• On June 9, 2011, the United States Supreme Court reversed a Sixth Circuit decision that AT&T could charge higher, “competitive” rates to CLECs for interconnection facilities, rather than the lower, cost-based rates the FCC ordered ILECs to charge CLECs for such facilities. The Court found that “although the FCC concedes that it is advancing a novel interpretation of its longstanding interconnection regulations, novelty alone is not a reason to refuse deference.” The Court accorded deference to the agency on the ground that Section 251 of the Communications Act is unclear. The Court roundly rejected AT&T’s arguments that the Commission had impermissibly changed the rules, finding that, “[m]ore importantly, AT&T’s characterization of what the Commission has done, and is doing, is inaccurate.” Justice Scalia concurred in the decision, writing separately to note that “Deferring to an agency’s interpretation of a statute does not encourage Congress, out of a desire to expand its power, to enact vague statutes; the vagueness effectively cedes power to the Executive. By contrast, deferring to an agency’s interpretation of its own rule encourages the agency to enact vague rules which give it the power, in future adjudications, to do what it pleases. This frustrates the notice and predictability purposes of rulemaking, and promotes arbitrary government.” Talk America, Inc. v. Michigan Bell Tel. Co., No. 10-313.
  • On June 7, 2011, the federal court for the Northern District of California dismissed Sprint from the putative class action suit alleging false and misleading claims about Sprint’s “4G” wireless service. The court dismissed Sprint on personal jurisdiction grounds, although the company has over 200 subsidiaries operating in California. “As a general rule, the activities of a subsidiary are insufficient to establish personal jurisdiction over a separate parent entity.” Device maker HTC remains in the case. Coronado v. Sprint Nextel Corp., No. 3:11-cv-00706 (N.D. Cal.).