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 October 14, 2010, at 10:30 am Eastern. It contains the same three items previously noticed: a Notice of Proposed Rulemaking on the matter of wireless service “bill shock”; a Notice of Proposed Rulemaking on the plan to designate Universal Service funds for the wireless service Mobility Fund; and a Report and Order and Order on Reconsideration regarding the CableCARD rules. The final Agenda is available 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.
• The Further Inquiry into Two Under-Developed Issues in the Open Internet Proceeding has been published in the Federal Register. Comments are due today, October 12, 2010, and Reply Comments are due November 4, 2010. The Arent Fox Client Alert on the item is available here. The Further Inquiry is available here. Chairman Julius Genachowski’s written statement 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 October 8, 2010, the FTC announced the completion of the Net Cetera Community Outreach Toolkit which is designed to help parents ensure that their children stay safe online. The Toolkit provides helpful information as to how parents can monitor their children’s actions online, including best practices for social networks, online communications, and mobile phones. The FTC continues to consider new rules and regulations to limit the data collected from children online. The Net Cetera website can be found here.

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

Developments in Intercarrier Compensation

• On October 6, 2010, AT&T Tennessee requested that the Tennessee Regulatory Authority (TRA) hold its complaint against Sprint Spectrum L.P. d/b/a Sprint PCS in abeyance while the parties negotiate a potential multi-state resolution to their dispute. AT&T alleged in its complaint that Sprint is improperly delivering interLATA, interMTA traffic over trunks dedicated for local traffic and as a result is failing to pay the appropriate charges for such traffic. Sprint has argued that AT&T unilaterally changed the parties’ billing factor contained in their interconnection agreement and seeks an order requiring AT&T to refund all payments Sprint has made above the “just and reasonable rate.” AT&T seeks an abeyance until Jan. 10, 2011, in the hopes the parties can reach settlement after Sprint submits additional data to AT&T concerning the traffic ratios in dispute. Docket No. 10-00026.
• On October 5, 2010, Core Communications, Inc. filed a motion with the Pennsylvania Public Utility Commission requesting an order directing AT&T Communications of PA, LLC and TCG Pittsburgh, Inc. to pay Core approximately $1.425 million “consistent with the Commission’s September 8, 2010 Opinion and Order ... stating that ‘[t]he non-payment of appropriate intercarrier compensation from one CLEC to another CLEC cannot be condoned as a matter of law and as a matter of sound regulatory policy.’” Core filed its complaint against AT&T in May 2009, alleging that AT&T was refusing to compensate Core for terminating AT&T traffic in Pennsylvania. Core requested immediate payment or, in the alternative, that the Commission direct AT&T to place the amount in dispute into escrow and pay Core at the rate of $0.014/minute for all AT&T calls that Core terminates to its end user customers. In either case, Core argued, “[u]nless swift and decisive action is taken now, AT&T will have every incentive to continue to withhold any payment to Core for the continuing use of its termination services while, because of its significant resources, it erects every conceivable legal maneuver to delay the final resolution of this proceeding.” Docket Nos. C-2009-2108186 and C-2009-2108239.

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

Compliance Notes

• FCC Form 499-Q is due November 1, 2010 for all filers that are not considered to be de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the third quarter of 2010 and projected revenues for the first quarter of 2011. A copy of the current FCC Form 499-Q can be found here.
• 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 October 1, 2010, the Rural Utilities Service (RUS) confirmed that all of the monies available under the Broadband Initiatives Program (BIP) have been disbursed, and encourages those that did not receive monies from BIP to consider applying to RUS’s other programs. The announcement can 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 October 1, 2010, FCC Commissioner Mignon Clyburn spoke at the Telecommunications Policy Research Conference at George Mason University Law School. She emphasized Universal Service reform as a means to increase broadband availability, and expressed support for the National Broadband Plan’s adoption goals. She identified 3G wireless technology as one of the next issues the FCC will address, as well as “wholesale reform” of the Universal Service Fund before the end of the year. Her prepared remarks are available here.
• The US Department of Energy issued two reports on October 5, 2010, focused on the Smart Grid recommendations in the National Broadband Plan. The first report, titled Data Access and Privacy Issues Related to Smart Grid Technologies, focuses on consumer privacy protections in the context of Smart Grid technology. The report recommends consumer education and an opt-out provision as privacy safeguards. The second report, titled Communications Requirements of Smart Grid Technologies, notes that “the communications needs of utilities and the electrical grid are likely to evolve as Smart Grid technologies become more widely used.” The reports are available here.
• On October 6, 2010, CTIA President and Chief Executive Officer Steve Largent spoke at the opening of the CTIA Enterprise & Applications show in San Francisco. Largent stated that the National Broadband Plan’s push to release 500 MHz of spectrum was a “very, very good start,” but that he believes even more spectrum will be needed. He also dismissed the need for Open Internet regulation of wireless networks, claiming that wireless networks are different and require unique management.

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

Telecom Privacy News

• The US Court of Appeals for the Ninth Circuit has affirmed three lower court rulings concluding that federal agents’ computer searches relating to the use of steroids in professional baseball violated the Fourth Amendment. The ruling reaffirms a previous decision by the full court of appeals that the government cannot use the “plain view” doctrine to search seized data for evidence that it lacked probable cause to obtain. The case began in 2002, when the government was investigating allegations that the Bay Area Lab Cooperative illegally provided steroids to 10 professional baseball players. When federal officials learned that the players had tested positive under a new drug testing program, they obtained warrants from two California magistrate judges and a Nevada federal judge for records on those players. In reviewing the seized data, the government learned that approximately 90 other players had also tested positive for steroid use. The government took the position that data on these players fell into “plain view” when it was seized and therefore could be used as evidence against those players. The players and their union moved to have all three seizures quashed and for the return of the seized data and samples. Three different federal judges granted their motions, all of them highly critical of the government’s practices. The Ninth Circuit court blasted the government’s conduct in the case, stating that, among other things, the government deliberately expanded its search beyond the data on the 10 suspected players. It dismissed as “sophistry” and “too clever by half” the government’s plain-view arguments. United States v. Comprehensive Drug Testing, Inc., No. 05-10067, 2010 WL 3529247 (9th Cir. Sept. 13, 2010).
• Canada’s Privacy Commissioner, Jennifer Stoddart, has stated that changes made by Facebook to enhance user privacy have brought it into compliance with Canadian privacy law. “The changes Facebook has put in place in response to concerns we raised as part of our investigation last year are reasonable and meet the expectations set out under Canadian privacy law,” Commissioner Stoddart said in a September 22 statement. Facebook’s official blog states that as a result of the changes, Facebook users now have greater control over how much of their personal information is disclosed to developers of applications such as games and quizzes that are available on the social networking site. Although Facebook has always allowed users to restrict the disclosure of their personal information, those restrictions did not previously apply to third-party developers of applications available on the site.
• The European Commission (EC) has referred the United Kingdom to the European Union Court of Justice for failure to comply with an EU directive on the confidentiality of electronic communications, such as e-mail or Internet browsing. Specifically, the EC objects to a UK law on interception of communications and enforcement by supervisory authorities. The EC initially launched legal action in April 2009 in response to citizen complaints about how UK authorities dealt with concerns about the use of behavioral advertising by Internet Service Providers. The EC has stated that the UK is violating the ePrivacy Directive and Data Protection Directive by failing to establish an independent national authority to supervise the interception of communications and to hear complaints, by authorizing interception of communications where consent has not been given, and by prohibiting and providing sanctions in case of unlawful interception.

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

In the Courts

• On September 30, 2010, the US District Court for the Eastern District of North Carolina granted summary judgment in favor of certain rural local exchange carriers (“RLECs”) against the challenge lodged by AT&T Mobility and Alltel Communications against a North Carolina Utility Commission (NCUC) arbitration decision arising out of the RLECs’ 2005 demand for interconnection and reciprocal compensation rates. The underlying NCUC order agreed with the RLECs that they would be entitled to a single point of indirect interconnection with the wireless carriers. The reviewing court deferred to the NCUC’s finding that section 251 of the Communications Act did not require the RLECs to compensate the wireless carriers for the costs incurred by the intermediate transiting carrier – AT&T’s LEC affiliate – in getting the calls between the RLECs’ point of interconnection and the wireless carriers’ networks. The court also rejected the wireless carriers’ argument that the NCUC may not deviate from TELRIC-based rates: “To read the Act the way that plaintiffs read it, [R]LECs would be [left] with a draconian choice – they could either not enter into reciprocal compensation arrangements with the CMRS providers, and thus receive no compensation for terminating cell phone traffic on their network, or they could perform expensive and time consuming TELRIC cost studies... . Either way they would face significant economic losses. The intent of the Act is to provide for fair competition, not destruction of [R]LECs.” The court concluded by finding that the NCUC’s rates were supported by substantial evidence. New Cingular Wireless PCS, LLC v. Finley, No. 5:09-cv-123, 2010 WL 3860834 (E.D.N.C).
• Also on September 30, 2010, the US District Court for the Eastern District of New York granted summary judgment to Verizon Wireless (VZW) in its challenge of the denial by the Town of Oyster Bay Zoning Board of Appeals of VZW’s application for a special use permit to install its telecommunications equipment. The court found that VZW’s application had been supported by substantial evidence, including expert evidence of the alternatives considered; it also found that the only objections that led to the Board’s denial of Verizon’s application were “merely the speculation of several residents.” The court concluded that the “Board’s position that its decision was based on substantial evidence can only be described as preposterous,” and further concluded, albeit in dicta, that the Board’s decision was “arbitrary and capricious” and “significantly flawed in its analysis and conclusions.” The Board was ordered to grant the application. New York SMSA Ltd. Partnership v. Town of Oyster Bay Zoning Board of Appeals, Case No. 08-cv-4833 (E.D.N.Y.).

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

Legislative Outlook

• Both the House and the Senate are on recess for the elections. They are presently expected to return November 15, 2010.
• Prior to the recess, the Senate passed S. 2847, the “Commercial Advertisement Loudness Mitigation Act” or the ”CALM Act” which targets overly loud commercials on broadcast and cable programming. The bill, introduced in December 2009 by Sen. Sheldon Whitehouse, D-RI, would require the FCC to adopt, within one year, rules based on “the ‘Recommended Practice: Techniques for Establishing and Maintaining Audio Loudness for Digital Television’ (A/85), and any successor thereto, approved by the Advanced Television Systems Committee.” The House version of the CALM Act, H.R. 1084, was introduced by Rep. Anna Eshoo, D-Cal., and passed the House on December 15, 2009. The versions are virtually identical, though S. 2847 contains more extensive language regarding the FCC’s authority to grant waivers of the forthcoming rules.

Upcoming Events

• The Broadband Expo, Connecting Rural America to the World, will be held November 1-3, 2010, at the Gaylord Texan resort in Dallas, Texas. Information about the event is available 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

Jonathan E. Canis
canis.jonathan@arentfox.com
202.775.5738

Alan G. Fishel
fishel.alan@arentfox.com
202.857.6450

Michael B. Hazzard
hazzard.michael@arentfox.com
202.857.6029

Stephanie A. Joyce
joyce.stephanie@arentfox.com
202.857.6081

Jeffrey E. Rummel
rummel.jeffrey@arentfox.com
202.715.8479