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.

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FCC Announcements l The Mobile Market l FTC and Privacy Regulation l Intercarrier Compensation l Compliance Notes l Broadband News l In the Courts l Legislative Outlook l Events

Federal Communications Commission (FCC) Announcements

• The Open Internet Rules are expected to be published in the Federal Register within the next few days, based on reports from sources at the FCC. The Office of Management and Budget recently approved the rules, clearing the way for publication. See September 19 Edition of This Week in Telecom. Once published, the rules will go into effect in 60 days and will trigger expected appeals of the rules. Verizon and MetroPCS previously challenged the rules at the United States Court of Appeals for the D.C. Circuit, but the appeals were dismissed as premature. See April 11 Edition of This Week in Telecom.
• On September 21, 2011, the FCC announced a “new and improved” website, www.OnGuardOnline.gov, focused on practical tips and resources on how to be safe, secure and responsible online. The website is the product of a partnership of 16 federal agencies led by the Federal Trade Commission. More information is available here.

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

The Mobile Market

• U.S. District Court Judge Ellen S. Huvelle, of the District of Columbia court, has set February 13, 2012 as the date on which trial will start in the Department of Justice suit to block the proposed AT&T/T-Mobile merger. The trial is expected to last four to six weeks. AT&T and T-Mobile have until September 30, 2011 to file a planned motion to dismiss similar complaints filed by Sprint Nextel Corp. and Cellular South, Inc. Oral argument on the motions to dismiss will be heard October 24, 2011. United States v. AT&T Inc., et al., 11-cv-01560 (D.D.C.), Sprint Nextel Corp. v. AT&T, Inc., et al., 11-cv-1600 (D.D.C.), Cellular South, Inc. v. AT&T, Inc., et al., 11-cv-1690 (D.D.C.).
• Google, Inc. officially launched “Google Wallet” last week. The new application is currently only available to customers on Sprint’s 4G wireless network, but the company plans to make it available on Verizon Wireless, AT&T, and T-Mobile. The program utilizes near-field communication (NFC) technology to transmit digital credit card information that is stored on the phone. With an NFC-equipped phone, consumers can make purchases simply by waving their phone in front of a checkout scanner. Google Wallet currently works with Citi-Mastercards or Google Prepaid Cards. Google and Visa separately announced last week, however, that Google Wallet will work with Visa cards in the future.
• Comments on the FCC Further Notice of Proposed Rulemaking regarding the use of microwave links for wireless backhaul are due October 4, 2011, and Reply Comments are due October 25, 2011. For more information, click here. To view the NPRM, click here.
• Comments on the draft Mobile Medical Applications guidelines from the United States Food and Drug Administration (FDA) are due October 19, 2011. The draft guidelines are available here. Filing instructions are provided in the document.

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

Federal Trade Commission (FTC) and Privacy Regulation

• The FTC will host an open workshop on December 8, 2011, exploring the privacy and security implications raised by the increasing use of facial recognition technology. The workshop may discuss such topics as: the current and future uses of facial recognition technology; special considerations for use of this technology on or by children and teens; and what consumer protections are necessary. Relevant reports and studies may be submitted to facefacts@ftc.gov. More information is available here.
• On September 15, 2011, the FTC announced it is seeking public comment on proposed changes to its Children’s Online Privacy Protection Rule promulgated under the Children’s Online Privacy Protection Act (COPPA). The proposed changes include updating the definition of “personal information” to include geolocation information and other types of persistent identifiers, such as tracking cookies used for behavioral advertising. The FTC also proposes adding new methods for obtaining verifiable parental consent, including electronic scans of signed parental consent forms and video-conferencing, and eliminating “e-mail plus” verification of parent consent which is considered less reliable. The FTC also proposes to strengthen oversight of self-regulatory “safe harbor programs” by implementing reporting and auditing requirements. Comments are due November 28, 2011. The FTC press release about the proceeding is available here. The text of the Federal Register notice is available here.

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

Developments in Intercarrier Compensation

• On September 19, 2011, the Iowa Utilities Board (IUB) denied a motion filed by Qwest Corp. d/b/a CenturyLink seeking an emergency order requiring Royal Telephone Company to continue processing Qwest special access orders. On August 16 of this year, the IUB directed Royal to “(a) cease and desist from all plans to discontinue service to Qwest and (b) to immediately restore service to Qwest, to the extent service has been discontinued prior to issuance of this order.” The dispute between the carriers centers on Qwest’s allegations that Royal is seeking to collect access charges on calls that do not originate on its network. Qwest claims that Royal and an affiliate LEC, Terril Telephone Company, share common ownership with a telemarketing company, Cadre. Cadre receives local exchange service from Terril, but its telemarketing traffic is routed to numbers in the Royal exchange before being rerouted to the called party. When Qwest refused to pay access charges for this traffic, Royal filed a notice with the IUB stating its intent to disconnect Qwest, which then initiated this proceeding. In its September 19 order denying Qwest further injunctive relief, the IUB ruled that it will hold a conference between the parties to narrow the issues in dispute and determine how to proceed. Docket No. M-0470.

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

• On September 21, 2011, the National Telecommunications and Information Administration (NTIA) released “the first significant update” of the National Broadband Map, based on information acquired as of December 31, 2010. The previous map was based on June 30 data. Both the current and previous maps can be found here. More information about the update can be found here.
• The Universal Service contribution factor for the Fourth Quarter of 2011 is 15.3%. A copy of the notice can be found here.

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

Broadband News

• The Internet Corporation for Assigned Names and Numbers (ICANN) recently launched a website and new guidebook with information about the new system that will substantially increase the number of generic Top-Level Domains (gTLDs). As has been reported, ICANN approved a system for domain names that will allow brand owners to register their own gTLDs, such as “.brand”, as well enable the creation of new domain names based upon generic terms like “.travel”, “.bank”, and “.nyc”. ICANN will accept the first round of applications from January 12, 2012 to April 12, 2012, and many of the new gTLDs are expected to go live later in 2012. The website and guidebook are available here.
• On September 19, 2011, the FCC issued a public notice requesting “key information regarding the special access market – services that link cell phone towers, carry data to the Internet, and serve high-volume business customers.” The FCC is seeking the data because “[g]athering this data is the next critical step in the FCC’s review of whether special access rates, terms, and conditions are just and reasonable.” Responses are due December 5, 2011. More information is available here. The Public Notice is available here.
• The deadline for submissions to the “Apps for Communities” challenge has been extended to October 3, 2011. The challenge is a joint initiative of the John S. and James L. Knight Foundation and the FCC aimed toward increasing Internet accessibility for underserved populations. It offers up to $100,000 in prizes to the winning developers. Contest judges include Marc Andreessen, Mayor Cory Booker, Charles Best, and Tom Lee. More information is available here.
• Nominations for the FCC Open Internet Advisory are due October 1, 2011. For more information, click here.
• Reply Comments on the FCC Notice of Inquiry (NOI) for next year’s “section 706” report are due October 4, 2011. To view the NOI, click here.

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

In the Courts

• On September 16, 2011, the U.S. Department of Justice amended its complaint to enjoin the AT&T/T-Mobile merger to include the states of New York, California, Illinois, Pennsylvania, Massachusetts, Washington, and Ohio as additional plaintiffs. United States v. AT&T Inc., No. 11-cv-1560 (D.D.C.).
• On September 19, 2011, the United Stated District Court for the Northern District of Texas largely denied the motion to dismiss of Verizon Communications, and related entities, against claims that they defrauded investors and creditors via spinoff company Idearc. Plaintiffs allege that, as Verizon’s directories business began failing in 2006, it created Idearc, which then transferred billions of assets to Verizon but retained the debts. Idearc was left insolvent to the tune of $9 billion, resulting in its filing bankruptcy. The creditors allege that Verizon “embarked on the complicated spin-off transaction to ‘reap [a] windfall to the injury of Idearc and Idearc’s creditors by stripping Idearc of cash and burdening Idearc with massive debt.’” The court denied the motion to dismiss claims of fraudulent transfer, breach of fiduciary duty, aiding and abetting, and unlawful dividend claims, stating “These detailed and particularized allegations show that Verizon had a motive and opportunity to commit the alleged actual fraudulent transfers, and they permit the court to draw a reasonable inference of Verizon’s intent.” The court did agree with Verizon, however, that punitive damages are not available for breach of fiduciary claims under Delaware law. U.S. Bank Nat’l Ass’n v. Verizon Commc’ns Inc., No. 3:10-cv-1842 (N.D. Tex.).
• Also on September 19, Cellular South became the latest party to bring suit to block the AT&T/T-Mobile merger. Cellular South – like the U.S. Department of Justice, several States, and Sprint – alleges that the proposed transaction violates federal antitrust laws, and seeks a court order enjoining the transaction. It highlights the negative consequences that the proposed transaction would have on wireless competition and service outside of the nation’s most profitable metropolitan markets: “While it is true that regional wireless carriers such as Cellular South cannot compete with AT&T or T-Mobile on a nationwide basis, it is also true that Cellular South and other carriers like it provide absolutely essential competition in rural areas – particularly on the basis of price and in the build-out of rural markets.” Cellular South Inc. v. AT&T Inc., No. 11-cv-1690 (D.D.C.).

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

Legislative Outlook

• On September 21, 2011, the Senate Antitrust Subcommittee held a hearing titled “The Power of Google: Serving Consumers or Threatening Competition?” at which Eric Schmidt, Executive Chairman of Google, was questioned extensively on the company’s share of the search market and allegations of discriminatory treatment of certain products and content. Other witnesses included Jeff Katz, CEO of Nextag, and Jeremy Stoppelman, Co-Founder and CEO of Yelp, who discussed the difficulty of entering the Internet search market. Senate Judiciary Chair Patrick Leahy, D-N.H., was among those who gave opening remarks, stating “The antitrust laws do not exist to punish success. What we try to do through these laws is ensure that business on the Internet remains dynamic, and that new entrants with new business models that will create jobs and improve our economy are not stifled.” The text of all opening remarks and written testimony can be found here.

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

Upcoming Events

• Jonathan Canis and Ross Buntrock, Partners in our Group, will speak at CompTel Plus in Orlando, Florida on October 3, 2011, on a topic titled “Mediation, Complaints and Referrals: What Does It Take to Get Disputes Resolved Before the FCC?” For further information, click here.
• The Mobile Internet Content Coalition (MICC), founded with the assistance of Michael Hazzard and other attorneys in our Group, will hold its first conference, the Mobilizing Mobile Summit, on November 15, 2011, at Georgetown University. MICC advocates free and fair development of mobile technologies, applications, and services. For more information about the event or to register, click here.
• Jeffrey Rummel, a Partner in our Group, will deliver a presentation titled “FCC Licensing/Regulation of the Manufacture, Development & Testing of Military Communications Systems” at the Military Wireless Conference to be held November 15-17, 2011, in Las Vegas. For more information or to register, click here.

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

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	Michael B. Hazzard hazzard.michael@arentfox.com 202.857.6029
Jonathan E. Canis canis.jonathan@arentfox.com 202.775.5738	Stephanie A. Joyce joyce.stephanie@arentfox.com 202.857.6081
Alan G. Fishel fishel.alan@arentfox.com 202.857.6450	Jeffrey E. Rummel rummel.jeffrey@arentfox.com 202.715.8479
Adam D. Bowser bowser.adam@arentfox.com 202.857.6126	Marcia Fuller Durkin durkin.marcia@arentfox.com 212.484.3939
Joseph P. Bowser bowser.joseph@arentfox.com 202.857.6102	Jason A. Koslofsky koslofsky.jason@arentfox.com 202.857.8969
G. David Carter carter.david@arentfox.com 202.857.8972	Katherine Barker Marshall marshall.katherine@arentfox.com 202.857.6104