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 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.
• The FCC has released the final Agenda for the next Open Meeting to be held September 23, 2010, at 10:30 am Eastern. The agenda, available here, contains the same four items previously noticed, including a Second Memorandum Opinion and Order on TV White Spaces and a Report and Order designed to streamline the E-Rate Program.

Federal Trade Commission (FTC) Developments

• On September 16, 2010, Richard Feinstein, the Director of the FTC Bureau of Competition, testified before the House Subcommittee on Courts and Competition Policy. In his testimony, Mr. Feinstein stated that current antitrust laws “are flexible enough to meet the challenges of the high-tech era.” As an example, he pointed to the investigation of Google’s acquisition of mobile advertising firm AdMob. The Commission initially had concerns that the loss of head-to-head competition between the two leading mobile advertising networks would harm the market, but ultimately decided not to oppose the transaction following Apple’s introduction of its own mobile advertising network, iAd. An FTC press release on the testimony can be found here. A copy of the testimony can be found here.
• On September 9, 2010, Apple announced changes to its iStore policy that will allow programmers to use third-party tools to write applications for the iPhone and iPad. This action will likely obviate any FTC investigation of iStore. Although the FTC does not publicly confirm investigations, numerous sources reported earlier this year that the FTC was considering whether Apple’s ban on third-party programming tools is anticompetitive conduct designed to protect Apple’s dominance in the applications market. Apple’s statement on its App Store Development Guidelines is available here.

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

Developments in Intercarrier Compensation

• On September 16, 2010, Verizon New York, Inc. filed petitions to reject access tariffs filed by XYN Communications of New York, LLC and Integrated Path Communications, LLC with the New York Public Service Commission (NY PSC). Verizon asserted that Integrated’s proposed switched access rates, which contain elements rated at $0.05 per minute, violate the NY PSC’s benchmarking regulations that prohibit a LEC from imposing higher access rates than the largest LEC in a particular LATA. In a separate petition, Verizon challenged the XYN tariff on the ground that its rate of $0.0055 per database query for toll-free calls is higher than Verizon’s rates that range between $0.0042 and $0.0093. Verizon argued that “[t]he manner in which XYN intends to apply its 0.55 cent rate is unclear.... If the rate applies only to a single query, as suggested by the wording of the tariff, then the rate would be higher than Verizon’s query rate, and would be unlawful under the commission’s orders.” Docket Nos. 10-01522 and 10-01509.
• On September 14, 2010, Sully Telephone Association, an Iowa LEC, filed suit against Sprint Communications Company, L.P. in the US District Court for the Southern District of Iowa. Sully alleges that Sprint has refused to pay terminating access charges and is currently delinquent in an amount in excess of $750,000. Sully’s complaint contains six counts, including breach of its federal access tariff, violations of Sections 201 and 203 of the Communications Act, and claims based on unjust enrichment, quantum meruit, and conversion. Sully Telephone Association, Inc., v. Sprint Communications Company, L.P., 4:10-cv-00428-JEG-TJS (S.D. Iowa).

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 percent (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 13, 2010, US Department of Commerce Secretary Gary Locke announced $482.4 million in grants under the National Telecommunications and Information Administration (NTIA) Broadband Technology Opportunities Program (BTOP). These grants will fund eleven Comprehensive Community Infrastructure projects, eleven Public Computer Center projects, and fourteen Sustainable Broadband Awards in twenty-two states and the US Virgin Islands. A list of the projects to be funded can be found here.
• On September 16, 2010, NTIA also announced two BTOP grants, totaling $6.1 million, to fund the expansion of broadband service in North Carolina and Washington. In Washington, a grant to the Puget Sound Center Foundation for Teaching, Learning, and Technology will upgrade or build thirty-nine Public Computer Centers. The Foundation also has a partnership with Northwest Justice Project, Washington’s publicly funded legal aid program, to place Public Computer Centers in five rural courts that will allow the public access to online legal resources and other services. In North Carolina, the North Carolina Central University School of Law will receive funding to upgrade broadband service, including a videoconferencing service to provide legal services to low-income residents. A copy of the announcement can be found here. These announcements are part of the second round of BTOP funding. Additional projects will be announced on a rolling basis through September 30, 2010.

Please contact Ross Buntrock, Jon Canis, Alan Fishel, or Jeffrey Rummel (contact information below) for further information regarding stimulus funding.

Broadband News

• On September 15, 2010, the Wireline Competition Bureau issued a Public Notice requesting comment “from business broadband providers, business broadband customers, and any other interested parties regarding the current state of, and trends and issues in, business broadband markets.” Comments are due October 15, 2010, and Reply Comments are due November 4, 2010. The Public Notice is available here.
  
  Chairman Julius Genachowski mentioned the Public Notice in remarks to the eBay “Top-Sellers Summit” in Washington, DC. He highlighted the Public Notice as part of the FCC’s “laser” focus on spurring the economy and supporting small businesses. He also spoke of the many aspects of the National Broadband Plan that will benefit small businesses, from mobile broadband to cybersecurity improvements. The Chairman’s remarks are available here.
• The Free State Foundation has released an essay by former FCC Commissioner Glen O. Robinson (1974-76) in which he criticizes the “moderation” of the proposed “Third-Way” approach to broadband authority as being an “illusion.” Specifically, Mr. Robinson criticized the FCC for using its forbearance powers to “design a new tailor-made form of regulation.” Mr. Robinson is now a Professor of Law Emeritus at the University of Virginia. His essay is available here.
• Reply Comments on the Seventh Broadband Notice of Inquiry (NOI), in which the FCC seeks comment on the definition of “advanced telecommunications” and the proper metrics for evaluating broadband deployment, are due October 5, 2010. The NOI is available here.

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

Telecom Privacy News

• The Electronic Privacy Information Center (EPIC) has filed a lawsuit in the US District Court for the District of Columbia against the National Security Agency (NSA) alleging that it has violated the Freedom of Information Act (FOIA). The lawsuit demands that the NSA produce documents related to its “Information Awareness” partnership with Google. EPIC had submitted a FOIA request to the NSA in February 2010 after seeing reports that the agency partnered with Google to coordinate a response to the cyberattack in China. EPIC has stated that it filed the lawsuit because NSA failed to meet the FOIA deadline for responding to EPIC’s appeal of the refusal to produce the requested materials. Electronic Privacy Information Center v. National Security Agency, No. 1:10 cv-01533-RJL (D.D.C. Sept. 13, 2010).
• The ACLU of Northern California and the Electronic Frontier Foundation have written an open letter to the US Department of Health and Human Services and the Employment and Human Services Department of Contra Costa County, California raising privacy and safety questions about a federal program to track preschoolers with radio frequency identification (RFID) chips at a Head Start program near San Francisco. The groups want to know what measures are being used to protect the privacy and safety of the preschoolers. They also want to know what data is being collected, how long it is being retained, and who has access to it. And they said parents should be informed of the tracking and have a chance to opt out of it. “Public schools should not be chipping students now and asking questions about privacy and safety later,” said Nicole Ozer, the Technology and Civil Liberties Policy Director for the ACLU of Northern California.

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

In the Courts

• On September 9, 2010, the US District Court for the District of New Hampshire granted summary judgment in favor of AT&T and against the Town of Greenfield and its Zoning Board of Adjustment (ZBA) in a case in which AT&T challenged the denial of its application for an area variance to install a 100-foot cell tower in a residential area. The court found in favor of AT&T because the “ZBA’s public-interest determination relies on circular reasoning and fails to recognize that enhanced cellular telephone service and co-location are decidedly in the public interest.” The court concluded that, “[c]areful review of the record ... demonstrates that the ZBA’s determinations either fail to satisfy the written-decision requirement, or are not supported by an adequate quantum of evidence,” and that the “fundamental problem with the ZBA’s decision is that it fails to put the correct evidence on the proper scales in the first instance.” The court ordered the ZBA to “promptly authorize construction of the subject tower as proposed.” New Cingular Wireless PCS, LLC v. Town of Greenfield, No. 09-cv-399-SM (D.N.H.)
• On September 2, 2010, the US District Court for the Northern District of Illinois granted summary judgment in favor of defendant Peerless Network and related defendants against plaintiff Neutral Tandem in a patent-infringement and antitrust case, and invalidated Neutral Tandem’s local transit traffic patent in the process. The court ruled for Peerless on the ground that the challenged services were already provided (by Focal and INS, among others) before Neutral Tandem filed its patent, and that an earlier patent had disclosed the terms of Neutral Tandem’s patent, rendering the patent invalid as a matter of law. Neutral Tandem, Inc. v. Peerless Network, LLC, No. 08 C 3402 (N.D. Ill.).

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

Legislative Outlook

• The Senate Consumer Protection Subcommittee will hold a hearing on S.3742, The Data Security and Breach Notification Act of 2010, on September 22, 2010, at 2:30 pm Eastern in 253 Russell Senate Office Building. The bill, introduced by Sen. Mark Pryor, D-Ark., on August 5, 2010, would require the FTC to adopt rules requiring that entities which obtain personal information establish policies ensuring the secure collection, usage, and storage of that information. The bill would also require that so-called “information brokers” file their security policies with the FTC in the event of a security breach or upon request.
• The Senate Judiciary Committee will hold a hearing titled “The Electronic Communications Privacy Act: Promoting Security and Protecting Privacy in the Digital Age” on Wednesday, September 22, 2010, at 10:00 a.m. in 226 Dirksen Senate Office Building. Scheduled witnesses are: James Baker, Associate Deputy Attorney General; Cameron Kerry, General Counsel of the Commerce Department; James Dempsey, Vice President-Public Policy of the Center for Democracy and Technology; and Brad Smith, General Counsel and Senior VP-Legal and Corporate Affairs for Microsoft Corporation.
• The House Subcommittee on the Constitution, Civil Rights, and Civil Liberties will hold a hearing titled “ECPA Reform and the Revolution in Cloud Computing” on September 23, 2010, at 11:00 am Eastern in 2141 Rayburn House Office Building.

Upcoming Events

• On September 23, 2010, in the Arent Fox DC Office, Telecom Group Partner Ross Buntrock will present the regulatory framework that the European Union adopted in 2009 for telecommunications services. Joining Ross will be Laurent Garzaniti and Matthew O’Regan of Freshfields Bruckhaus Deringer. The new regulatory package, which will be implemented in May 2011, will bring significant changes to the shape of regulation in the telecommunications, media and technology sector in Europe. Registration information is provided 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