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

  • On March 21, 2013, the FCC released the 16th Annual Mobile Competition Report. Like the previous two reports, it makes no formal finding as to whether there is, or is not, effective competition in the wireless industry. The Report presents data on competition throughout the sector and highlights several key trends in the mobile wireless industry. The full report is available here.
  • The next two FCC Open Meetings will be held April 18 and May 9, 2013, at 10:30 am Eastern. We will provide the Agendas as they are released.

Please contact Ross Buntrock, Jon Canis, Alan Fishel, Michael Hazzard, Stephanie Joyce, or Jeffrey Rummel for further information.

The Mobile Market

  • At its March 20 Open Meeting, the FCC adopted a Notice of Proposed Rulemaking focused on improving the reliability of 911 services in the aftermath of natural disasters. The proposed rules stem from findings and recommendations presented in a report from the Public Safety and Homeland Security Bureau titled “Impact of the June 2012 Derecho on Communications Networks and Services: Report and Recommendations”. They would impose new outage reporting requirements and establish regulations regarding central office backup power. Though the rules are primarily targeted towards the Incumbent Local Exchange Carriers that provide the physical connection to the 911 facilities, the FCC asks whether they should be extended to a broader class of carriers, including wireless carriers, many of whom experienced significant network interruption following the derecho weather event. The full NPRM is available here.
  • Reply Comments on the remaining issues in the FCC’s Text-to-911 Further Notice of Proposed Rulemaking are due April 9, 2013. The Federal Register notice on the item is available here.

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

Federal Trade Commission (FTC) and Privacy Regulation

  • The FTC has approved, following a public comment period, a final order settling charges that Epic Marketplace, Inc. used “history sniffing” to secretly and illegally gather data from millions of consumers about their interest in sensitive medical and financial issues ranging from fertility and incontinence to debt relief and personal bankruptcy. Through use of history sniffing Epic was able to determine whether consumers had visited any of more than 54,000 domains. As part of the settlement, Epic and its affiliate Epic Media Group, LLC agreed not to use history sniffing and will delete and destroy all data collected using that technology. Violations of the consent decree may be subject to civil penalties of up to $16,000 per violation. 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.” Technology researchers and other interested parties are invited to recommend topics for discussion and to submit requests to serve as panelists at the forum, which topics and requests should be submitted electronically to mobilethreats@ftc.gov by March 28, 2013. More information regarding the one-day forum is available here.

Please contact Ross Buntrock, Alan Fishel, Stephanie Joyce, or Stephen Thompson for further information.

New Markets: Smart Grid and E-Health

  • The Department of Energy’s Office of Electricity Delivery and Energy Reliability issued a new Funding Opportunity Announcement (FOA) titled “Innovation for Increasing Cybersecurity for Energy Delivery Systems”. The announcement is seeking applications to conduct research, development and demonstrations leading to next-generation tools to accelerate deployment of cybersecurity capabilities for the U.S energy infrastructure, including cyber secure integration of smart grid technologies. Approximately $20 million is expected to be available for awards. Applications are due by April 5, 2013. More information is available here.
  • At the March 20 hearing before the House Commerce Oversight Subcommittee, senior officials from the Food and Drug Administration confirmed that the agency has no plans to regulate the use of smartphones, tablets computers, or mobile app stores like iTunes. “FDA’s proposed mobile medical apps policy would not regulate the sale or general consumer use of smartphones or tablets,” said Christy Foreman, director of the Office of Device Evaluation in the FDA’s Center for Devices and Radiological Health. Ms. Foreman also confirmed that “FDA’s proposed mobile medical app policy would not apply to mobile apps that perform the functionality of an electronic health record (EHR) system or personal health record system.” In her testimony, Ms. Foreman sought to allay fears of intrusive regulation by assuring the Subcommittee that the FDA will focus only on a “small subset of mobile apps.” Video of the hearing and prefiled written testimony are available here.

Developments in Intercarrier Compensation

  • On March 20, 2013, a group of 30 local exchange carriers (LECs) calling themselves the Small Telephone Company Group (STCG) filed a petition with the Missouri Public Service Commission (MPSC) to intervene in the interconnection agreement (ICA) approval proceeding between Embarq Missouri, Inc. d/b/a CenturyLink and 365 Wireless, LLC. STCG alleges that the proposed ICA appears to allow 365 to transit traffic over CenturyLink’s facilities to the STCG LECs without compensation or an approved agreement with the LECs. STCG argues that the ICA could result in a situation similar to the Halo Wireless access-charge avoidance scheme whereby Halo routed non-wireless traffic to small LECs over AT&T’s facilities to make it appear to have originated from wireless customers. STCG seeks “assurances, restrictions, and safeguards on transiting traffic to third parties” on this issue and requests that the MPSC hold a hearing on this issue to address STCG’s concerns. Docket No. TK-2013-0417.

Compliance Notes

  • Companies that provide telecommunications and Voice over Internet Protocol (VoIP) service are reminded that completed FCC Forms 499-A are due April 1, 2013. These forms report annual revenue to the Universal Service Administrative Company (USAC) and the Federal Communications Commission (FCC), as well as other fund administrators. This form must be filed by all interstate telecommunications carriers, interconnected VoIP providers, providers of interstate telecommunications that offer service for a fee on a non-common carrier basis (including stand-alone audio bridging companies), and payphone providers that are aggregators. In addition, non-interconnected VoIP providers are now required to file this form for the assessment of fees to support the Telecommunications Relay System (TRS).

    A copy of the form may be found here. The instructions for completing Form 499-A may be found here.

    The revenues reported on Form 499-A provide the basis for true-up of a company’s Universal Service contributions and serve as the basis for assessing annual fees for the TRS, Local Number Portability (LNP) fund, the North American Numbering Plan Administration fund, and the FCC’s annual fee.

    Companies may submit FCC Form 499-A electronically, if they have registered with USAC. If a company submits its FCC Form 499-A to USAC in hard copy, it must contain an officer’s original signature.
  • Certificates regarding disabled persons’ access to services are due April 1, 2013. Telecommunications carriers, equipment manufacturers, Voice over Internet Protocol (VoIP) providers, including non-interconnected VoIP providers, wireless carriers, and advanced communications service providers are required to file a certificate with the FCC stating that they maintain records of any and all efforts undertaken to ensure their products and services are accessible to those with disabilities. Specifically, companies must maintain records of:< >Their efforts to consult with individuals with disabilities;Descriptions of the accessibility features of its products and services; andInformation about the compatibility of these products and services with peripheral devices or other equipment typically used to gain access to the company’s services, such as hearing aids.here. More information can be found in the Public Notice found here. (DA 13-114)
  • 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 March 22, 2013, the FCC released a paper titled “Significant FCC Actions and Key Developments in the Broadband Economy.” It states, among other things, that $250 million has been invested in broadband facilities since 2009, and that investment in wireless infrastructure has created more than 1.6 million jobs since 2007. The paper highlights the creation of the Connect America Fund and the upcoming incentive auctions. To read the paper, click here.

In the Courts

  • On March 20, 2013, the FCC defended its 2011 Connect America Fund Order from multiple challenges that have been consolidated in the US Court of Appeals for the Tenth Circuit. The FCC rejected arguments that it improperly limited subsidies to incumbent local exchange carriers, adopted rules relating to access stimulation, and imposed its bill-and-keep regime more quickly on local wireless traffic exchanges than it did for other traffic. On the first issue, the FCC argued that it “acted well within its broad discretion,” because “CLECs are not subject to the same level of regulation as ILECs, and thus have more flexibility to adjust their end-user rates and to choose the areas and customer classes they wish to serve.” So, the FCC argued, while ILECs can continue to receive explicit subsidies, CLECs can raise end-user rates or exit those markets. The FCC also noted that providing “CAF subsidies to CLECs would only further burden the limited resources of the CAF.” The FCC also defended itsaccess-stimulation rules as “effective and readily administrable solutions to complex regulatory problems.” Finally, the FCC justified its swifter elimination of intercarrier compensation on non-access wireless traffic by pointing to record evidence that “LECs had no substantial reliance interests with respect to that traffic that would justify a longer transition to bill-and-keep for such traffic.”In re FCC 11-161, No. 11-9900 (10th Cir.).

Legislative Outlook

  • On March 21, 2013, Senator John Thune, R-SD, Ranking Member of the Senate Commerce Committee, issued a statement calling on the FCC to clear more spectrum for non-federal use. He urged “the National Telecommunications and Information Administration and the Obama administration to now concentrate their efforts on reallocating the 1755-1780 MHz band for as much exclusive, non-federal use as is feasible.” To read the full statement, click here.