Telecom Law Monitor : Washington D.C. Telecom Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

Six months after Obama took office, it seems that the FCC is almost, finally ready to get moving.  The Mignon Clyburn (D) and Meredith Baker (R) nominations were approved by the Senate this week.  With these confirmations, we will have the full five-member Commission in place for the August 27 open meeting. 

In addition, Chairman Genachowski continues to designate his Bureau and senior staff.  Yesterday, Genachowski announced two appointments relevant to the scope of this blog.  First, in the Wireline Competition Bureau, Genachowski announced that Sharon Gillett will become Chief of the Bureau.  Ms. Gillett is Director of the Massachusetts Broadband Institute and previously served as head of the Massachusetts equivalent to the FCC and worked as a professor at M.I.T.  The announcement notes her academic work maintained "a particular focus on broadband."  Clearly, at least in the short term, this Commission's number 1 goal (and goals numbered 2, 3 and 4) is going to be broadband deployment.   Ms. Gillett will take office on August 28.

In the Enforcement Bureau, Genachowski announced that Suzanne Tetreault will become Deputy Chief of the Enforcement Bureau.  Ms. Tetreault has served in a variety of positions in the Wireline Competition Bureau, Consumer and Government Affairs Bureau and the Office of General Counsel.  Kris Monteith, the current Bureau Chief, will become Deputy Chief of the Media Bureau, effective August 10.  At that point, Ms. Tetreault will become Acting Chief of the Bureau.  The designation of Ms. Tetreault as an Acting Chief signals that Genachowski intends to fill the Enforcement Bureau Chief slot with a person not currently employed by the Commission.  I would expect that announcement fairly soon.

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As we discussed previously, AT&T has been sending threatening letters to prepaid card providers who offer local telephone numbers as an alternative to 1-800 access.  In our last post, we noted that the parties were far apart in their legal positions and we warned you to "stay tuned" for developments.  That warning proved appropriate, for on July 2, 2009, AT&T brought suit against a prepaid provider for failing to pay access charges on calls originated through local telephone numbers.

AT&T brought its lawsuit in federal district court against IDT Telecom, Inc. and Entrix Telecom, Inc., an affiliate of IDT.  The complaint alleges three counts (violations):  1.  Violation of the AT&T LECs' federal tariffs; 2.  Violation of the AT&T LECs' state tariffs; and 3.  Unjust Enrichment. 

It is noteworthy that AT&T chose not to bring claims against the CLEC(s) that provided the local numbers to IDT.  Instead, AT&T is suing IDT, even though IDT did not receive traffic directly from AT&T.  The lack of a direct relationship will make it harder for AT&T to establish that IDT is a customer under either the federal or state tariffs alleged to be violated. 

Presumably, IDT will move to refer the case to the FCC under the doctrine of primary jurisdiction.  If IDT is successful, the FCC will have to decide what, if any, access charges apply when customers dial local numbers to reach a prepaid card provider.  That question has been before the Commission since 2006, but the FCC has not yet made a decision.

The complaint is available here.

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On July 22, 2009, the Senate Commerce, Science, and Transportation Committee’s Subcommittee on Consumer Protection, Product Safety, and Insurance held a hearing on advertising trends and consumer protection. David Vladeck, Director of the Federal Trade Commission’s Bureau of Consumer Protection testified before the Subcommittee, as well as various industry and consumer advocacy representatives.  The hearing focused primarily on Vladeck’s testimony, in which he outlined the FTC’s proposed revisions to its guidelines for testimonials, endorsements, and green marketing. 

Those speaking on behalf of consumer advocate groups applauded the FTC’s plans to strengthen its advertising guidelines, while industry representatives raised concerns about the burdens imposed by the revisions, specifically those related to the safe harbor provision for atypical result testimonials. Subcommittee members generally agreed with the FTC and consumer advocacy representatives that consumers need more protection from deceptive marketing practices, but they have not reached a consensus on the extent to which the FTC should regulate advertisers. More details on each of these issues are provided in this advisory, authored by Kelley Drye partner Reed Freeman and associate Alysa Z. Hutnik.

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FCC Chairman Genachowski today announced that Austin Schlick will become the next General Counsel of the FCC and that Steven VanRoekel will be its new Managing Director. Mr. Schlick has previously served at the FCC, at the Department of Justice (where he argued seven cases to the Supreme Court), as a legislative assistant to a Senator, in private practice, and he has clerked for the U.S. Supreme Court (Justice O’Connor). Mr. VanRoekel has spent 15 years at Microsoft, including serving as Speech and Strategy Assistant to Bill Gates.

In addition, the Senate Commerce, Science and Transportation Committee has scheduled a hearing for Wednesday, July 15 on the nominations of Mignon Clyburn (D) and Meredith Baker (R) for the remaining two FCC Commissioner slots. The hearing is expected to be non-controversial and, when completed, will put the FCC at full force for the first time this year.

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The Notice of Funds Availability issued jointly by the Rural Utilities Service and the National Telecommunications and Information Administration was published in the Federal Register today. The NOFA is 121 pages long and lists the rules for applying to receive funding in the first round, which will make available up to $4 billion of the total commitment of $7.2 billion in broadband stimulus monies. This represents nearly all the RUS funds ($2.4 billion) and about 1/3 of the NTIA funds ($1.6 billion). The RUS funds are provided under the heading of the Broadband Initiatives Program (BIP) and the NTIA funds are in the Broadband Technology Opportunities Program (BTOP). Applications seeking more than $1 million must be submitted electronically and be filed no later than 5:00 p.m. EDT on August 14, 2009. Paper applications may be filed by applicants seeking less than $1 million (if electronic filing would be a hardship) and by any applicant whose representative is an individual with disabilities. Those applications also must be filed by 5 p.m. EDT on August 14, 2009.

BIP funds from RUS are limited by statute to projects to provide service to areas which are at least 75 percent rural and lack access to sufficient high speed broadband to facilitate economic development. Grants may be obtained to serve exclusively remote, unserved rural areas. Loans will be given for plans to serve non-remote but underserved rural areas. The funds are to be made available in categories: up to $1.2 billion for Last Mile projects (i.e., ones that serve end users); up to $800 million for Middle Mile projects (i.e., ones that do not serve end users directly but instead provide internet backbone and the like); and up to $325 million is available for a “national reserve.” Unused funds will be made available for subsequent rounds of applications.

NTIA has divided its BTOP funds into three categories: Broadband Infrastructure (both Last Mile and Middle Mile), Public Computer Centers, and Sustainable Broadband Adoption. The funds in this first round of applications are to be allocated as follows: up to $1.2 billion for Broadband Infrastructure; up to $50 million for Public Computer Center projects; and up to $150 million for Sustainable Broadband Adoption. 

The complete eligibility criteria and application requirements can be found in the NOFA. However, potential applicants should be aware that all Last Mile projects for either BIP or BTOP must be for service to areas that are either “unserved” or “underserved”. An “unserved” area is composed of census blocks where at least 90 percent of households lack access to facilities-based, terrestrial broadband service, either fixed or mobile, at speeds of 200 kbps upstream and 768 kbps downstream. Obviously, this restriction is extremely limiting to Last Mile projects. Similarly, “underserved” areas are made up of census blocks where (i) no more than 50% of households have access to terrestrial broadband at speeds of 200/768 kbps; or (ii) no provider advertises broadband at speeds of 3 MBps or higher; or (iii) the “take rate” for broadband subscription is 40% or less of total households. Again, the first two of these criteria are extremely limiting in geographical scope, while the third one suffers from a lack of data on which to base a proposal.

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After opening remarks from new Chairman Genachowski and Commissioner Copps, the FCC outlined its schedule and process for the creation of a National Broadband Plan by February 17, 2010, as mandated by Congress. The process will involve all Bureaus within the agency and will start with a series of workshops on 21 topics to be held starting August 12 and ending September 3. The FCC also launched a new website, www.broadband.gov, to make information about the process available to the public. That website will give the list of specific workshop topics and dates. For those interested in participating or monitoring the workshops, the FCC promised to post the names of the staff coordinators by July 16, the final list of topics by July 23, and the list of formal participants by August 5. After the workshops have been completed on September 3, the FCC will accept public comments about matters addressed in the workshops until September 11. Following that hectic schedule, the FCC expects to provide a formal response to the GAO by December 8, 2009, issue its “Section 706” Report by February 3, 2010, and then its final National Broadband Plan by February 17, 2010 (as the statute requires). The agency also indicated that it expects the Broadband Mapping project to be done by February 17, 2010 as well, since the mapping is important to the final Plan.

Click here for the full FCC Commission Meeting - The FCC and Broadband: The Next 230 Days.

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