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 created a Technological Advisory Council that “will help the Commission to identify important areas of innovation and develop informed technology policies supporting America’s competitiveness and job creation in the global economy.” Its first meeting will be held November 4, 2010, from 1:00 pm to 4:00 pm EST in the Commission Meeting Room at 445 12th Street, SW, Washington, DC. To view the press release announcing the Council, click here.
• The next Consumer Advisory Committee meeting is November 10, 2010, from 9:00 am to 4:00 pm EST. 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 19, 2010, FTC Commissioner Julie Brill revealed that the agency’s upcoming report about online behavioral advertising will include suggestions for how online ad companies can better protect consumers’ privacy, but will not propose new regulations or request that Congress enact new laws. Instead, the FTC likely will continue to advocate that companies provide consistent and simplified notice about online tracking when using or collecting data. Ms. Brill also stated her personal preference for the development of a “do-not-track” mechanism to limit online tracking similar to the popular National Do Not Call Registry used to limit telemarketing. An article on Ms. Brill’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

• On October 15, 2010, the Georgia Public Service Commission (GPSC) received competing filings in its proceeding aimed at lowering intrastate access charges. The proceeding was commenced after the enactment of legislation in July 2010 requiring telecommunications carriers to adjust their intrastate switched access to mirror their interstate rates. The new law requires that incumbent local exchange carriers (LECs) must lower their rates within 5 years, and competitive LECs must do so within 10 years. The law also gradually eliminates Georgia’s Universal Access Fund (UAF) which was created to compensate small rural telephone companies for providing service to underserved, high-cost areas.
  
  In their filings, the Georgia Telephone Association (GTA) and Competitive Carriers of the South, Inc. (CompSouth) offered competing solutions: GTA proposes a $1 per-month increase in rates over a 10-year period; CompSouth proposes a $2.62 per-month rate increase for a five-year period. Verizon and AT&T supported GTA’s proposal, and AT&T also requested that it be allowed to refuse to pay CLECs that are not in compliance with a previous GPSC order requiring CLECs to propose lower access charges by January 1, 2011. Docket 32235-U.
• Follow-up to our story in the last edition: Like the California Public Utilities Commission, the Texas Public Utility Commission (PUC) has also extended the time for AT&T Texas and Sprint Spectrum LP, d/b/a Sprint PCS to negotiate a settlement of their dispute over charges for interMTA traffic that Sprint delivers to AT&T. On October 14, 2010, the Texas PUC granted AT&T and Sprint until January 14, 2011 to resolve the dispute.

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 15, 2010, the Rural Utilities Service (RUS) posted summaries of all of the Last Mile, Middle Mile, and Satellite projects funded under the Broadband Initiatives Program (BIP). The summaries 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 October 21, 2010, the FCC released a white paper titled “Mobile Broadband: The Benefits of Additional Spectrum” which “details the looming spectrum crunch in a concrete, data-driven fashion.” The paper provides a technical analysis demonstrating the need for more spectrum, as well as the value that additional spectrum will provide. Chairman Genachowski, in remarks at the Spectrum Summit held the same day, warned that a spectrum crunch “will stifle American innovation and economic growth and cost us the opportunity to lead the world in mobile communications.” Chairman Genachowski highlighted many of the steps the FCC has taken to release spectrum so far and identified three new initiatives. First, a Notice of Proposed Rulemaking on incentive auctions and using broadcast spectrum for broadband. Second, a Notice of Proposed Rulemaking to expand the experimental licensing program. And, finally, a Notice of Inquiry “to accelerate opportunistic uses of spectrum... including technological advances that enable greater use of secondary markets.” The white paper is available here. Chairman Genachowski’s speech is available here.
• On October 19, 2010, FTC Commissioner Meredith Attwell Baker spoke at a conference hosted by Law Seminars International on spectrum issues in Washington, DC. She proposed four short-term action items for encouraging 4G spectrum development while the FCC works on longer-term goals of freeing up spectrum for wireless use. The four action items are:
  

  1.	completing the FCC’s proceedings on repurposing the MSS bands for terrestrial use;
  2.	enhancing the FCC’s spectrum trading and leasing rules to get more spectrum into the hands of those who are ready to deploy 4G;
  3.	reviewing and revising the FCC’s current technical requirements and service rules to ensure they can accommodate 4G deployments; and
  4.	developing a targeted strategy to promote 4G deployments in rural areas.
  Commissioner Baker stated that the FCC should encourage a better secondary market for trading and leasing spectrum by making more information available rather than by changing any existing rules. With regard to technical requirements, however, she suggested surveying the current rules to determine if any should be changed based on technology advancements. Finally, on rural 4G deployment Commissioner Baker suggested consumer education and signal boosters among other items. Her speech may be found here.

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

Telecom Privacy News

• The US Supreme Court accepted, at the urging of the Obama Administration, a case involving AT&T’s fight to keep secret the information gathered by the FCC during an E-Rate investigation. The Administration wants the high court to rule that corporations may not invoke the personal privacy exception contained in the federal Freedom of Information Act (FOIA). The exception may be used only by individuals, the administration said in a brief signed by Elena Kagan, the newest justice who served in the Justice Department as solicitor general until last month. Kagan will not take part in the case which will be argued early next year. AT&T wants the FCC to withhold all the information it gathered from the company during an investigation into its participation in the federal E-Rate program. The FCC had released some of the information pursuant to a FOIA request from CompTel, but withheld some, citing FOIA exemptions that cover trade secrets and individuals’ right to privacy. CompTel, along with several groups that support transparency in government, backed the Administration’s position on the case. FCC v. AT&T, No. 09-1279.
• A new US Department of Energy report cautions that the rollout of smart grid technologies into US homes raises several data privacy issues that lawmakers need to recognize and address. Smart grid uses telecommunications technology to transmit, distribute, and deliver power to consumers in a more reliable and efficient manner than the traditional electrical grid. It also collects energy consumption data from homes, obtained via “smart meters”, and transmits it back to power distributors. One of the biggest privacy issues is the manner in which third parties should be allowed access to consumer energy usage data. According to the report, “because such data can also disclose fairly detailed information about the behavior and activities of a particular household,” privacy protections must be implemented for ensuring the data is collected, used and shared appropriately. The report is available here.
• Nearly 4,000 military veterans have been notified of an information breach stemming from a Department of Veterans Affairs (VA) mismailing incident. More than 6,000 benefit summary letters were mailed to incorrect addresses, including 3,913 that included the wrong veteran’s Social Security number. As a result of the breach, the VA is offering affected veterans free credit monitoring services. The cause of the mismailing was an error by the third-party vendor, says Roger Baker, Assistant Secretary for Information and Technology. The vendor, Performance Analysis & Integrity, merged current veterans’ data with an old address database, causing the letters to be addressed incorrectly. To see the VA’s monthly privacy reports, click here.

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

In the Courts

• On October 19, 2010, the US Court of Appeals for the Ninth Circuit denied the petition of Apple and AT&T Mobility for permission to appeal the Northern District of California’s certification of a plaintiff’s class against them. On July 8, 2010, the district court certified a class of iPhone owners for claims alleging that Apple and AT&T unlawfully monopolized the aftermarket for iPhone voice and data services. Although the court had dismissed some claims brought against Apple for trespass to chattels and for violations of the Computer Fraud and Abuse Act, the California Penal Code, and the Magnuson-Moss Warranty Act, it found that the antitrust claims were appropriate for class certification. The case now returns to the district court for further proceedings. Holman v. Apple Inc., No. 10-80145 (9th Cir.); In re Apple & AT&TM Antitrust Litigation, No. 07-5152 (N.D. Cal.).
• On October 18, 2010, the US District Court for the Northern District of California issued a ruling in a separate class action against Apple and AT&T Mobility in a suit claiming that Apple and AT&T “perpetrated a classic ‘bait and switch’ fraud scheme in connection with the sale of 3G capable iPads for which [AT&T] is the exclusive 3G service provider.” In brief, the suit challenges the defendants’ heavy promotion of AT&T’s unlimited data plan as an inducement to buy the more expensive 3G-enabled iPads, only for AT&T to then withdraw the availability of its unlimited data plans in early June 2010, after the 14-day return window had lapsed. The court denied AT&T’s motion to compel arbitration based on the language of its form customer contracts, noting that the Ninth Circuit and California and Washington district courts have found earlier versions of AT&T’s anti-class-action arbitration provision unconscionable under those states’ laws. The court denied the motion without prejudice, however, pending the Supreme Court’s ruling in the AT&T Mobility v. Concepcion case, in which it will consider weigh the Federal Arbitration Act, which favors arbitration, against the contract-law principle of unconscionability that courts have used to invalidate arbitration clauses like AT&T’s. The Northern District denied Apple’s request to stay discovery pending the Supreme Court’s decision in Concepcion, ruling instead that the plaintiffs may begin written discovery relevant to their claims against Apple. Weisblat v. Apple Inc., No. C-10-02553 (N.D. Cal.).

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.