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 Open Internet Advisory Committee will meet tomorrow, July 9, 2013, at 1:00 pm Eastern. The meeting is open to the public and will be webcast at www.fcc.gov/live. For more information, 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 3:30 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. For more information, click here.
  • The Tentative Agenda for the next FCC Open Meeting on July 19, 2013, contains four items, including a Report and Order regarding Telecommunications Relay Service and a Notice of Proposed Rulemaking proposing to update the E-Rate Program for high-speed broadband service. To read the full Tentative Agenda, click here.

The Mobile Market

  • The FCC approved the Softbank-Sprint-Clearwire transaction on July 5, 2013, with minimal conditions. It found that the transactions will not result in competitive harm or otherwise impair the public interest. It also found that the degree of indirect foreign ownership of Sprint, through Softbank, will not violate the Communications Act. To read the full order and the separate statements of the Acting Chairwoman and two Commissioners, click here.
  • The FCC Notice of Proposed Rulemaking on contraband cellphones in prisons has been published in the Federal Register. Comments are due July 18, 2013, and Reply Comments are due August 2, 2013. 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.” 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 FTC’s Online Privacy Protection Act (COPPA) rule took effect on July 1, 2013. The revised COPPA rule addresses changes in the way children use and access the Internet, including the increased use of mobile devices and social networking. The modified rule, approved by the Commission in December 2012, widens the definition of children’s personal information to include persistent identifiers such as cookies that track a child’s activity online, as well as geolocation information, photos, videos, and audio recordings. The FTC has also released “The Children’s Online Privacy Protection Rule: A Six-Step Compliance Plan for Your Business” to assist businesses that operate child-directed websites, mobile applications, and plug-ins. This document contains a step-by-step process for companies to determine whether they are covered by COPPA, and what steps they are required to take to protect children’s privacy. The FTC also released a video to help explain these obligations under the revised rule. More information regarding the FTC’s revised COPPA Rule is available here.
  • 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

  • FCC Commissioner Jessica Rosenworcel recently spoke at the American Telemedicine Association Federal Policy Summit held in Washington, DC. She described initiatives underway at the FCC to improve telemedicine and mhealth, but also noted that, “We can strive to do great things with telemedicine, but we will cut its promise short if it is fenced in by state borders and old rules premised on local paperwork.” The Commissioner expressed concerns that state-specific licensing, malpractice insurance, and reimbursement policies present significant obstacles to the adoption of many promising telemedicine technologies. She encouraged the group to explore changes that would allow doctors to practice more easily in multiple jurisdictions. Her full comments are available here.

Compliance Notes

  • Form 499-Q is due August 1, 2013, for all filers that are not considered de minimis for Universal Service filing purposes. This filing encompasses historical revenues from the second quarter of 2013 and projected revenues for the fourth 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 August 1, 2013, to the Universal Service Administrative Company (USAC) and the Chief, Industry Analysis and Technology Division of the FCC.

  • Providers of international common carrier services are required to file their International Traffic Data report for 2012 by July 31, 2013, as required by Section 43.61 of the Commission’s Rules. There is a change in filing protocols for resellers of telecommunications services, providers of miscellaneous telecommunications services, and providers with less than $5 million in international revenue. These providers may report their information via transmittal letter, as outlined in Public Notice issued by the FCC, found here.

All other carriers are required to file complete reports pursuant to the current filing manual which can be found here. A copy of the billing codes for switched services settlement arrangements can be found here. (DA-13-1436).

  • 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. A copy of the Public Notice announcing the rate can be found here. (DA 13-1361)

Broadband News

  • As reported above in FCC Announcements, the FCC will vote a Notice of Proposed Rulemaking at its upcoming July 19 Open Meeting to address modernizing the E-Rate Program to increase access to high-speed broadband and digital learning technologies for schools and libraries. The item is described here.

In the Courts

  • On July 3, 2013, the U.S. District Court for the Eastern District of California ordered the plaintiff to file an amended complaint or abandon her Telephone Consumer Protection Act (TCPA) claim against Nationstar Mortgage. The plaintiff alleged that “[b]etween May 22, 2012 and July 17, 2012, Nationstar placed a total of 42 telephone collection calls to Plaintiff's home telephone. Of these, 37 were placed by an automated dialer, and 31 left a voice or prerecorded message to call a number to discuss an important matter,” and that 20 of those 42 calls came after she sent Nationstar a letter disputing its practice of making collection calls to her. Although the court agreed that she alleged a viable claim under the Fair Debt Collection Practices Act, it found that her TCPA claim fell short. First, she did not allege that the calls made using an automated telephone dialing system were sent to a telecommunications “service for which the called party is charged for the call.” Second, the prerecorded-voice prong of the TCPA claim failed, because the calls at issue are exempt from TCPA as “made for a commercial purpose but [which] does not include or introduce an unsolicited advertisement or constitute a telephone solicitation.” The plaintiff may attempt to cure the defect in her complaint concerning whether she was charged for the calls, but the court found the latter defect incurable. Moriarity v. Nationstar Mortg., LLC, No. 1:13-cv-00855-AWI-SMS (E.D. Cal. July 3, 2013).

Legislative Outlook

  • The Senate Subcommittee on Consumer Protection, Product Safety and Insurance will hold a hearing titled “Stopping Fraudulent Robocall Scams: Can More Be Done?” on July 10, 2013, at 10:00 am Eastern in 253 Russell. More information is available here.
  • The House Communications Subcommittee will hold a hearing titled “Improving FCC Process” on July 11, 2013, at 10:30 am Eastern in 2123 Rayburn. For more information, click here.