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 FCC has released the Tentative Agenda for its next Open Meeting to be held May 9, 2013, at 10:30 am Eastern. It contains two items: a Notice of Proposed Rulemaking on allocating spectrum in the 14.0-14.5 GHz band to increase broadband access on airline flights; and a Notice of Proposed Rulemaking and Notice of Inquiry on Commercial Space Operations. To read the Tentative Agenda, click here.
The Mobile Market
- Google has been fined approximately $189,000 by the Hamburg Commissioner for Data Protection and Freedom of Information for collecting information from unsecured wireless networks in conjunction with its Street View program. The data collection occurred between 2008 and 2010. This fine is the maximum the agency is authorized to levy. An English translation of the Commissioner’s press release is available here.
- As part of its Learn Everything About Reverse-Auctions Now Program (LEARN), the FCC will host a workshop on May 3, 2013, to discuss technical aspects of the 600 MHz band plan for recovered broadcast spectrum. The workshop will be free and open to the public and will be held in Commission Headquarters. Additional details will be released closer to the event date. To read more, click here.
Federal Trade Commission (FTC) and Privacy Regulation
- The FTC has issued an updated set of frequently asked questions regarding the new Children’s Online Privacy Protection Act (COPPA) Rule, “Complying With COPPA: Frequently Asked Questions”. According to the FTC’s press release, the FAQs are “designed to help website operators, mobile application developers, plug-ins and advertising networks operating on child-directed websites and online services prepare for upcoming changes to the” COPPA Rule. The new COPPA Rule will go into effect on July 1, 2013. More information is available here.
- The U.S. District Court for the Eastern District of Pennsylvania has granted summary judgment for the FTC against a group of individuals and their telemarketing operation, NHS Systems, Inc., for violating the FTC Act and the agency’s Telemarketing Sales Rule (TSR). The FTC had alleged that defendants used third-party telemarketers to unfairly and deceptively market and charge consumers for one or more discount health programs. According to the FTC’s press release, “the telemarketers led consumers to believe they were from, or affiliated with, U.S. government agencies, including the Social Security Administration, the Internal Revenue Service, and Medicare. They promised consumers that they would receive substantial deposits into their bank accounts – in the form of grants, tax refunds, or tax rebates – if they first provided their account or credit card information.” The court found that the defendants violated several provisions of the TSR by: 1) misrepresenting the total cost of the programs; 2) overcharging consumers; 3) charging consumers who were not enrolled in the healthcare program; 4) charging consumers to enroll in what was supposed to be a free program; 5) misrepresenting aspects of goods and services sold; and 6) using audio authorizations that did not comply with the Rule. Among other things, the court has permanently enjoined the defendants from telemarketing and requires them to disgorge almost $6.9 million in fees they collected from consumers. More information is available here.
- The FTC will host a “Cramming Roundtable” on May 8, 2013, to examine unauthorized third-party charges, also known as “cramming,” on mobile phone bills. The roundtable will bring together consumer advocates, industry representatives, and government regulators to explore various issues, including how mobile cramming occurs and how to protect consumers from this practice. The roundtable is free and open to the public and will be held at the FTC’s satellite building conference center, located at 601 New Jersey Avenue, NW, Washington, DC. More information is available here.
- The FTC has announced that it will host a one-day public forum on June 4, 2013, addressing malware, viruses and similar threats facing users of smartphones, tablets and other mobile technologies. According to the press release, the one-day forum “will focus on the security of existing and developing mobile technologies and the roles various members of the mobile ecosystem can play in protecting consumers from these types of security threats.” More information regarding the one-day forum 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”. In advance of the workshop, the FTC is inviting comments on these issues and will accept submissions through June 1, 2013. More information regarding the “Internet of Things” workshop and comments is available here.
New Markets: Smart Grid and E-Health
- The FCC Wireline Competition Bureau is seeking comment on a petition filed by USTelecom for reconsideration and clarification of the FCC’s Healthcare Connect Fund (HCF) Order. The petition asks the FCC to reconsider its decisions to permit health care providers participating in the HCF to install and resell excess capacity, and to receive support for dark fiber. USTelecom also asks the Commission to clarify several parts of the order. Comments are due May 9, 2013, and Reply Comments are due May 20, 2013. To read the Public Notice, click here. WC Docket No. 02-60.
Developments in Intercarrier Compensation
- On April 22, 2013, the Tennessee Rural Coalition, a group of 13 rural local exchange carriers (RLECs), filed their final brief with the Tennessee Regulatory Authority (TRA) in an arbitration proceeding that began in 2003 to establish the rates to paid to the RLECs for terminating wireless carriers’ traffic. The RLECs asserted that since the proceeding began, they were able to negotiate rates and interconnection agreements (ICAs) with every wireless carrier except AT&T Mobility which has sent approximately half a billion minutes of traffic to the RLECs since 2004. Although the FCC’s 2011 Intercarrier Compensation/Universal Service Reform Order prospectively imposed a bill-and-keep regime on wireless-to-RLEC traffic, the RLECs argue that the TRA should set a rate for all wireless traffic terminated by the RLECs prior to July 1, 2012. The RLECs suggest that the TRA review the publicly filed rates that other wireless carriers and the RLECs have adopted and conclude that 2 cents per minute is a reasonable rate for the AT&T Mobility traffic. Docket No. 03-00585.
- Form 499-Q is due May 1, 2013, for all filers that are not considered de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the first quarter of 2013 and projected revenues for the third 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 May 1, 2013, to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC.
- Every non-dominant provider of detariffed interstate interexchange service must certify in writing by May 1, 2013, that it is in compliance with Section 254(g) of the Communications Act which requires that rates to subscribers in rural and other high-cost areas are no higher than rates charged to subscribers in urban areas. This filing is required by Section 64.1900 of the Commission’s rules.
- 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 Federal Register has published the FCC’s Notice of Proposed Rulemaking in PS Docket No. 12-94 regarding the use of broadband in the public safety network. Initial Comments are due May 24, 2013, and Reply Comments are due June 10, 2013. To read the Public Notice announcing these dates, click here. To read the NPRM, click here.
In the Courts
- On April 22, 2013, the Supreme Court declined to review the decision of the U.S. Court of Appeals for the Tenth Circuit that affirmed dismissal of a putative class action asserting that AT&T fraudulently marketed and sold its U-Verse phone, Internet, and television service. The Tenth Circuit had agreed with the trial court that plaintiffs’ claims for fraud, breach of contract, unjust enrichment, civil conspiracy, racketeering, and breach of the implied covenant of good faith and fair dealing must be arbitrated in accordance with AT&T’s terms of service. The petition for certiorari filed by the plaintiffs argued that the Tenth Circuit “brushed aside” one of the plaintiff’s affidavits testifying that he never clicked to agree to U-Verse’s terms of service, and also overlooked the fact that AT&T failed to produce any evidence that another of the plaintiffs agreed to such terms. Hancock v. AT&T Inc., No. 12-1112 (S.Ct. Apr. 22, 2013).
- Rep. Doris Matsui, D-Cal., has introduced H.R. 1685, known as the Broadband Adoption Act, to require allocation of Universal Service Fund for broadband access service to low-income end users. Praised by FCC Chairman Genachowski as a key tool for ensuring that all Americans have access to broadband (click here), the bill immediately garnered significant support. The text of the bill was not available when we went to press.