United States: Telecom Deadlines & Headlines - May 27, 2014

Arent Fox's Telecom Deadlines & Headlines brings you the most recent legal developments affecting the telecommunications industry.

This Telecom Deadlines & Headlines reminds you of upcoming events at the FTC on mobile security and FCC on 911 reliability and inmate calling services reform, highlights upcoming industry events, and recaps recent judicial action on SMS price-fixing and TCPA issues.

KEY REGULATORY DATES

Mobile Security Comments Due to FTC by May 30, 2014

  • The Federal Trade Commission (FTC) recently issued a request for public comments to further explore issues raised by last year's FTC forum examining the state of mobile security. Any interested parties should file comments by May 30, 2014. The FTC is seeking comments on four aspects of mobile security: (1) secure platform design; (2) secure distribution channels; (3) secure development practices; and (4) security lifecycle and updates. In addition to the FTC's efforts to investigate mobile security and the use of consumer information through mobile channels, the Obama Administration has set up a privacy working group that includes the Department of Commerce, among other agencies, that is poised to propose federal legislation related to the Consumer Privacy Bill of Rights issued by the President in 2012, available here.

FCC 911 Reliability Workshop, June 2, 2014

  • On June 2, 2014, the FCC will hold a workshop on the process for submitting annual certifications regarding a covered entity's compliance with the Commission's 911 reliability rules. Under these rules, covered entities are required to annually certify whether they are in compliance with specified best practices, or their reasonable alternatives, to mitigate risk of 911 failure in three areas: (1) backup power for central offices that directly serve a Public Safety Answering Point (PSAP); (2) critical 911 circuit diversity, and (3) diverse network monitoring. Covered entities include those who provide 911, E911, or NG911 capabilities and those that provide services directly to PSAPs.

    This workshop will include a presentation from Homeland Security Bureau Staff on the proposed development of a certification process, including a question-and-answer session with attendees. The pre-registration deadline is May 27, 2014, and the FCC has set up a webpage for pre-registrations, which can be found here. More information can be found in the Public Notice announcing the workshop here. (DA 14-582)

2Q2014 USF Contribution Factor is 16.6%

  • The Universal Service contribution factor for the second quarter of 2014 is 16.6%. A copy of the Public Notice announcing the rate can be found here. (DA 14-377)

KEY INDUSTRY EVENTS

Computers, Freedom, and Privacy Conference, June 8–10, 2014

  • For more information on the CFP 2014 event at the Airlie in Warrenton, VA, at which Arent Fox Partner Stephanie Joyce will be speaking on the Net Neutrality panel, click here.

FCC Open Commission Meeting, June 13, 2014, 10:30 AM

  • For more information on the FCC's next open meeting, which will include an update on the efforts to transition circuit-switched networks to Internet Protocol (IP) networks, as well as the tentative agenda, click here.

BIG Telecom Event, Chicago, June 17–18, 2014

  • For more information on this event, styled as Next-Gen Tech Meets Business Logic, click here.

NEWS ROUNDUP

Wireless Carriers Duck Antitrust Suit on SMS Price-Fixing

  • On May 19, 2014, the U.S. District Court for the Northern District of Illinois granted summary judgment to AT&T, Sprint, T-Mobile, Verizon Wireless, and the CTIA in a class action against them for antitrust violations. The plaintiffs had claimed that the four carriers and the CTIA had conspired to fix the prices of pay-per-use text messages in violation of the Sherman Act. The plaintiffs claimed that between 2005 and 2008, the defendants agreed to coordinate price increases for these messages, ultimately raising the prices in concert from ten cents to twenty cents a message. The District Court found that the plaintiffs had provided no evidence supporting a finding of concerted behavior on the part of the defendants, noting that it is not enough to prove conduct that is also consistent with permissible competition. According to the court, even the plaintiffs' alleged "smoking gun" piece of evidence – a single e-mail in which a T-Mobile employee who was not directly involved with two of the three price increases referred to the price increases as "collusive" – required too many leaps of logic in order to support a price-fixing conspiracy. Even when all of the plaintiffs' evidence of collusion was viewed in the aggregate, it did not demonstrate that the defendants did anything more than permissibly increase their prices following their own internal discussions and studies, while sometimes interacting with each other at places such as trade events. In re Text Messaging Antitrust Litig., MDL 1997, 2014 WL 2106727 (N.D. Ill. May 19, 2014).

TCPA Plaintiff Ordered to Arbitrate His Claims

  • Recently, a federal court compelled arbitration of a Telephone Consumer Protection Act (TCPA) claim based on the plaintiff's contract with his loan company. In reaching its decision, the U.S. District Court for the Eastern District of California distinguished the case from two other district court decisions that held that TCPA claims fall outside the scope of contractual arbitration clauses. The contract stated in relevant part:

    You agree that you will accept calls, SMS text messages, emails, and other electronic communications from us regarding your loan application, your loan payments, the collection of your loan account, promotions and other important communications. You understand these calls could be automatically dialed and a recorded message may be played. You agree that we may leave a voicemail message on your mobile phone or send you a SMS text message to your mobile phone, which may include information about the delinquency of your account.

    The arbitration clause also stated that "any and all claims, controversies, or disputes arising out of or related in any way to" the loan contract were subject to arbitration. The plaintiff argued, however, that calls sent to him to collect on his debt had nothing to do with the debt itself, only the manner in which the debt was collected, and therefore fell outside the scope of the arbitration clause. The court rejected the plaintiff's argument and held that the TCPA claim was unquestionably related to the plaintiff's contract with the loan company and were within the scope of the arbitration provision in this case. Delgado v. Progress Financial Company, CIV No. 14-0033 (E.D. Cal. May 1, 2014).

FCC to Hold Workshop on Inmate Calling Services on July 9, 2014

  • The FCC has announced that it will hold a workshop on Wednesday, July 9, 2014, to gather information concerning state efforts to reform inmate calling services (ICS), the cost characteristics of providing services to different correctional facilities, as well as the use of non-traditional communications technologies in prisons. The workshop follows the September 26, 2013 adoption of interim rules for interstate ICS in Rates for Interstate Inmate Calling Services, WC Docket No. 12-375, which was mostly stayed by the D.C. Circuit Court of Appeals pending the resolution of a challenge to those rules. The workshop will be held in the Commission Meeting Room (TW-C305), 445 12th Street, SW, Washington, DC 20554. Details concerning the agenda and panelists have not yet been announced. The workshop will be free and open to the public, and will also be streamed live here.

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