provide two months’ worth of historical cell site information for certain persons of interest in a Government investigation. As he explained, “the Government seeks continuous location data to track the target phone over a two month period, whether the phone was in active use or not.” Despite acknowledging that the court had previously granted similar requests, Mag. Smith concluded that “recent months have brought to light important developments in both technology and caselaw raising serious constitutional doubts about such rulings.” With respect to the technological developments, he concluded that, with current location technology, cell site information can and often does reveal non-public information about constitutionally protected spaces. The advances in technology have immediate legal ramifications, he found, agreeing with recent case law: “court decisions allowing the Government to compel cell site data without a probable cause warrant were based on yesteryear’s assumption that cell site data (especially from a single tower) could locate users only imprecisely. Given that network-based technology is now capable of isolating a mobile phone user to a particular floor or room within a building, and that such increasingly precise ‘call detail records’ are now kept by [cellular service] providers, the continuing vitality of those decisions must be doubted (with all due respect).” Given these advances in wireless technology, the carriers’ more sustained record-keeping practices, and the court’s conclusion that such data is not voluntarily conveyed by the user to the carrier, Mag. Smith held that warrantless requests for such data could no longer be granted consistent with the Fourth Amendment. In re Application of the United States of America for Historical Cell Site Data, Nos. H-10-998M, et al. (S.D. Tex.).
• On October 28, 2010, the Supreme Court of Washington affirmed en banc the entry of summary judgment for the Washington Department of Revenue against claims by TracFone Wireless to recover state enhanced 911 (e911) excise taxes that it claimed have not applied to it since 2003. TracFone is a reseller of other wireless carriers’ services and sells prepaid minutes, which may or may not ultimately be used by the customer, to retail customers who provide only their zip code to TracFone; it argued that, under those facts, it was not subject to the state’s e911 tax which is imposed on “all radio access lines whose place of primary use is located within the state, ... [which tax] shall be remitted to the department of revenue by radio communications service companies, including those companies that resell radio access lines ... .” The Supreme Court concluded that “the plain language of the relevant statutes imposes the tax on prepaid wireless cell phone service.” The court also rejected TracFone’s assertions that it could not accurately compute the tax based on the information it collected from its prepaid users, stating that “while TracFone has not required much in the way of personal information for its prepaid wireless service, it does require, at a minimum, the zip code of the place where the phone will be primarily used.” The Court also agreed with the Department that “it is not required to explain to TracFone how to conduct its business in order to comply with the tax collection obligation.” TracFone Wireless, Inc. v. Wash. Dept. of Revenue, No. 82741-9.

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 Senate are on recess for the elections. They are presently expected to return November 15, 2010.
• Three Democratic members of the House Commerce Committee lost their seats in the midterm elections, with one additional seat hanging by a mere 548 votes. The results:
  • Rick Boucher, D-Va., Chair of the House Communications Subcommittee, lost to H. Morgan Griffith (R) in Virginia’s 9th District
  • Baron Hill, D-Ind., lost his seat to Todd Young (R) in Indiana’s 9th District
  • Zack Space, D-Ohio, lost to Bob Gibbs (R) in Ohio’s 18th District
  • Jerry McNerney, D-Calif., holds a 548-vote lead in California’s 11th District over David Harmer (R). Absentee and provisional ballots remain to be counted. Some reports indicate that the race will not be decided until the end of November.
  • The Committee was already down one Democratic member when Charlie Melancon, D-La., left the House to run for Senate. He was defeated by David Vitter (R), and his seat has gone to Jeff Landry (R).
• Five members of the House Commerce Committee are expected to retire at the end of their terms: Bart Gordon, D-Tenn.; Bart Stupak, D-Mich.; John Shadegg, D-Ariz.; Steve Buyer, R-Ind.; and George Radanovich, D-Calif.

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