Thursday, August 15, 2013

Two TLP Attorneys Named to 2014 Best Lawyers® in America List

Telecommunications Law Professionals is pleased to announce that two lawyers have been named to the 2014 Edition of Best Lawyers, the oldest and most respected peer-review publication in the legal profession.

Best Lawyers has published their list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 65 countries.

“Best Lawyers is the most effective tool in identifying critical legal expertise,” said President and Co-Founder Steven Naifeh.  “Inclusion on this list shows that an attorney is respected by his or her peers for professional success.”

Lawyers on the Best Lawyers in America list are divided by geographic region and practice areas. They are reviewed by their peers on the basis of professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.

TLP would like to congratulate the following attorneys named to the 2014 Best Lawyers in America list:

Carl W. Northrop, Communications Law and Corporate Law
Michael Lazarus, Communications Law

Tuesday, July 16, 2013

House Hearing to Examine Whether Federal Legislation Requiring the Reporting of Data Breaches is Needed to Protect Consumers

The House Energy and Commerce Committee's Subcommittee on Commerce, Manufacturing, and Trade, which is chaired by Rep. Lee Terry (R-NE), will hold a hearing entitled "Reporting Data Breaches: Is Federal Legislation Needed to Protect Consumers?" on Thursday, July 18, 2013, at 10:00 a.m. EST.

For nearly a decade, Congress has been unable to reach a consensus on Federal data breach notification legislation despite much legislative activity. However, since states such as California and New York have had state data breach notification laws on the books for years, most businesses that serve consumers in those states have already adopted nationwide company policies based on compliance with the strictest of the state laws. Accordingly, any Federal legislative solution will likely need to preempt the state laws and provide a reasonable reduction in the current regulatory compliance costs in order to appeal to business interests.
The live webcast of the hearing will be available here.

If you have any questions regarding this hearing or privacy and data-security regulatory or legislative issues, please feel free to contact the TLP team.


Thursday, July 11, 2013

Senate Commerce Committee Chairman Rockefeller to Hold Hearing on Expanding the E-Rate Program

The Senate Committee on Commerce, Science and Transportation, which is chaired by Senator Rockefeller (D-WV), has announced that the Committee will hold a hearing entitled “E-Rate 2.0: Connecting Every Child to the Transformative Power of Technology,” on Wednesday, July 17, 2013 at 2:30 p.m. EST.

The hearing will focus on "strengthening E-Rate and expanding access to the latest digital technology and learning tools" to schools and libraries. Senator Rockefeller and former Senator Snowe (R-ME) were largely responsible for the creation of the E-rate program, which is part of the Universal Service Fund.  Recently, President Obama and FCC Commissioner Rosenworcel "have called for 100 Mbps speeds to schools by 2015, and 1 gig by the end of the decade." The FCC will consider a Notice of Proposed Rulemaking at the Commission's July 19, 2013, open meeting to modernize the E-rate program to support high-speed broadband for digital learning technologies.

The official witness list for the hearing is not yet available. The live webcast of the hearing will be available here.

If you have any questions regarding this hearing, the E-rate program, the Universal Service Fund or any other activity in Congress or at the FCC that could impact the telecommunications, media and technology sectors, please contact any member of the TLP team.


Senate Commerce Committee Leaders Circulate Draft of Compromise Cybersecurity Legislation

Senate Commerce Committee Chairman Rockefeller (D-WV) and Ranking Member Thune (R-ND) have been working on a draft compromise cybersecurity bill in an attempt to break the long stalemate in the Senate on the issue and try to find legislation that can finally garner the votes need to needed pass a bill in the Senate.  A copy of the compromise draft bill is here. The "draft bill would task the National Institute of Standards and Technology (NIST), a Commerce Department agency, with developing voluntary cybersecurity standards and best practices for critical infrastructure," and would seek to "improve cybersecurity research, education and public awareness."  Apparently, Chairman Rockefeller would like the Senate Commerce Committee to markup the compromise legislation before the end of July.

In April 2013, the House approved H.R. 624, the "Cyber Intelligence Sharing and Protection Act (CISPA)," by a bipartisan vote of 288 to 127. And, the President issued his Executive Order on cybersecurity during his State of the Union speech in February 2013.

TLP has helped clients with various issues related to cybersecurity, including preparing a client to testify before the House Energy and Commerce Committee on the subject of cybersecurity and communications networks. If you have any questions regarding the Executive Order or any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact any member of the TLP team.

Wednesday, July 10, 2013

FCC Broadcast Incentive Auction: Congressional Oversight Hearing on July 23

The House Energy and Commerce Committee's Communications and Technology Subcommittee -- which has authority over the Federal Communications Commission and drafted the auction related provisions enacted by Congress in the Spectrum Act in January 2012 -- will hold an oversight hearing on issues related to the broadcast incentive auction provisions of the Spectrum Act. The hearing is entitled "Oversight of Incentive Auction Implementation" will take place on Tuesday, July 23, 2013, at 10:30 a.m. EST.

 
Among other things, the hearing may examine whether the FCC's implementation of the Spectrum Act's provisions will serve to make television broadcasters more or less likely to participate in the voluntary auction process, if the FCC can and should adopt auction rule proposals that would benefit certain large wireless carriers with smaller market shares over the two carriers with the most customers, how much unlicensed spectrum will be available in the proposed guard guards and whether it should be auctioned, and why the Commission subsequently proposed an alternative band plan after it appeared that broad consensus had been achieved for a specific band plan.

Appearing before the Subcommittee members at the hearing will be Gary Epstein of the FCC's Incentive Auction Task Force, Preston Padden of the Expanding Opportunities for Broadcasters Coalition, Joan Marsh of AT&T, Harold Feld of Public Knowledge, Rick Kaplan of the National Association of Broadcasters and Kathleen Ham of T-Mobile US.
 
The live webcast of the hearing will be available here.

If you have any questions regarding this hearing, the FCC's implementation of the Spectrum Act or any other activity in Congress that could impact the telecommunications, media and technology sectors, please contact any member of the TLP team.


Tuesday, July 9, 2013

Senate Commerce Committee To Examine Fraudulent Robocalls

The Senate Commerce Committee's Subcommittee on Consumer Protection, Product Safety and Insurance will be holding a hearing entitled "Stopping Fraudulent Robocall Scams: Can More Be Done?"  on Wednesday, July 10, 2013 at 10:00 a.m. EST.  According to the Committee, the hearing "will examine the consumer harm associated with fraudulent robocalls; the effectiveness of regulations and law enforcement in stopping these calls; and the feasibility of technological solutions aimed at preventing fraudulent robocalls from reaching vulnerable consumers."

Appearing before the Subcommittee will be Lois Greisman of the Federal Trade Commission, Eric Bash of the Federal Communications Commission, Kevin G. Rupy of the United States Telecom Association, Michael F. Altschul of CTIA - The Wireless Association, Matthew Stein of Primus Telecommunications Inc. and Aaron Foss of Nomorobo.

The hearing will be webcast live here.

If you have any questions regarding this hearing or any other activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any other member of the TLP team.



 

 

FCC Approves Sprint-SoftBank Transaction

The FCC unanimously voted to approve the Sprint-SoftBank transaction in which SoftBank would acquire Sprint and Sprint would acquire 100 percent of Clearwire’s stock.  The Commission analyzed the potential public interest harms, public interest benefits, and the foreign ownership impact of the transaction. 

Regarding the public interest harm of consolidation, the FCC decided not to modify the spectrum screen in the transaction review proceeding to include more than 55.5 MHz of the 2.5 GHz band, and it found that the transaction would not cause the companies to exceed the spectrum screen in any market.  However, the Commission did condition its approval of the transactions on post-transaction Sprint and SoftBank assuming all of Sprint’s obligations to reconfigure the 800 MHz band, a condition that DISH requested.  The Commission declined to condition the transaction on compliance with the FCC’s open Internet rules because such a condition would “only serve to require entities to comply with legal obligations that are already in effect and fully enforceable.” 

Regarding public interest benefits, the Commission found that approving the transactions will serve the public interest by accelerating the deployment of LTE and advanced mobile broadband services and enhancing competition in the mobile wireless market.  Finally, the Commission found that SoftBank’s indirect foreign ownership of Sprint complies with the Communications Act, and it did not find any public interest harms due to national security concerns. 

If you have any questions regarding the above transaction, please feel free to contact the TLP team.

Monday, July 8, 2013

House Begins to Move H.R. 2122, the Regulatory Accountability Act of 2013

Tomorrow, the House Judiciary Committee's Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold a hearing on H.R. 2122, the "Regulatory Accountability Act of 2013," at 10:00 a.m. EST.  H.R. 2122 was introduced by House Judiciary Committee Chairman Goodlatte (R-VA).

Testifying at the legislative hearing will be Jeffrey A. Rosen of Kirkland & Ellis LLP, Keith Hall of the Mercatus Center at George Mason University, Diana Thomas of the Huntsman School of Business, Robert A. Sells of Titan America Mid-Atlantic Business Division, David Goldston of the Natural Resources Defense Council and Ronald M. Levin of the Washington University School of Law.


Bipartisan legislation similar to H.R. 2122 was introduced during the last Congress in both the House and the Senate by Reps. Smith (R-TX), Coble (R-NC) and Peterson (D-MN) as well as Senators Portman (R-OH) and Pryor (D-AK), the current chair of the Senate Communications Subcommittee.  And, that legislation was approved -- despite a veto threat by the White House -- in the House in December 2011 by a vote of 253 to 167, but it subsequently stalled in the Senate without further action.

According to the Congressional Research Service, H.R. 2122 would:
  • Amend the Administrative Procedure Act to revise and expand the requirements for federal agency rulemaking by requiring agencies, in making a rule, to base all preliminary and final factual determinations on evidence and to consider the legal authority under which the rule may be proposed, the specific nature and significance of the problem the agency may address with the rule, any reasonable alternatives for the rule, and the potential costs and benefits associated with such alternatives.

  • Require agencies to publish advance notice of proposed rulemaking for major rules and for high-impact rules (rules having an annual cost on the economy of $100 million or $1 billion or more, respectively) and for rules that involve a novel legal or policy issue arising out of statutory mandates, which shall include a written statement identifying the nature and significance of the problem the agency may address with a rule, the legal authority under which the rule may be proposed, the nature of and potential reasons to adopt a novel legal or policy position, and a solicitation for written data, views, or arguments from interested persons.

  • Set forth criteria for issuing major guidance (agency guidance that is likely to lead to an annual cost on the economy of $100 million or more, a major increase in cost or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or ability to compete) or guidance that involves a novel legal or policy issue arising out of statutory mandates.

  • Expand the scope of judicial review of agency rulemaking by allowing immediate review of rulemaking not in compliance with notice requirements and establishing a substantial evidence standard for affirming agency rulemaking decisions.

If you have any questions regarding this legislative hearing or any other activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any other member of the TLP team.

Friday, July 5, 2013

House Set to Pass FCC Process Reform Legislation Again; First Legislative Hearing on July 11

The House Energy and Commerce Committee's Subcommittee on Communications and Technology, chaired by Rep. Walden (R-OR), has announced that it will hold a hearing entitled ""Improving FCC Process" on Thursday, July 11, 2013, at 10:30 a.m. EST.

The following witnesses will appear before the Subcommittee: Stuart M. Benjamin of Duke Law School; Larry Downe, the author of The FCC's Unstructured Role in Transaction Reviews; Robert M. McDowell, a former FCC Commissioner and Visiting Fellow at the Hudson Institute; Randolph J. May of the Free State Foundation; Richard J. Pierce Jr. of the George Washington University Law School and James Bradford Ramsay of the National Association of Regulatory Utility Commissioners.
 
During the 112th Congress, the full House passed H.R. 3309, the FCC Process Reform Act, and H.R. 3310, the FCC Consolidated Reporting Act, and the Subcommittee will "review discussion drafts similar to the legislation approved last Congress" at the July 11 hearing.

The hearing will be webcast live here, and the majority Committee staff's background memorandum for the hearing is available here. The Democratic staff's briefing memoradum for the hearing is available here. Copies of the new discussion drafts of the FCC Process Reform Act of 2013 and the FCC Consolidated Reporting Act of 2013 are available here and here

One notable change from last year's legislation is that the full Commission would be able to review items delegated to the FCC's bureaus before adoption, and bureau items will require a Commission level vote if two or more of the Commissioners request such a vote. Given that the FCC's authority stems from Congress, such a requirement will restore some accountability at the FCC by forcing the Senate-confirmed Commissioners to make the important decisions rather than allowing the Chairman and his appointed bureau chiefs to circumvent the democratic process. 

If you have any questions regarding this legislative hearing or any other activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any other member of the TLP team.
 
 

Tuesday, July 2, 2013

Congress to Examine Cyber Espionage and the Theft of U.S. Intellectual Property and Technology

The House Energy and Commerce Committee's Subcommittee on Oversight and Investigations, which is chaired by Rep. Murphy (R-PA), will hold a hearing entitled "Cyber Espionage and the Theft of U.S. Intellectual Property and Technology" on Tuesday, July 9, 2013, at 10:15 a.m. EST.  The hearing will continue the Committee's focus on "cyber threats and security solutions" by "examining the scope and nature of threats from cyber espionage to U.S. intellectual property and technology," and Subcommittee members will "review proposed policy solutions to better protect U.S. intellectual property and technology from cyber threats emanating from state actors, including best practices, enhanced information sharing, and public-private partnerships."

Appearing as witnesses at the hearing will be former Senator Slade Gorton of the Commission on the Theft of American Intellectual Property, Larry M. Wortzel of the U.S.- China Economic and Security Review Commission, James A. Lewis of the Center for Strategic and International Studies and Susan Offutt of the Government Accountability Office.

The hearing will be webcast live here, and the Committee's background memorandum for the hearing is available here.

During May 2013, the House Energy and Commerce Committee and its Subcommittee on Communications and Technology held hearings entitled "Cyber Threats and Security Solutions," focusing on the President's Executive Order, and "Cybersecurity: An Examination of the Communications Supply Chain," respectively.  House Communications and Technology Subcommittee Chairman Walden (R-OR) and Ranking Member Eshoo (D-CA) have also established a bipartisan working group to closely study the of issue communications network supply chain cybersecurity and determine the appropriate policy responses.

In April 2013, the House approved H.R. 624, the "Cyber Intelligence Sharing and Protection Act (CISPA)," by a bipartisan vote of 288 to 127.  The full Senate has yet to consider any cybersecurity legislation during this Congress.

TLP has helped clients with issues related to cybersecurity, including preparing a client to testify before the House Energy and Commerce Committee on the subject of cybersecurity and communications networks. If you have any questions regarding this hearing, the Executive Order or any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.

CTIA Petition for Recon. on Text-to-911

CTIA filed a Petition for Reconsideration or Clarification of the FCC’s text-to-911 rule to the extent that it imposes roaming obligations.  Specifically, paragraph 72 of the Text-to-911 Report and Order (“R&O”) requires carriers to “make automatic bounce-back messages available to consumers roaming on their network to the same extent they provide such messages to their own subscribers.”  CTIA asserts that the roaming requirement should be eliminated because it is technically infeasible.  Alternatively, CTIA requests that the FCC only require the home carrier, and not the serving carrier, to provide bounce-back messages to its customers.

CTIA explains that SMS messages that are sent while a customer is roaming are “routed to a subscriber’s home network for processing, regardless of the network from which the message originated.”  CTIA concludes, therefore, that serving carriers do not have the technical capability to provide a bounce-back message because they are not responsible for transmitting the customer’s initial message to 911.  CTIA points out that a roaming requirement was excluded from the voluntary text-to-911 agreement because of this infeasibility.  CTIA seeks to allay FCC concerns that roaming customers will not receive a bounce back message if the rule is eliminated by explaining that, in practice, home carriers will always be required to send a bounce-back message to its roaming customers.  This duty arises because SMS messages that are sent between carriers do not automatically include location information, so the home carrier will never be able to deliver the roaming customer’s text message to the appropriate PSAP.  To comply with the bounce-back rule, therefore, the home carrier will always send a bounce-back message to its roaming customers.  If the FCC refuses to eliminate the roaming requirement, then CTIA asks the Commission to clarify that Section 20.18(n)(7) of the rule applies only to home network operators because “only the home carrier has the capability to generate the required bounce-back message.” 

Please feel free to contact us with any questions regarding the proceeding.

Friday, June 28, 2013

July Open Meeting Agenda

The FCC released the tentative agenda for its Open Meeting on July 19.  The Commission will consider:

  • The 15th Annual Video Competition Report;
  • A Report and Order addressing mandatory minimum standards for the Speech-to-Speech Relay program and a Further Notice of Proposed Rulemaking seeking input on ways to improve the program; and
  • A Notice of Proposed Rulemaking to modernize the E-Rate Program for Schools and Libraries.

The Commission will also hear an update on the implementation of the Twenty-First Century Communications and Video Accessibility Act.

The meeting is scheduled to begin at 10:30 AM, and it will be broadcast live at www.FCC.gov/live.
 
Please feel free to contact us with any questions.

Thursday, June 27, 2013

FCC Acts on CPNI and H Block Rules

At today’s Open Commission Meeting, the FCC adopted a Declaratory Ruling regarding its customer proprietary network information (“CPNI”) rules and a Report and Order (“R&O”) that sets out licensing, service, and technical rules for the H Block. 

The CPNI Declaratory Ruling clarifies that the Commission’s CPNI rules apply to information that wireless carriers collect via their control over customers’ mobile devices, even when that information is only stored on the devices.  As long as carriers can access or control the information, they are responsible for safeguarding it.  The Ruling also states that the FCC will use its enforcement authority against carriers that violate the CPNI rules.  At the meeting, Commissioner Rosenworcel expressed concern that consumers do not understand how or when their information is accessed by carriers or by third parties, and she called on the FCC to work with the FTC to educate consumers.  Commissioner Pai emphasized that carriers are not subject to the FCC’s CPNI rules if they are not responsible for collecting the information, and he said that the Ruling does not hold carriers liable for their compliance with voluntary codes of conduct.  For an additional reference, the FCC News Release announcing the action is available here

At the meeting, the Commissioners also adopted a R&O that establishes rules for the H Block.  The rules enable 10 MHz of paired H Block spectrum to be auctioned through competitive bidding for mobile broadband use.  The spectrum will be auctioned on an Economic Area basis, and the R&O sets power and emissions limits and announces licensee performance requirements.  Commissioner Rosenworcel commented that the H Block revenue will generate significant funding for FirstNet, and she expressed satisfaction that H Block interference concerns have been resolved.  Commissioner Pai expressed hope that the Commission will auction the H Block by the end of 2013 or early in 2014, and he said that it should serve as a model for future auctions.  Chairwoman Clyburn was satisfied that the H Block will be used for mobile broadband while protecting operations in neighboring bands. 
 
Please feel free to contact us with any questions regarding today's meeting.

Thursday, June 20, 2013

House Hearing on Federal Spectrum Clearing Incentives Set for June 27

In light of the spectrum crunch that is still facing most U.S. mobile service providers and their customers, the House Energy and Commerce Committee's Subcommittee on Communications and Technology is continuing to push for the reallocation of Federal spectrum for commercial broadband use, especially in the 1755-1850 MHz band and the 1755-1780 MHz subband.

On Thursday, June 27, 2013, at 10:30 a.m. EST, the Subcommittee will hold a hearing entitled "Equipping Carriers and Agencies in the Wireless Era" to continue to explore "mutually beneficial methods to help agencies fulfill their missions while freeing spectrum to drive our country's prosperity."  Federal spectrum incentive legislation to require the Administration and Federal agencies to clear some of its spectrum for auction could be included in a legislative package that may need to be enacted by Congress in order to raise the debt ceiling later this year.  Of course, budget-constrained Federal departments and agencies may be willing cut a deal if giving up some spectrum is an alternative to larger spending cuts.

While an official witness list for the hearing has not yet been released, representatives from NTIA, the Department of Defense, CTIA and Qualcomm are likely to provide testimony to the Subcommittee members.  The live webcast of the hearing will be available here.

If you have any questions regarding this House hearing on potential legislation to incentivize efficient spectrum use and clearing by Federal agencies, or any other activity that could impact the telecommunications, media and technology sectors, please contact the TLP team.

Tuesday, June 11, 2013

Senate Hearing on Tom Wheeler's Nomination for FCC Chairman to be Held June 18

Today, the Senate Committee on Commerce, Science, and Transportation announced that it will hold its hearing on the nomination of Mr. Thomas Wheeler to be the Chairman of the Federal Communications Commission. The hearing is scheduled for Tuesday, June 18, 2013, at 2:30 p.m. EST and will be webcast live here. Mr. Wheeler's prepared testimony is available here.

President Obama announced his intention to nominate Mr. Wheeler back on May 1, 2013. It is expected that Mr. Wheeler's nomination will need to be paired with the yet-to-be-announced nominee for the vacant Republican seat in order to be confirmed on the Senate floor. However, it appears that Senate Democratic leaders and the White House would like the Senate to confirm Mr. Wheeler before the July 4th recess so that he may join the FCC just as the new five-year term associated with his seat commences on July 1, 2013.

If you have any questions how these changes at the Federal Communications Commission may impact the telecommunications, media and technology sectors, please contact the TLP team.


Wednesday, June 5, 2013

House to Examine Whether Congress Should Repeal, Reauthorize or Revise the Satellite Television Law

The House Energy and Commerce Committee's Subcommittee on Communications and Technology will hold a hearing on Wednesday, June 12, 2013, at 10:00 a.m. EST, entitled “The Satellite Television Law: Repeal, Reauthorize, or Revise?” 

The hearing is the continuation of a series of hearings in the House and the Senate to that have been held to consider the satellite television law (Satellite Television Extension and Localism Act of 2010 (STELA)), which will sunset on December 31, 2014. According to the Committee, the hearing "will examine whether the law, which Congress first passed in 1988, still serves an important function or if it is out of step with today’s video marketplace," and "members will discuss whether Congress should repeal the law, reauthorize it as is, or revise it, possibly even tackling non-satellite specific video issues arising from increased competition and evolving technology." The Majority Committee staff's background memorandum for the hearing is available here.

The following witnesses have been invited to appear at the hearing: Marci Burdick of Schurz Communications, Inc.; Geoffrey Manne of TechFreedom; Mike Palkovic of DIRECTV; Ben Pyne of Disney Media Networks; Hal Singer of Navigant Economics and Amy Tykeson of Bend Broadband.

The live webcast of the hearing will be available here.

If you have any questions regarding this hearing as well as any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.

Tuesday, June 4, 2013

White House Releases Its Legislative Priorities and Executive Actions to Address Patent Trolls

After months of legislative activity and consideration in Congress on how to best address harmful patent litigation abuses, the White House today released its suggested legislative priorities and executive actions on the issue. See the White House fact sheet below.

In addition, House Judiciary Committee Chairman Goodlatte (R-VA) released to the public a copy of the his discussion draft of patent troll legislation.

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LEGISLATIVE PRIORITIES & EXECUTIVE ACTIONS

Today the White House announced major steps to improve incentives for future innovation in high tech patents, a key driver of economic growth and good paying American jobs.  The White House issued five executive actions and seven legislative recommendations designed to protect innovators from frivolous litigation and ensure the highest-quality patents in our system.  Additionally, the National Economic Council and the Council of Economic Advisers released a report, Patent Assertion and U.S. Innovation, detailing the challenges posed and necessity for bold legislative action.

In 2011, the President signed the Leahy-Smith America Invents Act (AIA), a landmark piece of legislation designed to help make our patent system more efficient and reliable.  As technology evolves more rapidly than ever, we must ensure our patent system keeps pace.  As President Obama said in February, “our efforts at patent reform only went about halfway to where we need to go.  What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.”

The AIA put in place new mechanisms for post-grant review of patents and other reforms to boost patent quality.  Meanwhile, court decisions clarifying the scope of patentability and guidelines implementing these decisions diminish the opportunity to game the patent and litigation systems.  Nevertheless, innovators continue to face challenges from Patent Assertion Entities (PAEs), companies that, in the President’s words “don’t actually produce anything themselves,” and instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”  These entities are commonly known as “patent trolls.”  Likewise, the so-called “Smartphone Patent Wars” have ballooned in recent years and today, several major companies spend more on patent litigation and defensive acquisition than on research and development.

Stopping this drain on the American economy will require swift legislative action, and we are encouraged by the attention the issue is receiving in recent weeks.  We stand ready to work with Congress on these issues crucial to our economy, American jobs, and innovation.  While no single law or policy can address all these issues, much can and should be done to increase clarity and level the playing field for innovators.

LEGISLATIVE RECOMMENDATIONS

In that spirit, the Administration recommends that Congress pursue at least seven legislative measures that would have immediate effect on some major problems innovators face.  These measures would:

  1. Require patentees and applicants to disclose the “Real Party-in-Interest,” by requiring that any party sending demand letters, filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance.
  2. Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases).
  3. Expand the PTO’s transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).
  4. Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use.  Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer.
  5. Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.
  6. Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.
  7. Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.

EXECUTIVE ACTIONS

Today the Administration is also announcing a number of steps it is taking to help bring about greater transparency to the patent system and level the playing field for innovators.  Those steps include:

  1. Making “Real Party-in-Interest” the New Default.  Patent trolls often set up shell companies to hide their activities and enable their abusive litigation and extraction of settlements.  This tactic prevents those facing litigation from knowing the full extent of the patents that their adversaries hold when negotiating settlements, or even knowing connections between multiple trolls.  Today, the PTO will begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the PTO, specifically designating the “ultimate parent entity” in control of the patent or application.
  2. Tightening Functional Claiming.  The AIA made important improvements to the examination process and overall patent quality, but stakeholders remain concerned about patents with overly broad claims — particularly in the context of software.  The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
  3. Empowering Downstream Users.  Patent trolls are increasingly targeting Main Street retailers, consumers and other end-users of products containing patented technology — for instance, for using point-of-sale software or a particular business method.  End-users should not be subject to lawsuits for simply using a product as intended, and need an easier way to know their rights before entering into costly litigation or settlement.  Today, the PTO is announcing new education and outreach materials, including an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll.
  4. Expanding Dedicated Outreach and Study.  Challenges to U.S. innovation using tools available in the patent space are particularly dynamic, and require both dedicated attention and meaningful data.  Engagement with stakeholders — including patent holders, research institutions, consumer advocates, public interest groups, and the general public — is also an important part of our work moving forward.  Roundtables and workshops that the PTO, DOJ, and FTC have held in 2012 have offered invaluable input to this process.  Today, we are announcing an expansion of our outreach efforts, including six months of high-profile events across the country to develop new ideas and consensus around updates to patent policies and laws.  We are also announcing an expansion of the PTO Edison Scholars Program, which will bring distinguished academic experts to the PTO to develop — and make available to the public — more robust data and research on the issues bearing on abusive litigation.
  5. Strengthen Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission (ITC) finds a violation of Section 337 and issues an exclusion order barring the importation of infringing goods, Customs and Border Protection (CBP) and the ITC are responsible for determining whether imported articles fall within the scope of the exclusion order. Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order. To address this concern, the U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that CBP and the ITC use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.
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If you have any questions regarding this Executive Branch initiative as well as any other legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.

Thursday, May 30, 2013

House IP Subcommittee Legislative Hearing on Mobile Device Unlocking Bill Scheduled for June 6

The House Judiciary Committee's Subcommittee on Courts, Intellectual Property and the Internet has scheduled a legislative hearing to consider H.R. 1123, the "Unlocking Consumer Choice and Wireless Competition Act," for Thursday, June 6, 2013m at 10:00 a.m. EST. The witness list for the hearing has not yet been released.

H.R. 1123 was introduced by House Judiciary Committee Chairman Goodlatte (R-VA) and Ranking Member Conyers (D-MI) as well as other bipartisan Members of the House. A companion bill (S. 517) was introduced in the Senate by Senate Judiciary Committee Chairman Leahy (D-VT) and Ranking Member Grassley (R-IA) as well as other Senators. In light of the fact this legislation enjoys bipartisan support by the key folks in the House and Senate, this measure is likely to be enacted into law, even though some argue that this legislation is too limited in scope and does not open the Digital Millennium Copyright Act for changes.

According to the Congressional Research Service summary, H.R. 1123 and S. 517:

  • Repeals a Library of Congress (LOC) rulemaking determination, made upon the recommendation of the Register of Copyrights, regarding the circumvention of technological measures controlling access to copyrighted software on wireless telephone handsets (mobile telephones) for the purpose of connecting to different wireless telecommunications networks (a practice commonly referred to as "unlocking" such devices).

  • Reestablishes, as an exemption to provisions of the Digital Millennium Copyright Act (DMCA) prohibiting such circumvention, a previous LOC rule permitting the use of computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of such computer program solely to connect to such a network and access to the network is authorized by the network operator, thus permitting unlocked phones.

  • Directs the Librarian of Congress, upon the recommendation of the Register, to determine whether to extend such exemption to include any other category of wireless devices in addition to wireless telephone handsets (e.g., tablets and other mobile broadband-enabled devices).

The live video of the legislative hearing can be viewed live here.

If you have any questions regarding this hearing as well as any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.




Tuesday, May 28, 2013

Comments Due: FCC Regulatory Fees

The FCC released a Notice of Proposed Rulemaking (“NPRM”) and FurtherNotice of Proposed Rulemaking(“FNPRM”) seeking to update the way it assesses regulatory fees.  The Commission aims to make the allocation of licensees’ regulatory fee burdens more transparent. 

The NPRM proposes to combine wireline and wireless voice services into one regulatory fee category for FY 2014, which would result in one uniform fee rate that would be assessed on revenues.  The Commission explains that the services are currently in separate fee categories despite being very comparable for assessment purposes.  The Commission recognizes that assessing fees for these services based on revenue instead of subscribers may give the licensees “an incentive to allocate more of their revenues to data services in order to reduce their regulatory fees,” because the Commission does not currently assess regulatory fees on broadband revenues.  The Commission invites comments on whether another measurement methodology would be fair and sustainable.  Relatedly, it asks if it should use revenues to measure assessment for other industries, like cable and satellite. 

The NPRM seeks further comment on how it should improve fee assessments for multi-year wireless services, which pay their regulatory fees up front when their five or ten year licenses are renewed.  The NPRM asks what steps the Commission can take when the fee rate “fluctuates dramatically from one year to the next because of changes in the unit count.” 

The NPRM also identifies the declining subscribership to CMRS messaging services (including paging) as making the Commission question whether it should modify its methodology for collecting regulatory fees from entities in declining industries.  It explains that its current methodology “may be burdensome on the industry and of negligible value to the Commission, due to the administrative burden of assessing the fee on many very small companies.” 

Administratively, the NPRM proposes to require all regulatory fee payments to be made electronically as of October 1, 2013, and it announces that starting in FY 2014, the Commission will no longer mail initial regulatory fee assessments to CMRS licensees.  Those licensees will instead be able to access their estimates online.  Because the proposals contained in the NPRM will increase the assessment on some fee categories in FY 2013, it proposes to limit any rate increases for this year to 7.5 percent.  This limitation would prevent licensees from being negatively impacted by unexpected increases. 

The FNPRM portion of the document seeks comment on how the FCC should treat non-US licensed space stations, direct broadcast satellites, and other services like broadband.  It asks whether the Commission has authority to include broadband as a fee category, and how the costs of any such additional fee categories should be assessed. 

Comments on the NPRM and FNPRM are due by June 19, and Reply Comments are due by June 26.  Please feel free to contact us with any questions.

Public Notice on Technology Transition Trials

The Public Notice proposing to launch trials of three technological transitions was published in the Federal RegisterComments are due by July 8, and Reply Comments are due by August 7. 

Please feel free to contact the TLP team with any questions.

Comments Extended: Rural Call Completion NPRM

The Wireline Competition Bureau extended the deadline to file Reply Comments on the rural call completion NPRM from May 28 to June 11, upon request by NASUCA and over the objection of NECA, NTCA, the Western Telecommunications Alliance, and the Eastern Rural Telecom Association.  NASUCA argued that the issue is complex and that it needs additional time to review the comments and circulate a draft reply among its members.  The opposition argued against the extension because “solutions to the rural call completion problem have already been delayed too long.”

Please feel free to contact us with any questions.

Connect America Phase I Order

The FCC released a Report and Order (“R&O”) announcing a second round of Connect America Phase I funding to accelerate broadband deployment by price cap carriers.  The FCC allocated $300 million for this round, with the option to add an additional $185 million if carrier demand exceeds the $300 million budget.  These funds will be distributed in 2013. 
 
Price cap carries will receive $775 to serve each location that currently receives Internet service below 768 kbps/200 kbps.  Carriers will also receive $550 to serve each location that currently receives less than 3 Mbps/768 kbps.  However, the R&O prohibits carriers from accepting funding for locations that receive at least 768 kbps/200 kbps unless it has already accepted funding for all routes that include locations that receive less than 768 kbps/200 kbps, if those locations can economically be built with $775 in Connect America funding, plus $775 of the carrier’s own funds. 
 
Carriers may elect to receive all, none, or a portion of their allocated amounts.  If carriers decline support, those funds will be redistributed to carriers that are willing to make additional deployment obligations.  Any unclaimed Phase I support will be added to the budget for Phase II.  The R&O prohibits census blocks from receiving funding from both Phase I and Phase II.  A carrier that accepts Phase I support must deploy broadband to two-thirds of the required number of locations within two years, and must complete deployment to all locations within three years.  In the second and third year certifications, carriers must provide geocoded latitude and longitude location information for each location that the carrier counts towards its deployment. 
 
The R&O sets up a challenge process for carriers to argue that the National Broadband Map overstates an area’s broadband speeds.  If the challenge is granted, then the carrier is obligated to deploy in that census block.  The R&O also sets up a mechanism for interested parties to argue that the census blocks the carriers plan to serve already receive Internet access with speeds of 3 Mbps/768 kbps or higher. 
 
Please feel free to contact us with any questions.

City of Arlington v. FCC

The Supreme Court released its 6-3 Opinion in City of Arlington v. FCC.  The decision holds that courts must apply the Chevron framework of deference to an agency’s interpretation of an ambiguous statute concerning the scope of the agency’s jurisdiction.  Below, please find background information on the case and our summary of the Supreme Court’s decision.

Background

The cities of Arlington and San Antonio, Texas challenged a declaratory ruling by the FCC in which the Commission interpreted a section of the Communications Act that requires state and local governments to act on personal wireless facility siting applications “within a reasonable period of time.”  The statute makes clear that the “reasonable time” restriction is the only limitation on state authority over siting decisions.  The FCC interpreted the “reasonable period of time” limitation to set concrete deadlines by which states must act.  Arlington and San Antonio appealed the FCC’s decision to the Fifth Circuit, arguing that the FCC did not have the statutory authority to implement the timeframes.  When the Fifth Circuit analyzed whether the FCC accurately interpreted its own jurisdiction under the statute, it had to decide whether it should review the FCC’s decision de novo, without deference, or whether it should apply Chevron deference.  Chevron requires deference when (1) Congress has not expressly addressed the issue and (2) the FCC’s determination is reasonable.  The Fifth Circuit applied Chevron deference and upheld the FCC’s determination as reasonable.

Summary

Justice Scalia, writing for the majority, dismisses the proposed distinction that some agency decisions consider routine matters and others consider jurisdictional matters.  Scalia instead determines that all agency decisions should be analyzed alike by asking “whether the statutory text forecloses the agency’s assertion of authority, or not.”  As long as the statutory text does not foreclose the agency’s action, it should be subjected to Chevron’s framework of deference.  In this case, Scalia observes that the FCC has general rulemaking authority with respect to the Communications Act, and Congress did not expressly circumscribe its administration of the tower siting section in question.  Scalia reasons, therefore, that FCC’s interpretation of the section was promulgated in the exercise of its authority to administer the Communications Act.  Because Scalia assumes that the FCC’s interpretation of the section was reasonable, he concludes that the FCC’s decision should receive deference.

In dissent, Justice Roberts contends that every time a court reviews an agency’s decision, it should first decide whether “Congress has conferred on the agency interpretive authority over the question at issue.”  In Roberts’ view, the question of whether an agency has the authority to interpret a particular provision of the statute must be decided by a court without deference to the agency.  He argues that, only after the court determines that Congress expressly intended the agency to interpret the statute in question, should it move forward in applying the Chevron framework.  Roberts acknowledges, however, that a “general delegation to the agency to administer the statute will often suffice” unless “Congress has exempted particular provisions from that authority,” which courts should decide.  In this case, Roberts concludes that the Fifth Circuit should have independently determined “whether Congress delegated interpretive authority over” the section to the FCC before granting the FCC’s determination deference.  Therefore, Roberts “would vacate the decision below and remand the cases to the Fifth Circuit to perform the proper inquiry in the first instance.” 

This decision is significant because, as Scalia correctly notes, “[s]avvy challengers of agency action [. . .] play the ‘jurisdictional’ card in every case.”  Therefore, according the agency deference when it asserts jurisdiction to resolve a particular issue will likely benefit the agency.

Please feel free to contact us with any questions.

Monday, May 20, 2013

Sept. 30 Deadline - Text-to-911 Bounce-Back Message

The FCC released a Report and Order (“R&O”) requiring all CMRS and interconnected text messaging providers to enable automatic bounce-back messages when consumers attempt to text 911 in areas where text-to-911 is not available.  The rules go into effect on September 30, 2013, but the R&O encourages providers to implement bounce-back messages sooner, especially if they have indicated that it would be technically feasible to do so.  AT&T, Verizon, Sprint, and T-Mobile have already agreed to provide bounce-back messages by June 30.  Carriers that cannot meet the September deadline should request a waiver of the rule.

The bounce-back messages must state that (1) text-to-911 is not available, and (2) the consumer should try to contact 911 using other means.  The R&O does not require providers to word the bounce-back messages in any particular way.  Bounce-back messages must be provided when text messages cannot be delivered to 911 for any of the following reasons: (1) the PSAP has not enabled text-to-911 in the consumer’s area; (2) the text provider does not support text-to-911; (3) the text provider cannot determine the PSAP that should receive the message; or (4) the PSAP requested a temporary suspension of text-to-911.  Carriers must deliver the bounce-back messages to consumers that are roaming on their networks.  However, providers are not required to deliver bounce-back messages to legacy devices that are incapable of sending texts via three-digit short codes and cannot be upgraded remotely, or to non-service initialized phones. 

The R&O estimates that implementing the bounce-back messages will cost $43,200.  The R&O declines to require carriers to provide their customers with specific educational materials or to revise their terms of service agreements to include text-to-911’s limitations.  It also declines to require a text-to-911 testing capability for consumers.  As to the FCC’s authority to adopt the bounce-back rule, the R&O cites Title III of the Communications Act, the CVAA, and the Commission’s ancillary authority. 

Please feel free to contact us with any questions.                          

Mobile Wireless Competition

The FCC’s Wireless Telecommunications Bureau (“the Bureau”) released a Public Notice seeking data on mobile wireless competition for its Seventeenth Annual Report on the State of Competition in Mobile Wireless.  Comments are due by June 17, and Reply Comments are due by July 1. 

The Public Notice requests data on industry structure, spectrum, provider conduct, performance, consumer behavior, input and downstream segments, intermodal competition, urban-rural comparisons, and international comparisons.  It asks that data cover calendar year 2012 and early 2013.  A summary of the information requested for each of these categories follows:

Industry Structure

The Public Notice asks for information on major resellers and Mobile Virtual Network Operators and how they compete with facilities-based providers.  It also asks about the role of mobile satellite service providers in the wireless industry.  The Public Notice requests recent information on market entry by mobile wireless service providers and market exit, including consolidation.  It seeks comment on the effects that barriers to entry have on concentration in the industry. When the Bureau measures market concentration, it asks whether the Herfindahl-Hirschman Index is a useful tool. 

Spectrum

The Bureau seeks feedback on its “analysis of the spectrum used for mobile wireless services,” as well as individual providers’ spectrum holdings and the competitive effects of those holdings.  The Public Notice asks how much additional spectrum will be required to support next-generation technologies and mobile broadband applications.  It asks whether there is sufficient access to prevent spectrum from becoming a significant barrier to entry in the industry.  The Bureau further asks how providers’ network deployment plans are affected by their spectrum holdings in frequencies above and below 1 GHz. 

Provider Conduct

The Public Notice seeks comment on how mobile wireless pricing plans have evolved in 2012 and 2013 for voice and non-voice devices.  It asks what role handset and device pricing play in wireless competition.  It also asks what steps providers are taking to protect consumers from bill shock.  Regarding networks, the Public Notice requests information on how providers have upgraded to 3G and 4G technologies.  It asks how much money the industry spent on advertising and marketing in 2012 and 2013.  The Bureau also expresses interest in collecting information on what mobile data applications are available, including mobile web browsers and application stores, and how consumers can access them. 

Performance

The Public Notice proposes to measure wireless performance by subscribership levels, penetration rates, net subscriber additions, usage levels, pricing levels and trends, revenue, investment, profitability, and network and service quality.  The Bureau specifically asks whether it should analyze wireless service adoption rates among different segments of the population, including by age, income, and geographic area.  It asks carriers to submit data on their mobile data traffic volumes, including total megabytes of mobile data traffic on their networks on a quarterly or annual basis.  It also asks for the data to be organized by type of device, type of subscription, age group, and region.  The Public Notice requests information on how mobile voice, messaging, and broadband services are priced.  The Bureau also seeks suggestions for how it can quantifiably measure network quality. 

Consumer Behavior

The Bureau asks how consumers manage early termination fees and whether consumer switching costs should be included in its competitive analysis.  It also requests updated churn information. 

Input and Downstream Segments

The Public Notice expresses interest in how the infrastructure sector, handset, and operating system markets affect competition in the mobile wireless services industry.  It asks how many new cell sites individual providers deployed in 2012 and 2013.  It also seeks information on the extent to which providers will need to purchase additional backhaul facilities to accommodate increasing mobile broadband traffic. 

Intermodal Competition

The Bureau requests data on the extent to which mobile voice service competes with wireline voice service and how many households or individuals have cut the cord.  It seeks similar data on the relationship between mobile broadband services and wired broadband services.  Regarding Wi-Fi, the Public Notice asks how wireless providers use it to offload data and whether it is considered a substitute for mobile wireless networks. 

Urban-Rural Comparisons

The Public Notice seeks comment on the extent of mobile voice and broadband network deployment in rural and tribal areas.  It requests suggestions on how the Commission can examine “whether pricing in rural areas conforms to national pricing plans or whether there are meaningful differences in mobile wireless pricing plans and pricing promotions between urban and rural areas.”

International Comparisons

The Bureau invites commenters to submit studies or analyses that compare the mobile wireless marketplaces in the US and other countries.

If you have any questions regarding the above, please feel free to contact the TLP Team.