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, legislation, and litigation. Follow our Telecom Group on Twitter! Click here.

Jump to a Topic:
FCC Announcements l The Mobile Market l FTC and Privacy Regulation l New Markets: Smart Grid and E-Health l Intercarrier Compensation l Compliance Notes l Broadband News l In the Courts l Legislative Outlook l Events

Federal Communications Commission (FCC) Announcements

• On October 3, 2012, the FCC announced the winners of the first “Mobility Fund” auction. They include T-Mobile and U.S. Cellular. The funds will enable deployment of mobile services in 31 states. To view the full list of winners, click here. The press release about the results is available here.
• The next Open Internet Advisory Committee (OIAC) meeting will be held tomorrow, October 9, 2012, from 10:00 A.M. to 12:00 P.M. in Milstein West A at the Wasserstein Hall/Caspersen Student Center, Harvard Law School, 1585 Massachusetts Avenue, Cambridge, MA 02138. The meeting will focus on issues related to the four working groups established within the OIAC: Mobile Broadband, Economic Impacts of Open Internet Frameworks, Specialized Services, and Transparency. There will be time for public comments at the meeting, and comments also may be submitted beforehand in writing. More information is available here.
• The FCC has released the Tentative Agenda for its next Open Meeting to be held October 17, 2012, at 10:30 am Eastern. It contains three items: a Second Report and Order on streamlined reporting requirements for international services; a Report and Order on protecting Public Safety Answering Points (PSAPs) from “robocalls”; and an Order permitting use of 30 megahertz of spectrum for wireless services while protecting Digital Audio Radio Satellite (DARS) service. To read the Tentative Agenda, click here.

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

The Mobile Market

• Deutsche Telekom AG, owner of T-Mobile USA, Inc., announced last week that it had agreed to acquire control of MetroPCS Communications, Inc. The combined company will retain the T-Mobile name. Following the transaction, Deutsche Telekom will hold a 74% equity stake in the combined company, with MetroPCS shareholders owning the remainder. Break-up fees are reported to range from $150 million to $250 million if the transaction is not completed, but unlike the failed attempt by AT&T, Inc. to take over T-Mobile last year, little resistance from regulators is expected. Deutsche Telekom and MetroPCS stated that the merged entity “will have expanded scale, spectrum and financial resources to aggressively compete with other national U.S. carriers.” They stated that the combined company’s subscriber total to about 42.5 million subscribers with combined annual revenue of $25 billion. They expect to complete the transaction in the first half of 2013.

Please contact Ross Buntrock, Michael Hazzard, or G. David Carter (contact information below) for further information.

Federal Trade Commission (FTC) and Privacy Regulation

• Google, Apple, Facebook, and Twitter, among others, have filed comments opposing the FTC’s further proposed modifications to the Children’s Online Privacy Protection Act (COPPA) Rule. Under the COPPA Rules, a company must, among other things, seek permission from parents before it collects data from users age 12 and under. The proposed modifications to the rules would expand COPPA’s requirements beyond just websites to include games, mobile apps, and other plug-ins like Facebook’s “like” button or Google’s “+1.” The companies argue, in addition to the more general free speech position, that the proposed modifications are unworkable, because they would make a company responsible every time a potentially under-aged user decides to “like,” tweet, or otherwise share information via a social media platform. Child advocacy groups, however, argue that these companies receive a substantial financial benefit from the data they collect and, as such, should have some responsibility for how the data is collected and used. All comments filed in response to the FTC’s proposed COPPA Rule modifications are available here.
• The FTC will host a “Robocall Summit” on October 18, 2012, in Washington, DC. The purpose of the summit will be to examine issues surrounding illegal pre-recorded robocalls. It will also highlight industry innovations that could potentially be used to trace robocalls and prevent illegal robocallers from faking caller ID data. The Robocall Summit will be open to the public, and will include members of law enforcement, the telemarketing and telecommunications industry, consumer groups, as well as other stakeholders. More information about the FTC’s recent efforts related to robocall issues and the Robocall Summit is available here.

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

New Markets: Smart Grid and E-Health

• On September 19, 2012, the California Public Utilities Commission (CPUC) published a white paper regarding the role of state regulation in protecting the smart grid from cybersecurity threats. The white paper recognizes the important role that federal legislation and regulation plays in promoting smart grid cybersecurity, but also discusses its limitations and argues for a more pro-active approach from states. The paper argues that “there is an important role that State regulators need to step into, as much of [the] new [smart grid] infrastructure will be located on the distribution grid, which is currently outside of” federal authority. As such, the white paper examines how the CPUC and other state regulators can further address cybersecurity as it relates to grid resiliency, reliability and safety, and it recommends that the CPUC, in particular, open an Order Instituting Rulemaking (OIR) to further investigate appropriate cybersecurity policies. The white paper is available here.

Please contact Stephanie Joyce, Jeffrey Rummel, G. David Carter, or Stephen Thompson (contact information below) for further information.

Developments in Intercarrier Compensation

• On October 5, 2012, SprintCom, Inc. filed a petition for arbitration with the Illinois Commerce Commission (ICC) to establish an interconnection agreement (ICA) with AT&T Illinois. Sprint stated in its petition that AT&T has been unwilling to agree to terms related to the exchange of wholesale and IP-originated traffic. Sprint stated that it “seeks to use this Interconnection Agreement to exchange Telecommunications Service or Information Service traffic and there is no reason to limit the traffic exchanged to the TDM format. Moreover, Sprint should be able to use the Agreement to terminate traffic on behalf of its wholesale customers.” Sprint also seeks to resolve issues related to methods of interconnection, points of interconnection, the provisioning of facilities and trunks, and compensation for VoIP traffic. Docket No. 12-0550.

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

Compliance Notes

• Form 499-Q is due November 1, 2012, for all filers that are not considered de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the third quarter of 2012 and projected revenues for the first quarter of 2013. A copy of the current FCC Form 499-Q can be found here.
  
  Voice over Internet Protocol (VoIP) providers and Commercial Mobile Radio Service (CMRS) providers who rely on traffic studies to report interstate revenues on FCC Form 499-Q must submit these studies by November 1, 2012, to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC.
• The Universal Service contribution factor for the fourth quarter of 2012 is 17.4%. A copy of the Public Notice announcing the rate can be found here. (DA 12-1484)

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

Broadband News

• On October 2, 2012, International Telecommunication Union Secretary-General Hamadoun Toure spoke at the Global Symposium For Regulators 2012 in Colombo, Sri Lanka, addressing the controversy that has surrounded the upcoming December 2012 World Conference on International Telecommunications (WCIT) in Dubai. He stressed that “[c]ontrary to some of the sensationalist claims in the press, WCIT is definitively not about taking control of the Internet or restricting people’s freedom of expression or freedom of speech.” Rather, he stated, WCIT will promote broadband expansion and “a harmonious and conducive international environment that drives innovation.” WCIT has been criticized as a possible forum where autocratic governments may attempt to enact international regulations that would provide the ability to restrict freedom of speech. Even the U.S. Senate recently passed S. Con. Res. 50, a joint resolution against any changes to the current model. FCC Commissioner McDowell also has been vocal about his concerns regarding the upcoming WCIT as well, writing in a February 2012 op-ed in the Wall Street Journal that the process “could result in a new treaty giving the United Nations unprecedented powers over the Internet.”
  
  Mr. Toure’s speech is available here.
  
  The Senate resolution is available here.
  
  Commissioner McDowell’s op-ed is available here.

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

In the Courts

• On October 1, 2012, Sprint, Qwest, Level 3, WilTel filed for approval of their settlement with  putative class of Pennsylvania landowners in a case alleging improper takings of property for the installation of fiber-optic cable on their property. Under the settlement, the carriers would pay over $8 million, approximately $5.5 million of which would go to the landowners and slightly less than $2 million of which would go to the plaintiffs’ counsel. In exchange, the landowners will grant the carriers an easement to keep their cable where it is and use the adjoining ten feet of land along the cable, but they will not allow construction of larger objects like cell towers. In advocating for approval of the settlement, the parties agreed that “all indicia point to a settlement that was reached after extensive discovery, with due consideration of the parties’ prospects going forward, and in hard-fought, arm’s-length negotiations.” The parties asked for a final fairness hearing any time after June 8, 2013, which will allow time for plaintiffs’ counsel to provide notice to potential class claimants. Lake Forest Partners, L.P. v. Sprint Commc’ns Co., No. 2:12-cv-00999-AJS (W.D. Pa.).

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

Legislative Outlook

• On October 3, 2012, Sen. John “Jay” Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, sent a letter to FTC Chairman Jon Liebowitz urging the agency to continue its efforts at the World Wide Web Consortium (W3C) to press for voluntary “do-not-track” commitments from web browsing companies. The Senator stated that “I fully encourage … governmental entities to actively facilitate the promulgation of voluntary industry standards that serve to protect consumers.” To read the letter, click here.

Please contact Stephanie Joyce (contact information below) for further information.

Upcoming Events

• The Federal Communications Bar Association will hold a event to meet the FCC Bureau and Office Chiefs on October 18, 2012, from 6:00-8:00 pm Eastern at Capital Hilton Hotel, 1001 16th Street, NW, Washington, DC. For more information or to register, click here.

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

For further information, please contact any of our attorneys in the Arent Fox Telecommunications Group.