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.

Federal Communications Commission (FCC) Announcements

  • The Tentative Agenda for the next FCC Open Meeting on June 27, 2013, contains five items, including a Declaratory Ruling to clarify how customer proprietary network information (CPNI) rules apply to mobile devices, as well as Staff presentations on the status of Universal Service reform and the broadcast spectrum incentive auctions. To read the full Tentative Agenda, click here.
  • The FCC’s Office of Communications Business Opportunities will hold an Access to Capital Conference and Workshop on July 11, 2013, from 9:00 am to 4:30 pm. The morning session will feature a panel discussion, and the afternoon session will consist of one-on-one meetings where small businesses can discuss funding opportunities with the panelists. To register for one of these sessions, send a company profile via email by June 21, 2013, to Karen.Beverly@fcc.gov. For more information, click here.

The Mobile Market

  • The last two FirstNet Workshops will be in Boston (June 19-20) and Memphis (June 26-27). FirstNet is the organization charged with building a nationwide public safety broadband network. (See May 20 edition of This Week in Telecom.) For more information, click here.
  • On May 1, 2013, the FCC released a Notice of Proposed Rulemaking on measures it may adopt to prevent the use of cellphones by incarcerated persons. In the NPRM, the FCC states that “[p]risoners’ use of contraband wireless devices to engage in criminal activity is a serious threat to the safety of prison employees, other prisoners, and the general public.” The proposed rules would make it easier for correctional facilities to enter into leases or spectrum management agreements, allowing them to control which wireless devices were able to access the network. In addition, the proposed rules would “require wireless providers to terminate service, if technically feasible, to a contraband wireless device if an authorized correctional facility official notifies the wireless provider of the presence of the contraband wireless device”. The Commission also invites comment on “other technological approaches for addressing the problem of contraband wireless device usage in correctional facilities.” Comments on the NPRM are due 30 days after Federal Register publication, and Reply Comments are due 45 days after publication. The NPRM is available here. GN Docket No. 13-111; ET Docket No. 08-73; WT Docket No. 10-4.

Federal Trade Commission (FTC) and Privacy Regulation

  • The Federal Trade Commission is seeking public comment on proposed amendments to strengthen the Telemarketing Sales Rule (TSR) protections against fraudulent charges and services. In particular, the FTC seeks to curtail the use of a number of payment methods favored by unscrupulous entities, including (i) “stop[ping] telemarketers from dipping directly into consumer bank accounts by using unsigned checks and ‘payment orders’ that have been ‘remotely created’” and (ii) “bar[ring] telemarketers from getting paid with traditional ‘cash-to-cash’ money transfers, as well as ‘cash reload’ mechanisms.” Public comments on the proposed amendments to the TSR will be accepted until July 29, 2013. More information is available here.
  • The FTC has announced a public workshop to be held on November 21, 2013, in Washington, DC to address the consumer privacy and security issues raised by the growing connectivity of consumer devices such as smart phones, cars, appliances, and medical devices, also commonly referred to as “The Internet of Things”. More information regarding the “Internet of Things” workshop and comments is available here.

New Markets: Smart Grid and E-Health

  • The Trustworthy Cyber Infrastructure for the Power Grid (TCIPG) Center, an organization funded by the Department of Energy and Department of Homeland Security, will be hosting its third “summer school” for utility and industry practitioners, researchers and students on June 17-21, 2013, in St. Charles, Illinois. The program “is designed to provide an essential background in the basics of security and resiliency for cyber infrastructure in power and smart grids.” More information regarding the TCIPG’s summer school is available here.

Developments in Intercarrier Compensation

  • On June 13, 2013, the New York Public Service Commission (NYPSC) voted unanimously to adopt a joint proposal submitted by Verizon New York, Commission Staff, and a number of other local exchange carriers to defer any further state reform of intrastate switched access rates pending further action by the FCC. This phase of the NYPSC’s review of intrastate access rates began September 13, 2012, and sought to address both intrastate switched access rates and the state’s Targeted Accessibility Fund (TAF) for high-cost areas. In its recommendation to defer to the FCC, Commission Staff stated that it would be “prudent to wait for the FCC to address originating access as part of its overall reform of intercarrier compensation but also that acting before the FCC did could create a risk of inconsistent federal and state transition schedules and recovery mechanisms.” In its order adopting the joint proposal, however, the NYPSC stated that if the FCC does not act on originating access rates by July 2014, the NYPSC will immediately implement an access charge reform plan. Docket No. 09-M-0527.

Compliance Notes

  • The FCC requests comment on its proposed methodologies for allocating and collecting its annual regulatory fees from its licensees. Initial Comments are due June 19, 2013, and Reply Comments are due June 26, 2013. The FCC proposes to maintain its current rate of $0.00375 per assessable dollar for Fiscal Year 2013 for interstate telecommunications service providers (ITSPs), and $0.17 per subscriber for each Commercial Mobile Radio Service Provider (CMRS). As part of this proceeding, the FCC is proposing to change how it calculates the revenues needed to regulate all of its licensees in Fiscal Year 2014. The FCC also proposes to combine the wireless and ITSP categories, and having this combined category of providers pay their annual regulatory fees based upon their revenues, as the ITSPs do currently.

The FCC will no longer accept checks and hardcopy forms (such as FCC Form 159-W) beginning October 1, 2013, for payment of regulatory fees. This change is made in accordance with the Office of Management and Budget’s Open Government Directive, which requires the US Treasury to move towards paperless payment processes. A copy of this Notice of Proposed Rulemaking (FCC 13-74) can be found here. (MD Docket No. 12-201, MD Docket No. 13-58, MD Docket No. 08-65).

  • The FCC Wireline Competition Bureau has announced its proposed funding requirements for the North American Numbering Plan (NANP) Administration for Fiscal Year 2013. Every telecommunications carrier and interconnected Voice over Internet Protocol (VoIP) provider is required to contribute to numbering administration on a competitively neutral basis, as follows: either a minimum of $25; or the product of the carrier’s end user telecommunications revenue, as reported on the filer’s FCC Form 499-A, multiplied by the contribution factor proposed to be 0.0000302. This contribution factor will become effective June 12, 2013, if the FCC takes no action regarding the proposed fund size before then. A copy of the Public Notice (DA 13-1215) can be found here. (CC Docket No. 92-237).
  • The Universal Service contribution factor for the second quarter of 2013 is 15.5%. A copy of the Public Notice announcing the rate can be found here. (DA 13-422)
  • The FCC has proposed a Universal Service Fund contribution factor of 15.1% for the Third Quarter of 2013. It will be deemed approved on June 27, 2013, unless the FCC amends it prior to that date. A copy of the Public Notice announcing the proposed contribution factor can be found here. (DA 13-1361)

Broadband News

  • On June 14, 2013, President Obama released a report titled “Four Years of Broadband Growth” detailing the advances in broadband deployment that America has seen in recent years. It includes a Memorandum from the President setting forth several initiatives aimed at increasing the amount of wireless spectrum available for commercial broadband. The Memorandum also urges federal agencies to engage in public-private research and development projects. The White House press release, which includes a link to the report, is available here.

In the Courts

  • On June 10, 2013, the U.S. District Court for the Southern District of Florida agreed to certify for an interlocutory appeal to the Eleventh Circuit various rulings it made at the summary judgment stage of a Telephone Consumer Protection Act (TCPA) putative class action against, among others, Gulf Coast Collection Bureau. As we reported last month (click here), the court held that the FCC had wrongly interpreted what “prior express consent” means in the TCPA when the agency held that the act of providing your phone number constituted “prior express consent.” Since the court found that to be implied, not express, consent, the court found that the defendant did not have prior express consent to call the plaintiff at the number he gave upon admission to the hospital when he had failed to pay a particular medical bill. In light of the court’s refusal to apply the FCC’s interpretation of this key language in the TCPA, Gulf Coast asked the court to stay the case and have the Eleventh Circuit weigh in on the principal legal issues. Interlocutory appeals are rarely granted; they require a “pivotal and debatable” question of law that can be abstractly stated without regards to the facts of the case. The court noted that its opinion diverged with those of various other courts, including the Seventh Circuit, and acknowledged that “the Eleventh Circuit might reach a different conclusion” than this trial court did. The court also noted that “this is an important area of the law, especially after [the Supreme Court’s decision in Mims v. Arrow Financial Services], which opened the federal courthouse doors to TCPA lawsuits.” Because “Gulf Coast will likely be entitled to summary judgment” if the Eleventh Circuit reverses, the court agreed to stay the case, including briefing on class certification, pending the Eleventh Circuit’s disposition of the interlocutory appeal. Mais v. Gulf Coast Collection Bureau, Inc., No. 11-61936-Civ-Scola (S.D. Fla. June 10, 2013).

Legislative Outlook

  • The Senate Commerce Committee will hold a hearing on the nomination of Tom Wheeler as Chairman of the FCC tomorrow, June 18, 2013, at 2:30 pm in 253 Russell. For more information, click here.
  • On June 12, 2013, Sen. John “Jay” Rockefeller IV, D-W.Va., Chair of the Senate Commerce Committee, has introduced the Fair Telephone Billing Act of 2013 to target cramming. Sen. Amy Klobuchar, D-Minn. and Sen. Richard Blumenthal, D-Conn., joined in the bill. In a press release, Sen. Rockefeller stated, “We’re shining a spotlight on devious efforts to trick consumers through a web of misleading and confusing phone bill charges.” In conjunction with introducing the bill, Sen. Rockefeller sent inquiry letters to AT&T, Verizon, Sprint, and T-Mobile posing several data requests related to disputed third-party charges. Responses are requested by June 28. To read the press release, bill text, and inquiry letters, click here.