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.

Federal Communications Commission (FCC) Announcements

  • 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 next FCC Open Meeting is June 27, 2013. We will provide the Tentative Agenda when it is released.

The Mobile Market

  • The Board of Directors of Clearwire Corp. has recommended that shareholders approve a recently revised bid from Sprint Nextel to pay $3.40 per share for their stock. Sprint’s original offer was $2.97 per share. A special committee of Clearwire’s Board “determined that the revised offer, when compared with other potential transactions reasonably available to the Company at this time, is the most favorable potential transaction to the Company’s unaffiliated stockholders.” Dish Network had also made an offer for Clearwire valued at $3.30 per share. Clearwire shareholders are set to vote on the improved offer from Sprint Nextel on May 31, 2013.
  • The mHealth Summit, the world’s largest tradeshow and conference focused on all aspects of mobile health, has announced that the 2013 Call for Presentations is now open. Proposals may be submitted through June 7, 2013. This year’s event is expected to attract 5,000 attendees from 60 countries and will take place at the Gaylord National Resort and Convention Center in Washington, DC on December 8-11, 2013. Sessions will focus on how wireless technologies and healthcare providers can collaborate to improve the delivery of services, and how the implementation and integration of new mobile and wireless technologies are improving workflow efficiencies while reducing the cost of healthcare. For more, click here.
  • The next FirstNet Workshops will be in San Francisco (May 29-30), St. Louis, (June 12-13), 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 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 Illinois General Assembly once again overrode state Governor Pat Quinn’s veto to enact legislation that would allow the state’s utilities to properly recover for their smart grid investments. The law, Senate Bill 9, will take effect immediately, and will ensure that ComEd and Ameren can continue to invest in smart grid technology intended to reduce power outages and provide customers with more choice and control over their energy use. Senate Bill 9 clarifies existing language in the original law and not only provides for the utilities’ ability to recover the costs of their smart grid programs, but also protects ratepayers by including performance clauses that require the utilities to hit specific metrics. The text of Senate Bill 9 is available here.

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 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)

Broadband News

  • On May 22, 2013, the FCC released an order allocating $300 Million for the second round of funding for Connect America Phase I. The FCC previously allocated $300 Million for the first round. The money is intended “to further leverage private investment in rural America and accelerate the availability of broadband to consumers who lack access.” Connect America Fund, WC Docket No. 10-90, Report and Order, FCC 13-73, available here.

In the Courts

  • On May 20, 2013, the US Supreme Court held that federal agencies deserve deference even when determining the bounds of their own jurisdiction. The case involved the FCC’s authority to prescribe wireless tower siting rules under Section 332 of the Communications Act. More specifically, several local governments appealed the FCC’s adoption of mandatory deadlines for disposing of wireless tower siting applications. The Court of Appeals for the Fifth Circuit heard the case and upheld the FCC’s order on both jurisdictional and substantive grounds, reasoning that the mandate in Section 332 to decide applications “within a reasonable period of time” is ambiguous, that the FCC has authority to resolve that ambiguity, and that the timeframes adopted are reasonable. The Supreme Court affirmed the Fifth Circuit, holding that although the jurisdiction of federal courts is, due to Article III, a separate inquiry from the propriety of their decisions, for federal agencies there is no separation of challenges into ‘jurisdictional’ versus ‘substantive’. Justice Scalia, writing for the 6-3 majority, stated that “the label is an empty distraction because every new application of a broad statutory term can be reframed as a questionable extension of the agency’s jurisdiction.” The FCC’s order was thus affirmed. City of Arlington v. FCC, No. 11-1545. The full opinion is available here.

Legislative Outlook

  • The Senate Communications Subcommittee will hold a hearing titled “State of Wireless Communications” on June 4, 2013, at 2:30 pm Eastern in 253 Russell. For more information, click here.
  • Also on June 4, 2013, the House Subcommittee on Emergency Preparedness, Response, and Communications will hold a hearing titled “Emergency MGMT 2.0: How SocialMedia & New Tech are Transforming Preparedness, Response, & Recovery” at 10:00 am Eastern in 311 Cannon. More information is available here.