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 October 14, 2010. It contains three items: 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 an order on reconsideration regarding the CableCARD rules. The Agenda 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 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 September 21, 2010, the FTC obtained summary judgment against Inc.21.com, a firm that placed charges on the telephone bills of thousands of small businesses and consumers for Internet-related services that they never agreed to pay. Over a five-year span, Inc.21.com illegally assessed over $37 million in unauthorized payments from these consumers. In addition to barring Inc.21.com from assessing any new charges on any consumer’s bill, the court ordered the third parties through which the charges were placed to return to consumers any money held in escrow, and ordered the defendants to pay nearly $38 million in restitution. FTC v. Inc.21.com Corp., Case No. 3:10-cv-00022 (N.D. Cal); FTC File Nos. 0923171, X100019. The FTC’s press release on the case can be found here.

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

Developments in Intercarrier Compensation

• On September 23, 2010, the California Public Utilities Commission (CPUC) reaffirmed its decision issued last year finding that Sprint Spectrum LP had violated the terms of its interconnection agreement (ICA) with Pacific Bell Telephone Company d/b/a AT&T California (AT&T) by refusing to pay the transiting service rates stated in the ICA. The CPUC determined that the transiting service rates AT&T charged Sprint under its ICA were not discriminatory even though they were significantly higher than the rates that other carriers paid. The CPUC ordered Sprint to pay AT&T all unpaid amounts and to make late payment charges. In its order affirming its original decision, the CPUC held that Sprint did not provide any “legal basis” supporting its allegation of discrimination, and found that the parties’ ICA differed markedly from the agreement between Verizon and AT&T to which Sprint had attempted to draw a comparison. Docket No. 0712019.
• On September 22, 2010, the Wisconsin Public Service Commission (WI PSC) announced that it will be holding a technical conference on October 12, 2010, to continue its investigation into the intrastate access charges assessed by Wisconsin incumbent local exchange carriers (ILECs). The WI PSC established this docket on its own motion last September to investigate ILEC rate structures and to seek industry comment on preventing “unreasonable and unjust” access rates. At the conference, WI PSC Staff will “present a new strawman proposal, then answer questions and discuss the proposal. The technical conference will conclude with a discussion of how to proceed in the docket.” Docket 5-TR-105.

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

Compliance Notes

• On September 10, 2010, the FCC announced that the proposed Universal Service Contribution Factor for the fourth quarter of 2010 will be 12.9% (DA 10-1716). A copy of the Public Notice can be found here.
• 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.

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

Stimulus This Week

• On September 28, 2010, the National Telecommunications and Information Administration (NTIA) announced the last 56 grants under the State Broadband Data and Development program funded by the American Recovery and Reinvestment Act (ARRA). These grants will be used by the states to support the efficient and creative use of broadband technology by small businesses and community institutions. Each of the 50 states, along with the District of Columbia and five territories, received either new grants or an augmentation of current grants. A copy of the announcement, with a list of each award, can be found here.
• US Commerce Secretary Gary Locke announced the final 14 grants under NTIA’s Broadband Technology Opportunity Program (BTOP) on September 27, 2010. The grants, totaling $206.8 million, will fund 14 projects in 13 states. The awards include two Comprehensive Community Infrastructure Awards, six Public Computer Center Awards, and six Sustainable Broadband Adoption Awards. The announcement, with summaries of each project, can be found here.
• The US Department of Agriculture (USDA) announced its final ARRA funding of broadband projects on September 30, 2010. There were four projects announced. First, USDA has pledged $2.63 million to the Digital Bridge Corporation to fund a broadband network in Panola and Quitman counties in northern Mississippi. The network will benefit 87 community institutions, 18,200 people, and 1,300 businesses in the area. The network will cover 191 square miles. More information on this project can be found here.
  
  The second grant is $7.3 million to a project by The Windstream Corporation. The project will provide digital telephone, high-speed Internet, and high-definition video and entertainment services to residential and business customers in central Arkansas. USDA’s funding will be supplemented with more than $2.4 million in private investment. This project is expected to create 122 jobs and benefit 15,000 people, 330 business and 33 community anchor institutions. More information on this project may be found here.
  
  The third project to receive funding from USDA will allow The Willard Telephone Company to upgrade its current facilities to offer Fiber to the Home in northeastern Colorado. The Willard Telephone Company was awarded $791,947, which will be supplemented by $245,510 of private investment. The project will benefit two military facilities, a fire department, 1,900 people, and eight businesses, and will cover a 132-mile area with 93 miles of fiber optic cable. More information on this project can be found here.
  
  Finally, the Arizona Nevada Tower Corporation will receive $7.75 million from USDA, in addition to $148,500 in private investment, to offer a state-of-the-art microwave radio backbone and middle-mile system that will provide bandwidth to wireless Internet service providers (WISPs), anchor institutions, and enterprise users. The project will impact 41,000 people and 186 business and community institutions over 15 service areas in southwest Nevada. More information about this project 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 September 28, 2010, Blair Levin, the former FCC official in charge of crafting the National Broadband Plan, spoke at a Knight Commission symposium on Washington, DC. Mr. Levin criticized the measurement of the speed of broadband to rural residents as a “bad seed.” Mr. Levin argued that it was a “bad idea” to focus on one primary input – speed – because the use to which people put broadband is more important. He identified mobile as the transformative technology of the future, criticizing the prevailing emphasis on wireline technology.

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

Telecom Privacy News

• Staff members at the US Senate have indicated that they will try to work with the US House of Representatives during the lame duck session of Congress in an effort to pass a unified bill aimed at caller ID spoofing. In February 2010, the Senate passed S. 30, the Truth In Caller ID Act, introduced by Sen. Bill Nelson, D-Fla., which would prohibit the practice of spoofing caller ID information with the intent to defraud or harm. The bill was referred to the House on February 24, 2010. On March 3, 2010, Rep. Eliot Engel, D-NY, introduced similar legislation in HR 1258, also called the Truth in Caller ID Act, which was passed on April 14, 2010, and referred to the Senate the next day. The House bill differs somewhat from the Senate version, in that it recognizes that some legitimate business services change caller ID information, and it directs the FCC to implement rules that would allow those services to continue doing so.
• The New York Bar Association has released Ethics Opinion 843 which states that it is permissible for lawyers to access social networking websites to collect damaging information on opposing parties in lawsuits. The Committee on Professional Ethics concluded that attorneys in litigation can access the public pages of another party’s site to obtain information about that person insofar as that site is accessible to all members of the network. The panel also held, however, that lawyers may not deceptively “friend” someone, or cause someone else to do so, in order to get information. The Opinion is available here.
• Further developments have occurred in a case we reported in the August 9, 2010 edition: On September 13, 2010, Mark S. Haltzman, attorney for the Pennsylvania high school student who alleges that school district employees spied on him via a school-provided laptop, filed a motion seeking more than $330,000 in attorney fees and costs. The motion was filed after a judge for the US District for the Eastern District of Pennsylvania ruled that the Lower Merion School District must pay the plaintiff’s fees and costs related to the entry of a preliminary injunction prohibiting the school district from remotely activating the webcams or purchasing any software, hardware, or technology to facilitate remote activation. The alleged surveillance came to light last November, when the assistant principal of Harriton High School reportedly told the student that the school district believed he had engaged in improper behavior at home. The motion to certify the class, to be composed of students who were provided school laptops and their families, remains pending. Robbins v. Lower Merion School District, et al., No. 10-0665 (E.D. Pa.).

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

In the Courts

• On September 29, 2010, the Massachusetts Land Court annulled a Special Permit granting Omnipoint Communications authority to build a cellular tower on cemetery property owned by the town of Littleton, Massachusetts. The court denied Omnipoint’s motion to dismiss the complaint lodged by nearby residents in which it argued that the residents lacked standing. Having denied that threshold motion, the court then ruled that Omnipoint did not prove that it could not have moved the tower site 30 feet away, such that the tower would have been at least 300 feet from the plaintiffs’ property, and thus was not entitled to the requested setback variance. In light of that finding, the court concluded that “as this court has annulled the Zoning Board’s issuance of the Setback Variance, this court now finds and rules that the grant of the Special Permit was in excess of the Planning Board’s authority and must be annulled.” Hoole v. Farnsworth, Nos. 08 Misc 389726 et al.
• On September 28, 2010, the US District Court for the Eastern District of Pennsylvania denied a motion to dismiss a suit by Liberty Towers, LLC suit against the Zoning Hearing Board of Bucks County, Pennsylvania’s Lower Makefield Township. The complaint arose from the Hearing Board’s denial of an application for authority to build a cellular tower in the township on which Sprint and T-Mobile would place their cellular facilities. As the court explained, “Defendants request that this Court strike both of Plaintiff’s claims under the TCA [federal Telecommunications Act]. The Township raises three arguments in support of its motion to dismiss: first, that Plaintiff lacks standing to bring this action under the TCA; second, that this action is not ripe for federal judicial review; and, third, that Plaintiff has not properly plead that there is a significant gap in service within the meaning of Section 332(c)(7)(B)(ii)(II).” The court found that the Act was sufficiently broad to include the plaintiff within the class of people potentially injured by violations of the Act, and that the Zoning Board’s denial of the application was final for purposes of judicial review. The court also agreed that the FCC’s 2009 declaratory ruling that a carrier could prove a “significant gap” in coverage by reference only to its own coverage, without regard to whether other carriers provide service in the area, took precedence over an earlier, contrary ruling from the Third Circuit Court of Appeals. Liberty Towers, LLC v. Zoning Hearing Bd. of Tp. Lower Makefield, Bucks County, Pa., No. 10-1666.

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.
• Rep. Cliff Stearns, R-Fla., Ranking Member of the House Communications Subcommittee, stated prior to the recess that there will be no action taken in the waning days of the 111th Congress on draft privacy legislation that he been drafted this year with Rep. Rick Boucher, D-Va., the Chairman of the Subcommittee, or on HR 5777, the Building Effective Strategies To Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards Act (or “BEST PRACTICES Act”) introduced by Rep. Bobby Rush, D-Ill., on July 19, 2010. Speaking at the Online Trust & Cybersecurity Forum, Rep. Stearns stated he is considering holding a combined hearing next year on both pieces of legislation. Rep. Stearns criticized HR 5777 earlier this year for what he said was an overly expansive definition of “covered information,” the establishment of a private right of action for aggrieved individuals, and insufficient safe harbor provisions.

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