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 will hold a Spectrum Summit on October 21, 2010, to discuss “the economic and social importance of solving the spectrum crunch for mobile broadband.” Pre-registration is required, by sending an e-mail to SpectrumSummit@fcc.gov, and will close on October 19, 2010. The session will be available via live webcast. Further information 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.
• Reply Comments on the Further Inquiry into Two Under-Developed Issues in the Open Internet Proceeding 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 13, 2010, the FTC filed comments with the FCC in response to its Notice of Inquiry (NOI), released April 21, 2010, regarding whether the FCC should establish a voluntary program for cyber security certifications. The FTC made three recommendations: (1) the program’s objectives and practices should allow for flexibility; (2) the program should adjust to new technologies and evolving security threats; and (3) the program should include a strong enforcement mechanism. In the past, the FTC has brought complaints against companies that have failed to provide reasonable and appropriate security measures to counteract basic security threats. The FCC’s NOI can be found here. The FTC’s comments can be found here.

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

Developments in Intercarrier Compensation

• Follow-up to our story in the last edition: On October 12, 2010, the California Public Utilities Commission (CPUC) granted a motion for stay filed by AT&T California requesting that its case against Sprint Spectrum L.P., d/b/a Sprint PCS, be held 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 argues that AT&T unilaterally changed the parties’ billing factor contained in their interconnection agreement (ICA) and seeks an order requiring AT&T to refund all payments Sprint has made above the “just and reasonable rate.” AT&T requested that the CPUC hold the proceeding in abeyance until January 10, 2011, and that relief was granted. Docket No. C0909003.
• Also on October 12, the Minnesota Public Utilities Commission issued an order approving an interim settlement agreement between Qwest Corp. and POPP.com, a competitive local exchange carrier (CLEC). POPP.com’s August 2008 complaint alleged that Qwest unlawfully began imposing termination fees on customers who switched from Qwest to POPP.com in violation of the parties’ ICA. As part of the settlement, Qwest agreed to revise immediately its price lists to waive the termination fees if the customer purchases the identical services from a reseller and that reseller purchases the service from Qwest with a term of not less than 12 months. Qwest also agreed that, within six to 12 months, it will file a tariff revision to eliminate termination fees completely in resale situations. Docket No. 09-1054.

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

• The National Telecommunications and Information Administration (NTIA) is seeking additional funding for oversight of its Broadband Technology Opportunities Program (BTOP). Currently, NTIA needs to seek either an additional appropriation from the lame-duck Congress in November, or seek to “reprogram” existing funding to support oversight of BTOP.
  
  President Obama allocated $24 million for broadband oversight in his proposed budget for fiscal year 2011. The Senate Appropriations Committee has provided $16 million for oversight for BTOP in its appropriations bill for 2011, but Congress has not included these monies in its Continuing Resolution which is effective from October 1, 2010 to December 3, 2010. It is possible that Congress will approve another Continuing Resolution that will carry through early 2011 while it finalizes the appropriations.
  
  Through the reprogramming process, NTIA can utilize existing funds for oversight of BTOP. This process would require approval from the Office of Management and Budget, as well as the Commerce Subcommittees of the House and Senate Appropriations Committees. NTIA also has the option of using some of its administrative funding to task existing personnel with oversight of BTOP.
• Citynet, LLC (Citynet), a West Virginia-based Internet Service Provider (ISP), is calling for NTIA to suspend the BTOP grant issued to the State of West Virginia until the state modifies its deployment plan. The State of West Virginia was allocated $126 million for construction of high-speed broadband infrastructure.
  
  James Martin, President and CEO of Citynet, sent a letter on October 6, 2010, to both Earl Devaney of the Recovery Accountability and Transparency Board and Lawrence Strickling of NTIA raising several shortcomings of West Virginia’s current plan, including:
  • The state’s initial application stated that it would benefit 700,000 residential and 110,000 business customers, but the current plan only benefits state agencies;
  • The plan does not address affordability for these types of services;
  • The plan does not create a middle-mile solution, but rather provides only for isolated fiber extensions to specified state agencies; and
  • The plan will not result in further economic development and job creation.
  Martin requests that the grant be suspended until NTIA has a chance to review and analyze these issues, and asks that the State of West Virginia be required to respond to these items in an open forum. A copy of the letter 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

• On Thursday, October 21, 2010, staff from the FCC’s Consumer and Government Affairs Bureau and the Office of Engineering and Technology will hold a meeting to “discuss technical methods for performance testing of residential fixed Internet service and procedures to remotely acquire and analyze such data.” This meeting relates to the FCC’s prior proposal to measure residential broadband and request for comment on a proposed methodology. See Consumer Information and Disclosure Public Notice CG Docket No. 09-158, CC Docket No. 98-170, WC Docket No. 04-36, Public Notice, DA 10-670 (rel. April 20, 2010), available here. The meeting will take place in Room 7-B516 at FCC Headquarters, 445 12th Street SW, Washington, DC.
• At its Open Meeting held October 14, 2010, the FCC adopted a Notice of Proposed Rulemaking (NPRM) proposing a new Mobility Fund as part of the overall reform of the Universal Service Fund. The NPRM proposes a one-time expenditure through a “market-based mechanism to target consumers in areas without advanced mobile services, ensuring that America gets the most bang for the USF buck.” Specifically, the NPRM proposes (1) to use $100 million to $300 million from the USF to create the Mobility Fund, (2) to identify the areas unserved by 3G mobile wireless services, and (3) to use a reverse auction – in which the potential providers of services in identified areas without 3G service compete for support from the Mobility Fund by proposing the lowest amount of USF support they would require to serve areas that are currently unserved – to determine which providers and geographic areas will get support. The NPRM also seeks comment on whether to make support available to any unserved area or only a limited set of unserved areas, and the minimum performance and coverage requirements that should be established for the service to be supported by the Mobility Fund. The NPRM is available here.
  
  Commissioners generally praised the proposal, with Chairman Genachowski calling it the “next significant step in reforming and modernizing the Universal Service Fund.” Commissioner Copps highlighted the importance of mobile broadband by noting that during his recent trip to China, he was almost never without a 3G signal, even when traveling down the Yangtze River surrounded by mountains. FCC Commissioner Robert M. McDowell praised the NRPM but still had questions about the proposed auction system and how to ensure that the most remote areas are served.
• The website www.successful.com and the International Economic Development Council recently released a survey of economic development professionals on the economic impact of broadband. Over 90 percent of those surveyed thought the National Broadband Plan goal of 4 Mbps for rural areas is inadequate for impacting economic development outcomes. In addition, “over 55 percent believe speeds of 100 Mbps (the FCC’s goal for 100 million mostly urban and suburban households) or more are needed, but within three years, not 10 years as some federal agencies support.” The survey is available here.

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

Telecom Privacy News

• The FCC and FTC each recently unveiled initiatives aimed at improving privacy in the digital age, especially the privacy of children. The agencies made their announcements at a press event hosted by Common Sense Media at which survey findings were released showing that parents want stronger online privacy protections for children and teens such as a ban on behavioral advertising to children and a parental opt-in policy for location-based services and applications for children. Speaking at the briefing, FCC Chairman Genachowski emphasized the importance of privacy both as a value in its own right and as a factor affecting whether users will have the trust and confidence in online transactions that are needed for the Internet to thrive. FTC Chairman Jon Leibowitz unveiled a multimedia community outreach toolkit that expands on the “Net Cetera: Chatting with Kids about Being Online” booklet; the agency has distributed 5 million copies of the booklet since last fall. The multimedia version, like the booklet, will be available for free. It can be ordered at bulkorder.ftc.gov or downloaded at www.onguardonline.gov.
• The New York Times recently reported additional privacy concerns that may arise as a result of HTML5, a new coding language that will soon power the Internet. According to the story, HTML5 contains a powerful new suite of capabilities that could give advertisers access to many more details about computer users’ online activities. The language makes it easier for users to view multimedia content without downloading extra software, as well as check e-mail offline and find a favorite restaurant or shop on a smartphone. But the language also presents more tracking opportunities, because it uses a process in which large amounts of data can be collected and stored on the user’s hard drive while they are online. Experts say that this process will enable advertisers to see weeks or even months of personal data, including a user’s location, time zone, photographs, text from blogs, shopping cart contents, e-mails, and a history of the Web pages visited. One cited risk is a so-called “supercookie” that stores information in at least 10 places on a computer, far more than is usual. It was developed by Samy Kamkar, a California programmer best known for creating a virus that took down MySpace.com in 2005.

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

In the Courts

• On October 8, 2010, the US Court of Appeals for the Ninth Circuit largely affirmed the dismissal of Telesaurus VPC’s suit against Radiolink Corp. over certain licenses for VHF Public Coast radio frequencies in Phoenix. Telesaurus’s predecessor had won the five licenses at issue in a competitive auction in 1999 – an auction in which Radiolink had made a losing bid. But three months later, Radiolink applied to the FCC for the same (and other) frequencies, and the FCC granted the application. Radiolink used those frequencies for its two-way mobile radio business in Phoenix until at least 2005, at which time Telesaurus reported the issue to the FCC. The FCC ultimately replaced Telesaurus’s frequencies with others in Radiolink’s license. Two years later, Telesaurus sued Radiolink for various claims under the Communications Act (47 U.S.C. §§ 301, 308, 309, 312(a), and 503(b)), as well as state-law claims for conversion, unjust enrichment, and intentional interference with prospective economic advantage. The appeals court agreed with the District Court of Arizona’s dismissal of the suit on the ground that Telesaurus had not properly alleged that Radiolink is a “common carrier” subject to suit under the Act. Specifically, the trial court found that the “complaint does not adequately allege that Radiolink’s service is interconnected or pending interconnection … or that it is provided to the public or the other users specified in § 332(d)(1).” The Ninth Circuit found, however, that the trial court had given undue deference to the FCC’s notation of “Regulatory Status: [Private land Mobile Radio Service]” on Radiolink’s license in deciding that Telesaurus could not properly plead factual allegations to establish Radiolink’s common-carrier status. Thus, the Ninth Circuit reversed that portion of the opinion and remanded the case to the trial court so that Telesaurus would be given an opportunity to replead its claims. If Telesaurus can plead sufficient facts to establish Radiolink’s common-carrier status, the surviving suit will proceed on the federal claims. Both the trial court and the Ninth Circuit held that the state-law claims are preempted under 47 U.S.C. § 332(c)(3)(A). Telesaurus VPC, LLC v. Power, Case No. 09-15446, 2010 WL 3928945 (9th Cir.).
• On October 7, 2010, the Court of Appeals of Michigan reversed a decision by the Michigan Public Service Commission (PSC) in which it adopted a mediator’s clarification of a settlement of an ICA dispute between CLEC Quick Communications and ILEC AT&T. The dispute arose over AT&T’s provision of Centrex as an unbundled network element. Because an intervening change in both FCC and Michigan policy had rendered Centrex service not available on an unbundled basis, the Court of Appeals concluded that “the recommended settlement cannot be enforced as written because it provided for something that does not exist. There is no wholesale UNE-based Centrex service available under [the tariff referenced in the mediator’s “clarification” of the settlement agreement].” The court found that both carriers contributed to the confusion: “we are not blind to the sophistication of the parties before us. Each presumably knew of the potential for confusion by the other.” The court concluded that, because there was no meeting of the minds on this material term of the settlement agreement, “the only adequate remedy is to hold that the recommended settlement is unenforceable.” The court remanded the case to the PSC “for a new alternative dispute resolution process, which shall be conducted before a different mediator.” Quick Commc’ns, Inc. v. Mich. Bell Tel. Co., No. 286679, 2010 WL 3928768 (Mich. Ct. App.).

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 US Senate are on recess for the elections. They are presently expected to return November 15, 2010.

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