2007 Telecom Case Law Update

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Case Law Update presentation at the 2007 UT Telecom, Cable, and Wireless Conference

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2007 Telecom Case Law Update

  1. 1. Telecom Case Law Update Bradford W. Bayliff Casey, Gentz & Magness, L.L.P. 98 San Jacinto Boulevard, Suite 1400 Austin, Texas 78701 (512) 480-9900 9th Annual Telecom, Cable and Wireless Conference Austin, Texas March 9, 2007
  2. 2. Introduction <ul><li>Process to identify cases </li></ul><ul><ul><li>Retain cases during the year </li></ul></ul><ul><ul><li>Westlaw, Westlaw, Westlaw </li></ul></ul><ul><li>Other presenters look at the present and future </li></ul><ul><ul><li>This presentation looks at the past year </li></ul></ul><ul><ul><li>Intend for the presentation to be a survey of cases </li></ul></ul><ul><li>Impressions on first review </li></ul><ul><ul><li>271 </li></ul></ul><ul><ul><li>Reciprocal Compensation </li></ul></ul><ul><ul><li>National Security </li></ul></ul>
  3. 3. UNEs, 271 Issues, and Line Sharing <ul><li>TRO/TRRO </li></ul><ul><ul><li>Big issues last year </li></ul></ul><ul><ul><li>Anticlimactic this year </li></ul></ul><ul><li>Covad Comms. Co. v. F.C.C. , 450 F.3d 528 (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC did not have to eliminate unbundling in local exchange markets solely on basis of limited competition for tariffed special access service; </li></ul></ul><ul><ul><li>Transport thresholds were reasonable; </li></ul></ul><ul><ul><li>Conclusion made by the FCC on high-capacity loops was reasonable; </li></ul></ul><ul><ul><li>CLECs were not “impaired” without unbundled access to mass market local circuit switching; </li></ul></ul><ul><ul><li>ILECs did not concede impairment in some MMLS markets by submitting evidence of non-impairment in other markets; and </li></ul></ul><ul><ul><li>“ Reasonably efficient competitor” standard promulgated by the FCC was logical outgrowth of the FCC’s “open-ended” impairment inquiry into “uneconomic entry.” </li></ul></ul>
  4. 4. UNEs, 271 Issues, and Line Sharing <ul><li>271 Issues </li></ul><ul><ul><li>Primary question </li></ul></ul><ul><ul><ul><li>Do state commissions have the authority to require 271 terms and prices in interconnection agreements? </li></ul></ul></ul><ul><ul><li>Four districts considering cases </li></ul></ul><ul><ul><ul><li>Different results within the same districts </li></ul></ul></ul><ul><ul><ul><li>May see conflicting results between the districts </li></ul></ul></ul><ul><ul><ul><li>Next year we may be discussing Supreme Court review of the 271 issues </li></ul></ul></ul>
  5. 5. UNEs, 271 Issues, and Line Sharing <ul><li>Verizon New England Inc. v. Maine Pub. Utils. Comm’n , 441 F.Supp.2d 147 (D.Me. 2006). </li></ul><ul><ul><li>PUC was not precluded from setting rates for 271 elements; </li></ul></ul><ul><ul><li>PUC’s authority to temporarily require TELRIC pricing for 271 elements was not preempted by federal law; </li></ul></ul><ul><ul><li>PUC’s enforcement of state mandated rates through interpretation of interconnection agreement was not preempted on ground that it conflicted with federal law; and </li></ul></ul><ul><ul><li>PUC’s interpretation of interconnection agreement requiring Verizon to provide UNEs only to extent required by applicable law as requiring Verizon to provide such elements at rates prescribed by PUC for 271 network elements was not arbitrary and capricious. </li></ul></ul>
  6. 6. UNEs, 271 Issues, and Line Sharing <ul><li>BellSouth Telecomms., Inc. v. Cinergy Communications Co. , Not Reported in F.Supp.2d, 2006 WL 695424 (E.D.Ky. 2006). </li></ul><ul><ul><li>BellSouth sought review of two Kentucky Public Service Commission (“PSC”) orders </li></ul></ul><ul><ul><ul><li>One rejected BellSouth’s position that the Order on Remand was immediately effective </li></ul></ul></ul><ul><ul><ul><li>The other found that the ban on unbundling caused a change of law situation, ordering BellSouth to negotiate changes in law regarding discontinuation of UNEs. </li></ul></ul></ul><ul><ul><li>PSC orders were inconsistent with and pre-empted by the TRRO . </li></ul></ul>
  7. 7. UNEs, 271 Issues, and Line Sharing <ul><li>Southwestern Bell Tel., L.P. v. Missouri Pub. Svc. Comm’n , 461 F.Supp.2d 1055 (E.D.Mo. 2006). </li></ul><ul><ul><li>MPSC lacked the jurisdiction and authority to order ILEC unbundling obligations to be included as part of arbitrated interconnection agreement; </li></ul></ul><ul><ul><li>SBC Missouri was required to provide access to entrance facilities necessary for interconnection; and </li></ul></ul><ul><ul><li>MPSC’s decision to use the local calling areas defined in SBC Missouri’s approved local exchange tariffs to determine whether reciprocal compensation or access charges were appropriate for completing particular calls did not conflict with federal law. </li></ul></ul>
  8. 8. UNEs, 271 Issues, and Line Sharing <ul><li>MCI Worldcom Comms., Inc. v. BellSouth Telecomms., Inc. , 446 F.3d 1164 (11th Cir. 2006). </li></ul><ul><ul><li>Multiple scenarios, classifying different types of wire loops as different network elements, could be used when setting lease rates for unbundled network elements; </li></ul></ul><ul><ul><li>Inclusion of inflation factor in model used to calculate lease rates did not constitute impermissible double counting; and </li></ul></ul><ul><ul><li>Geographic cost-based deaveraging method employed by the commission complied with federal law. </li></ul></ul>
  9. 9. UNEs, 271 Issues, and Line Sharing <ul><li>One more opinion issued this week </li></ul><ul><ul><li>Page 29 of the paper </li></ul></ul><ul><ul><li>2007 WL 646147 </li></ul></ul><ul><li>Qwest Corp. v. Pub. Utils. Comm’n of Colorado , Not Reported in F.Supp.2d, 2006 WL 771223 (D.Colo. 2006). </li></ul><ul><ul><li>District Court affirmed the PUC’s order that a Master Services Agreement between Qwest and MCImetro must be filed as an interconnection agreement for approval by the Commission. </li></ul></ul>
  10. 10. UNEs, 271 Issues, and Line Sharing <ul><li>Question presented was whether the wholesale agreement must be filed for approval pursuant to § 252. </li></ul><ul><ul><li>The parties agreed that a contract must be filed as an interconnection agreement if it contains an ongoing obligation relating to section 252(b) or (c). </li></ul></ul><ul><ul><li>Accordingly, the QPP Agreement was subject to filing under § 252 if it contains an ongoing obligation relating to a facility or equipment used in the provision of telecommunications service. </li></ul></ul><ul><ul><li>Switching </li></ul></ul><ul><ul><ul><li>Switching is unmistakably related to the physical connection of two networks </li></ul></ul></ul><ul><ul><ul><li>Agreement permits ongoing access to an ILEC’s switches </li></ul></ul></ul><ul><ul><ul><li>The agreements must be filed under § 252 </li></ul></ul></ul>
  11. 11. UNEs, 271 Issues, and Line Sharing <ul><ul><li>Shared transport </li></ul></ul><ul><ul><ul><li>Shared transport relates to the physical linking of two networks. </li></ul></ul></ul><ul><ul><ul><li>Switching and shared transport are “inextricably linked” and both relate to the physical connection of two networks. </li></ul></ul></ul><ul><ul><ul><li>As with switching, access to shared transport facilitates the CLEC's provision of services to its customers. It is therefore related to Qwest's § 251(c)(3) duty to provide access to unbundled network elements whose absence would impair the CLEC's ability to provide services. </li></ul></ul></ul>
  12. 12. UNEs, 271 Issues, and Line Sharing <ul><li>Line Sharing </li></ul><ul><ul><li>Clearly “dead” and no longer required </li></ul></ul><ul><li>Dieca Comms., Inc. v. Florida Pub. Svc. Comm’n , 447 F.Supp.2d 1281 (N.D.Fla. 2006). </li></ul><ul><ul><li>PSC lacked authority to enforce provisions of the FTA governing BellSouth’s entry into interLATA services market, </li></ul></ul><ul><ul><li>Act’s requirement that BellSouth, as condition for entering interLATA market, offer competitors “local loop . . . unbundled from local switching or other services,” did not require BellSouth to line-share. </li></ul></ul><ul><li>EarthLink, Inc. v. F.C.C. , 462 F.3d 1 (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC was not required to conduct a painstaking analysis of market conditions in particular geographic markets and for specific telecommunications services; </li></ul></ul><ul><ul><li>FCC could make forbearance decision with an eye to the future by accounting for goal of advanced telecommunications capability to all Americans and assessing likely market developments; </li></ul></ul><ul><ul><li>FCC only needed to show that the positive short-term impact of unbundling would be out-weighed by the longer-term positive impact that not unbundling would have on rates, consumers, and the public interest; and </li></ul></ul><ul><ul><li>FCC’s decision was reasonable. </li></ul></ul>
  13. 13. Voice over Internet Protocol <ul><li>American Council on Educ. v. F.C.C. , 451 F.3d 226 (D.C.Cir. 2006). </li></ul><ul><ul><li>CALEA requirements apply to providers of broadband Internet access and providers of VoIP services. </li></ul></ul><ul><li>Comcast IP Phone of Mo. v. The Mo. Pub. Svc. Comm’n , Slip Copy, 2007 WL 172359 (W.D.Mo. 2007) . </li></ul><ul><ul><li>In the absence of preemption or a contrary determination by the FCC, the MoPSC has jurisdiction to decide whether Comcast’s Digital Voice service is a telecommunications service.  </li></ul></ul><ul><li>AT&T Inc. v. F.C.C. , 452 F.3d 830 (D.C.Cir. 2006). </li></ul><ul><ul><li>The FCC could not refuse to consider the merits of AT&T’s petition requesting forbearance from applying Title II common carrier regulation. </li></ul></ul>
  14. 14. Reciprocal Compensation <ul><li>ISP Issues </li></ul><ul><li>In re Core Comms., Inc. , 455 F.3d 267 (D.C.Cir. 2006). </li></ul><ul><ul><li>Rate caps on ISP-bound traffic bound were necessary to prevent subsidization of dial-up Internet access consumers by consumers of basic telephone service. </li></ul></ul><ul><li>Connect Comms. Corp. v. Southwestern Bell Tel., L.P. , 467 F.3d 703 (8th Cir. 2006). </li></ul><ul><ul><li>Interconnection agreement was ambiguous as to whether ISP-bound traffic was reciprocally compensable “local traffic”; </li></ul></ul><ul><ul><li>PSC did not act arbitrarily or capriciously by determining that parties had intended ISP-bound traffic to be treated as non-local. </li></ul></ul><ul><li>ASAP Paging Inc. v. Pub. Util. Comm’n of Texas , --- S.W.3d ----, 2006 WL 1194970 (Tex.App.-Austin 2006). </li></ul><ul><ul><li>Commission’s finding that calls made from telephone company’s customers to paging and ISP customers were not entitled to local ELCS ratings was supported by substantial evidence. </li></ul></ul>
  15. 15. Reciprocal Compensation <ul><li>VNXX Issues </li></ul><ul><li>Verizon California, Inc. v. Peevey , 462 F.3d 1142 (9th Cir. 2006). </li></ul><ul><ul><li>Imposition of reciprocal compensation on VNXX traffic was not arbitrary and capricious; </li></ul></ul><ul><ul><li>CPUC could allow reciprocal compensation for ISP bound VNXX traffic and also allow call origination charges for that same traffic; and </li></ul></ul><ul><ul><li>Conclusion that CLEC could distinguish VNXX from local traffic that was first transported long-distance to CLEC switch and then back to original calling area was not arbitrary or capricious. </li></ul></ul><ul><li>Verizon North Inc. v. Telnet Worldwide, Inc. , 440 F.Supp.2d 700 (W.D.Mich. 2006). </li></ul><ul><ul><li>VNXX calls would be treated as intraexchange calls for reciprocal compensation </li></ul></ul><ul><li>Global NAPs, Inc. v. Verizon New England, Inc. , 454 F.3d 91 (2nd Cir. 2006). </li></ul><ul><ul><li>Board’s ruling that Global NAPs could not use VNXX service was not preempted by the FCC ruling. </li></ul></ul>
  16. 16. Reciprocal Compensation <ul><li>Wireless Issues </li></ul><ul><li>Iowa Network Svcs., Inc. v. Qwest Corp. , 466 F.3d 1091 (8th Cir. 2006). </li></ul><ul><ul><li>Traffic within an MTA between CMRS providers and ILECs involves “local” traffic. </li></ul></ul><ul><li>Alma Comms. Co. v. Missouri Pub. Svc. Comm’n , Slip Copy, 2006 WL 1382348 (W.D.Mo. 2006) . </li></ul><ul><ul><li>Carriers must enter into reciprocal compensation agreements for the transport and termination of traffic exchanged between a LEC and a CMRS provider. </li></ul></ul>
  17. 17. Reciprocal Compensation <ul><li>Global NAPs, Inc. v. Verizon New England, Inc. , 444 F.3d 59 (1st Cir. 2006). </li></ul><ul><ul><li>FCC did not expressly or impliedly preempt state regulation of intercarrier compensation for non-local ISP bound calls when it issued its ISP Remand Order. </li></ul></ul><ul><li>Global NAPs, Inc. v. Verizon New England, Inc. , 447 F.Supp.2d 39 (D.Mass. 2006). </li></ul><ul><ul><li>On remand, DTE’s interpretation of interconnection agreement to require that Global NAPs pay reciprocal compensation for ISP bound calls in Massachusetts until the FCC or a court of competent jurisdiction first decided the issue was reasonable. </li></ul></ul>
  18. 18. Reciprocal Compensation <ul><li>Mass. DTE required Global NAPs to pay Verizon access charges for all &quot;virtual NXX&quot; traffic, including non-local ISP-bound traffic, rejecting Global NAPs' argument that state commissions were preempted by the ISP Remand Order from regulating intercarrier compensation for all ISP-bound traffic. </li></ul><ul><li>Global NAPs challenged the DTE's conclusion. </li></ul><ul><li>Verizon and the DTE argued that the DTE retained authority to decide the issue because the FCC order only preempted state commission regulation of &quot;local&quot; traffic sent to an ISP, and the FCC did not hold that virtual NXX traffic is such local traffic. </li></ul>
  19. 19. Reciprocal Compensation <ul><li>“ Virtual&quot; NXXs (VNXX) allows the CLEC to give a customer can be given VNXX numbers that are different than those that would normally be assigned to him based on his physical location. </li></ul><ul><li>This allows a party to call what appears to be a &quot;local&quot; number, although the call is actually routed to a different local calling area. </li></ul><ul><li>When the party making such a call is a Verizon customer, the call is transmitted outside the local calling area by Verizon. </li></ul>
  20. 20. Reciprocal Compensation <ul><li>The court invited the FCC to file a brief as amicus curiae on the question of the preemptive effect of the ISP Remand Order </li></ul><ul><ul><li>Whether the ISP Remand Order was intended to preempt states from establishing a compensation regime that governs a call placed by an ILEC customer in one exchange to a CLEC-served ISP located in a different exchange using a VNXX number assigned to the ISP by the CLEC. </li></ul></ul>
  21. 21. Reciprocal Compensation <ul><li>FCC Brief </li></ul><ul><ul><li>ISP Remand Order does not provide a clear answer to this question. </li></ul></ul><ul><ul><li>FCC has not addressed application of the ISP Remand Order to ISP-bound calls outside a local calling area. </li></ul></ul><ul><ul><li>ISP Remand Order can be read to support the interpretation set forth by either party in this dispute. </li></ul></ul><ul><ul><li>ISP Remand Order deemed all ISP-bound calls to be interstate calls subject to the FCC’s jurisdiction. </li></ul></ul><ul><ul><li>But, the Order also indicates that the Commission was considering only calls placed to ISPs located in the same local calling area as the caller. </li></ul></ul>
  22. 22. Reciprocal Compensation <ul><li>FCC Brief </li></ul><ul><ul><li>The Commission itself, however, has not expressed a position on the matter. </li></ul></ul><ul><ul><li>It would not be possible for the Commission’s litigation staff to provide an official position on a matter that the Commissioners themselves have not yet directly confronted and addressed in a rulemaking or adjudicatory proceeding. </li></ul></ul>
  23. 23. Reciprocal Compensation <ul><li>The Court also asked the FCC if the FTA would prohibit a state from imposing access charges on ISP-VNXX calls. </li></ul><ul><li>FCC Brief </li></ul><ul><ul><li>FCC has not decided the implications of using VNXX numbers for intercarrier compensation. </li></ul></ul><ul><ul><li>Litigation staff was unable to advise the Court whether the Commission might in the future interpret any provision of the Act to prohibit state-imposed access charges. </li></ul></ul>
  24. 24. Reciprocal Compensation <ul><li>With this sound advice from the FCC </li></ul><ul><ul><li>“ We find that there is a lack of clarity about whether the ISP Remand Order preempts state regulation of the access charges at issue here.” </li></ul></ul><ul><ul><li>“ Given the requirement of a clear indication that the FCC has preempted state law, the ISP Remand Order does not have the broad preemptive effect that Global NAPs seeks to assign to it.” </li></ul></ul><ul><ul><li>The Court held that the FCC did not expressly preempt state regulation of intercarrier compensation for non-local ISP-bound calls, leaving the DTE free to impose access charges for such calls under state law. </li></ul></ul>
  25. 25. State and Local Regulatory Authority <ul><li>Southwestern Bell Tel., L.P. v. Pub. Util. Comm’n of Texas , 467 F.3d 418 (5th Cir. 2006). </li></ul><ul><ul><li>Court of Appeals held that the PUCT order that modified the Performance Remedy Plan of Texas Agreement, without the consent of SBC Texas was not arbitrary and capricious. </li></ul></ul><ul><li>Premiere Network Svcs., Inc. v. SBC Comms., Inc. , 440 F.3d 683 (5th Cir. 2006). </li></ul><ul><ul><li>Premiere, which had filed a complaint against SBC Texas with the FCC, was barred from pursuing the same claims in federal District Court, notwithstanding its voluntary dismissal of the FCC complaint; </li></ul></ul><ul><ul><li>Premiere’s state law claims were not sufficiently related to claims that were the subject of a prior complaint filed by Premiere with the FCC for the FCC complaint to trigger election-of-remedies bar as to state law claims. </li></ul></ul>
  26. 26. Universal Service <ul><li>Telstar Resource Group, Inc. v. MCI, Inc. , Slip Copy, 2007 WL 148726 (S.D.N.Y. 2007). </li></ul><ul><ul><li>District Court stayed Telstar’s claim pending the FCC’s consideration of the relevance of its existing jurisdictional separations procedures to the assessment of federal and state USF surcharges on mixed-use direct access lines. </li></ul></ul><ul><li>In re Incomnet, Inc. , 463 F.3d 1064 (9th Cir. 2006). </li></ul><ul><ul><li>The Court of Appeals held that USAC was an “initial transferee” of universal service fund contributions collected from debtor, from which an avoidable preferential transfer could be recovered. </li></ul></ul>
  27. 27. Rates <ul><li>BellSouth Telecomms., Inc. v. F.C.C. , U.S., 469 F.3d 1052 (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC gave an inadequate explanation for finding that BellSouth’s volume discount plan for special access services favored affiliate in long-distance market. </li></ul></ul><ul><ul><li>FCC gave an inadequate explanation for invalidating the requirement to commit for five years to purchase each year no less than 90% of what subscribers had purchased on an annualized basis in the six months preceding their subscription to the plan. </li></ul></ul><ul><li>AT&T Comms. of Texas, L.P. v. Southwestern Bell Tel. Co. , 186 S.W.3d 517 (Tex. 2006). </li></ul><ul><ul><li>SBC Texas could increase its switched access rates to the level specified by statute without regard to the effect on competition </li></ul></ul><ul><ul><li>PUC lacked authority to determine reasonableness or reduce the rates; </li></ul></ul><ul><ul><li>PUC could consider whether switched access rates resulted in unfair competition and could take action authorized by PURA other than reducing the rates or determining reasonableness; and </li></ul></ul><ul><ul><li>PUC jurisdiction over an IXC extended only to competitor’s allegations that the IXC offered preferential terms to SBC Texas customers and did not extend to allegations that the IXC engaged with the ILEC in cross-subsidization or a price squeeze. </li></ul></ul>
  28. 28. Pick and Choose <ul><li>The “Pick and Choose” option is no longer available to CLECs who wish to interconnect with an ILEC. </li></ul><ul><li>New Edge Network, Inc. v. F.C.C. , 461 F.3d 1105 (9th Cir. 2006). </li></ul><ul><ul><li>FCC did not abuse its discretion by adopting its “all or nothing” interpretation. </li></ul></ul><ul><li>BellSouth Telecomms., Inc. v. Southeast Tel., Inc. , 462 F.3d 650 (6th Cir. 2006). </li></ul><ul><ul><li>Applying the all-or-nothing rule would not have impermissible retroactive effect. </li></ul></ul>
  29. 29. Cellular Issues <ul><li>RF Class Action </li></ul><ul><li>Samsung Electronics America, Inc. v. Fed. Ins. Co. , 202 S.W.3d 372 (Tex.App.-Dallas 2006). </li></ul><ul><ul><li>Alleged biological injury to human cells as result of exposure to radio frequency radiation was “bodily injury” within the meaning of the policies; </li></ul></ul><ul><ul><li>Cost of headsets constituted “damages because of bodily injury” within the meaning of the policies; and </li></ul></ul><ul><ul><li>Federal Insurance owed no duty to defend suit alleging only misrepresentation and unjust enrichment. </li></ul></ul><ul><li>Trinity Universal Ins. Co. v. Cellular One Group , Not Reported in S.W.3d, 2007 WL 49667 (Tex.App.-Dallas 2007). </li></ul><ul><ul><li>Trinity had a duty to defend Cellular One in three class-action lawsuits pending in federal court against Cellular One. </li></ul></ul>
  30. 30. Cellular Issues <ul><li>Compensation </li></ul><ul><li>WWC License, L.L.C. v. Boyle , 459 F.3d 880 (8th Cir. 2006). </li></ul><ul><ul><li>Western Wireless did not have duty to connect directly with ILEC; </li></ul></ul><ul><ul><li>Commission did not act arbitrarily or capriciously </li></ul></ul><ul><ul><ul><li>When it found that it was reasonable to apportion some of the cost of switches to termination of calls on a per-minute basis, rather than charging all switch costs on a flat, per-line basis; </li></ul></ul></ul><ul><ul><ul><li>In selecting an allocation for transportation costs within range established by unchallenged rate equivalency methods; </li></ul></ul></ul><ul><ul><ul><li>When finding that interim compensation was due nor to select date of carrier’s formal request for negotiations as a beginning date; but </li></ul></ul></ul><ul><ul><li>Commission’s finding that traffic sent to a tandem switch and bound for competitive wireless carrier’s network was not traffic terminated to that network was erroneous. </li></ul></ul>
  31. 31. Cellular Issues <ul><li>Cellular Tower Siting </li></ul><ul><li>CTIA-Wireless Ass’n v. F.C.C. , 466 F.3d 105 (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC did not act contrary to law in following the Advisory Council on Historic Preservation’s reasonable interpretation of a statute that Council was charged with implementing. </li></ul></ul><ul><li>GTE Mobilnet of Cal. Ltd. Partnership v. City and County of San Francisco , 440 F.Supp.2d 1097 (N.D.Cal. 2006). </li></ul><ul><ul><li>Verizon Wireless was a “telephone corporation,” within meaning of Public Utilities Code permitting telephone corporations to construct telephone lines and equipment along public roads and highways; </li></ul></ul><ul><ul><li>Public Utilities Code did not preclude city from regulating in the field; </li></ul></ul><ul><ul><li>Verizon Wireless failed to prove that it was authorized by the California Public Utilities Commission to occupy the public rights-of-way, as was required to be entitled to obtain UCP, under city’s administrative regulation. </li></ul></ul>
  32. 32. Cellular Issues <ul><li>ETC Designation </li></ul><ul><li>WWC Holding Co., Inc., v. Pub. Utils. Comm’n of the State of Colorado , 420 F. Supp.2d 1186 (D.Colo. 2006). </li></ul><ul><ul><li>Some of the conditions imposed by the Colorado PUC constituted rate regulation contrary to the FTA; </li></ul></ul><ul><ul><li>Conditions regulated interstate services, thus exceeding the Commission’s authority; and </li></ul></ul><ul><ul><li>Commission could not impose quality of service standards without complying with state rule-making procedures. </li></ul></ul>
  33. 33. Cable Issues <ul><li>Subcontractor Liability </li></ul><ul><li>Howell v. TS Comms., Inc. , --- S.W.3d ----, 2006 WL 3718332 (Tex.App.-Dallas 2006). </li></ul><ul><ul><li>Subcontractor’s failure to obtain insurance on installer’s behalf was not the cause of a cable television customer ’s injuries </li></ul></ul><ul><ul><li>Customer was not a third-party beneficiary of a contract that required the subcontractor to add the installer to its liability policy if the installer did not provide proof of general liability insurance. </li></ul></ul>
  34. 34. Cable Issues <ul><li>Cable as a “Utility” </li></ul><ul><li>In re Darby , 470 F.3d 573 (5th Cir. 2006). </li></ul><ul><ul><li>After a Chapter 13 debtor moved to compel his cable service company to reinstate cable service on the theory that the company had wrongfully refused to reinstate service contrary to requirements of the bankruptcy statute providing debtors with protection against termination of “utility” service, the Court of Appeals held that the provider of cable television service did not qualify as “utility” within the meaning of bankruptcy statute providing debtors with protection against termination of utility service. </li></ul></ul>
  35. 35. Cable Issues <ul><li>Theft of Service </li></ul><ul><li>Charter Comms. Entertainment I, DST v. Burdulis , 460 F.3d 168 (1st Cir. 2006). </li></ul><ul><li>Charter brought actions against buyers of unauthorized cable descrambling devices for unauthorized reception of cable programming. </li></ul><ul><ul><li>Statute proscribing unauthorized interceptions of radio communications did not apply to theft of radio signals that were delivered by wire over cable network; </li></ul></ul><ul><ul><li>Statute prohibiting unauthorized reception of communications services offered over cable system allows only one statutory damages award of not more than $10,000, even when there are multiple violations; and </li></ul></ul><ul><ul><li>Statutory damages for unauthorized reception of communications services offered over cable system should be calculated based solely on estimate of actual damages. </li></ul></ul>
  36. 36. Cable Issues <ul><li>Assessment of Late Fees </li></ul><ul><li>Cantu v. AT&T Broadband , Not Reported in S.W.3d, 2006 WL 332622 (Tex.App.-San Antonio 2006). </li></ul><ul><ul><li>AT&T Broadband’s assessment of administrative late fees did not constitute usury under state law; </li></ul></ul><ul><ul><li>Subscribers were not entitled to declaratory or injunctive relief. </li></ul></ul>
  37. 37. Cable Issues <ul><li>Set-Top Converter Boxes </li></ul><ul><li>Charter Comms., Inc. v. F.C.C. , 460 F.3d 31, 373 (D.C.Cir. 2006). </li></ul><ul><ul><li>Refusal of the FCC to rescind ban on integrated navigation devices that performed both security and non-security functions was not arbitrary or capricious; </li></ul></ul><ul><ul><li>Banning cable television operators from offering integrated navigation devices that performed both security and non-security functions, while exempting direct broadcast satellite systems from that ban, was not unreasonable; </li></ul></ul><ul><ul><li>Competitive reasons that led the FCC to impose a ban on integrated navigation devices that performed both security and non-security functions had not been eliminated by intermodal competition in market; </li></ul></ul><ul><ul><li>FCC reasonably could delay, while not deleting, its ban on integrated navigation devices that performed both security and non-security functions. </li></ul></ul>
  38. 38. Satellite Issues <ul><li>TiVo Inc. v. EchoStar Comms. Corp. , 446 F.Supp.2d 664 (E.D.Tex. 2006). </li></ul><ul><ul><li>TiVo, the patent holder, brought an action against competitors, alleging that EchoStar (Dish Network) infringed its patents for digital video recorders. </li></ul></ul><ul><ul><li>Following a jury verdict of willful infringement and $90 million in initial damages, TiVo moved for entry of a permanent injunction. EchoStar cross-moved to stay any injunction. </li></ul></ul><ul><ul><li>District Court held that a permanent injunction was warranted, and that a stay of a permanent injunction was not warranted. </li></ul></ul><ul><ul><li>Court of Appeals then issued a temporary stay on the injunction. </li></ul></ul>
  39. 39. Satellite Issues <ul><li>CBS Broadcasting, Inc. v. EchoStar Comms. Corp. , 450 F.3d 505 (11th Cir. 2006). </li></ul><ul><li>Dispute over Dish Network’s retransmission of local programs and whether the broadcast infringed on the local stations’ exclusive right to control retransmission of their programs. </li></ul><ul><ul><li>Rule used by Dish Network to determine eligibility to receive distant programming violated the Satellite Home Viewer Act; </li></ul></ul><ul><ul><li>Use of model that included interference did not comply with Act; </li></ul></ul><ul><ul><li>Dish Network engaged in “willful or repeated” violations, requiring a permanent injunction. </li></ul></ul>
  40. 40. Franchise Requirements and Local Issues <ul><li>Texas Cable & Telecomms. Ass’n v. Hudson , 458 F.Supp.2d 309 (W.D.Tex. 2006). </li></ul><ul><ul><li>TCTA’s challenge to state video franchise was not ripe for adjudication. </li></ul></ul><ul><li>In re Adelphia Communications Corp ., --- B.R. ----, 2007 WL 64128 (Bankr.S.D.N.Y. 2007). </li></ul><ul><ul><li>Whatever right local franchising authorities had to object to assignment of debtor's franchise agreements had no effect on whether these executory contracts could be assumed; </li></ul></ul><ul><ul><li>Ordinance that indicated on its cover page that it related to provision of cable television service to city residents only by debtor was not enforceable. </li></ul></ul>
  41. 41. Franchise Requirements and Local Issues <ul><li>Time Warner Telecom of Oregon, LLC v. City of Portland , 452 F.Supp.2d 1084 (D.Or. 2006). </li></ul><ul><ul><li>Portland’s sale of Ethernet high-speed data transmission services to other governmental entities and public schools in area around municipality was not preempted; </li></ul></ul><ul><ul><li>Per foot usage fee did not have effect of prohibiting provision of telecommunications service; and </li></ul></ul><ul><ul><li>Portland was not required to impose identical franchise fees on private carriers that used its rights of way differently. </li></ul></ul><ul><li>Time Warner Telecom of Oregon, LLC v. City of Portland , 452 F.Supp.2d 1103 (D.Or. 2006). </li></ul><ul><ul><li>In-kind contribution provisions in Time Warner Telecom’s franchise agreement with Portland, which helped to create city’s fiber optic network, were not preempted by the FTA; </li></ul></ul><ul><ul><li>Neither the city charter nor any Oregon statute prohibited the city from providing telecommunications services through its fiber optic network to other government entities outside the city limits. </li></ul></ul>
  42. 42. Franchise Requirements and Local Issues <ul><li>Qwest Comms. Corp. v. City of Greensboro , 440 F.Supp.2d 480 (M.D.N.C. 2006). </li></ul><ul><ul><li>Qwest did not have an implied private right of action, enforceable under § 1983, for violation of FTA section authorizing local regulation of telecommunication services to extent necessary to manage public rights-of-way; </li></ul></ul><ul><ul><li>Allegations that the city’s franchise agreement and ordinance imposed a burden on interstate commerce, and that the burden clearly outweighed their benefits, if any, to the public, supported provider’s claim for violation of the dormant Commerce Clause; </li></ul></ul><ul><ul><li>Qwest failed to allege that it had been deprived of its property interest in operating under the franchise agreement with the city. </li></ul></ul>
  43. 43. Franchise Requirements and Local Issues <ul><li>Pac. Bell Tel. Co. v. City of Walnut Creek , 428 F.Supp.2d 1037 (N.D.Cal. 2006). </li></ul><ul><ul><li>FTA did not preclude the city from imposing franchise requirements on SBC California’s provision of non-cable video programming; </li></ul></ul><ul><ul><li>Court declined to exercise supplemental jurisdiction over a claim that a state statute authorized SBC California to transport video programming over its telephone lines without obtaining separate franchise from city. </li></ul></ul>
  44. 44. Tariffs <ul><li>AT&T Corp. v. JMC Telecom, LLC , 470 F.3d 525 (3rd Cir. 2006). </li></ul><ul><ul><li>Filed rate doctrine barred </li></ul></ul><ul><ul><ul><li>JMC Telecom’s breach of tariff claim based on company’s refusal to grant it lower prices pursuant to contract addendum; </li></ul></ul></ul><ul><ul><ul><li>claims alleging that AT&T provided poor customer services in areas not spelled out in tariff; and </li></ul></ul></ul><ul><ul><ul><li>JMC Telecom’s state-law claims. </li></ul></ul></ul><ul><li>Wholesale Telecom Corp. v. ITC Deltacom Comms., Inc. , 176 Fed.Appx. 76, Not selected for publication in the Federal Reporter, 2006 WL 988480 (11th Cir. 2006). </li></ul><ul><ul><li>parties’ service agreement allowed ITC Deltacom to raise its rates through tariffs posted on its website. </li></ul></ul>
  45. 45. Arbitration <ul><li>Verizon New York, Inc. v. Covad Comms. Co. , Not Reported in F.Supp.2d, 2006 WL 278281 (N.D.N.Y. 2006). </li></ul><ul><ul><li>NY PSC's decision to delegate its responsibility to enforce interconnection agreements to an entity or party (arbitrator) not contemplated by the statutory mechanism of review is contrary to the 1996 Act. </li></ul></ul><ul><ul><li>The PSC's decision to freeze the parties' obligations until a qualified administrative or judicial body decides whether and to what extent a change of law affects the parties' relationships is reasonable and consistent with the 1996 Act. </li></ul></ul>
  46. 46. Arbitration <ul><li>Dale v. Comcast Corp. , 453 F.Supp.2d 1367 (N.D.Ga. 2006). </li></ul><ul><li>Comcast subscribers brought putative class action, alleging that they were overcharged in violation of the Cable Communications Policy Act. Comcast moved to dismiss and to compel arbitration. </li></ul><ul><ul><li>Arbitration agreement existed between parties; </li></ul></ul><ul><ul><li>Action was within scope of arbitration agreement; </li></ul></ul><ul><ul><li>Arbitrator, rather that the District Court, would decide procedural unconscionability claims challenging making of subscriber agreement as a whole; </li></ul></ul><ul><ul><li>Arbitration provisions were not procedurally unconscionable; </li></ul></ul><ul><ul><li>Arbitration provision precluding litigation of class actions was not substantively unconscionable; and </li></ul></ul><ul><ul><li>Action would be dismissed, rather than stayed pending arbitration. </li></ul></ul>
  47. 47. Arbitration <ul><li>Stern v. Cingular Wireless Corp. , 453 F.Supp.2d 1138 (C.D.Cal. 2006). </li></ul><ul><li>Stern, an AT&T Wireless customer, brought class action against AT&T Wireless, Cingular (which acquired AT&T Wireless), and several unknown defendants, alleging that the defendants perpetrated a scheme to overcharge customers by imposing service charges on their bills for services not authorized by those customers, and asserting claims for violation of the Federal Communications Act. </li></ul><ul><ul><li>Operable arbitration clause was not the arbitration clause in Cingular’s service agreement with customers, but, rather, the arbitration clause in AT&T Wireless’ service agreement provided to Stern at the time she entered into the Service Agreement; </li></ul></ul><ul><ul><li>Class action waiver clause contained in AT&T Wireless’ service agreement was </li></ul></ul><ul><ul><ul><li>procedurally unconscionable, as it would render arbitration clause in service agreement unenforceable; </li></ul></ul></ul><ul><ul><ul><li>substantively unconscionable, as would render arbitration clause in service agreement unenforceable . </li></ul></ul></ul>
  48. 48. Arbitration <ul><li>Kristian v. Comcast Corp. , 446 F.3d 25 (1st Cir. 2006). </li></ul><ul><li>Customers brought state and federal court actions against Comcast for antitrust violations in connection with “swapping agreements” whereby Comcast traded customers with competitors. </li></ul><ul><ul><li>Arbitration agreements applied retroactively to claims arising before the existence of the agreements; </li></ul></ul><ul><ul><li>Comcast satisfied the statutory requirement to provide notice of changes; </li></ul></ul><ul><ul><li>Prohibitions against treble damages, attorney fees and costs, and class action were invalid; </li></ul></ul><ul><ul><li>Award of treble damages under the federal antitrust statutes cannot be waived. </li></ul></ul>
  49. 49. Other Issues <ul><li>Southern New England Tel. Co. v. Global NAPs, Inc. , 458 F.Supp.2d 23 (D.Conn. 2006). </li></ul><ul><ul><li>District Court held that Global NAPs was not a “telephone company” within the meaning of Connecticut statute protecting telephone company fixtures from attachment. </li></ul></ul>
  50. 50. Other Issues <ul><li>Doty Comms., Inc. v. L.M. Berry & Co. , 417 F.Supp.2d 1355 (N.D.Ga. 2006). </li></ul><ul><ul><li>Publisher’s breach of its obligations under advertising contracts with businesses did not give rise to a tort cause of action for gross negligence; </li></ul></ul><ul><ul><li>Limitation of liability clause contained in parties’ advertising contracts, stating that publisher’s liability for errors, omissions, or misplacements would not exceed the amount of charges for the advertisements, was valid and enforceable. </li></ul></ul>
  51. 51. Other Issues <ul><li>American Ass’n of Paging Carriers v. F.C.C. , 442 F.3d 751 (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC Order merely denying reconsideration was not subject to judicial review. </li></ul></ul>
  52. 52. Other Issues <ul><li>Terkel v. AT&T Corp. , 441 F.Supp.2d 899 (N.D.Ill. 2006). </li></ul><ul><li>Telephone subscribers sued AT&T, claiming that telephone records were illegally disclosed to National Security Agency. Government intervened and moved to dismiss. </li></ul><ul><ul><li>Subscribers could allege that AT&T had made transfers in question; </li></ul></ul><ul><ul><li>Intelligence Reform and Terrorism Prevention Act did not apply; </li></ul></ul><ul><ul><li>State secrets privilege barred discovery as to whether AT&T had provided records to NSA; and </li></ul></ul><ul><ul><li>Without information from discovery, subscribers lacked standing to sue. </li></ul></ul>
  53. 53. Other Issues <ul><li>Harris County Toll Road Authority v. Southwestern Bell Tel., L.P. , --- S.W.3d ----, 2006 WL 2641204 (Tex.App.-Hous. 2006). </li></ul><ul><ul><li>SBC Texas was an “eligible utility facility” for purposes of considering whether it was due county reimbursement for its relocation costs; </li></ul></ul><ul><ul><li>Code section that provided that the “county shall include the cost of relocating or adjusting an eligible utility facility in the expense of right-of-way acquisition” did not waive county’s immunity from suit or create a private right of action; and </li></ul></ul><ul><ul><li>SBC Texas did not have an easement or vested property interest in public right-of-way, and thus county’s acquisition of right-of-way as part of road construction project was not a taking that required compensation. </li></ul></ul>
  54. 54. Other Issues <ul><li>In re Worldcom, Inc. , 343 B.R. 430 (Bankr.S.D.N.Y. 2006). </li></ul><ul><ul><li>IRU agreement, under which Worldcom acquired the exclusive, indefeasible right to use such fibers in its business for term of 20 years, as well as option to purchase legal title to fibers at end of this term, did not confer on telecommunications company a mere contractual right, in nature of license, but a property interest: </li></ul></ul><ul><ul><li>Property interest was enforceable against third-party purchaser; </li></ul></ul><ul><ul><li>Worldcom had to be regarded as having right of access to fibers for purpose of performing maintenance necessary to its continued exercise of its rights under the IRU agreement. </li></ul></ul>
  55. 55. Other Issues <ul><li>American Tel. and Telegraph Co. v. F.C.C. , 454 F.3d 329, (D.C.Cir. 2006). </li></ul><ul><ul><li>FCC’s decision to make retroactive its determination that AT&T’s prepaid calling card service was a telecommunications service was reasonable. </li></ul></ul>
  56. 56. Other Issues <ul><li>In re Worldcom, Inc. , 339 B.R. 836 (S.D.N.Y. 2006). </li></ul><ul><ul><li>Use of fiber optic lines to transmit series of light pulses under property owner’s land was not itself “trespass” actionable under Kansas law; </li></ul></ul><ul><ul><li>Use of fiber optic lines that were buried several feet beneath property owner’s land in order to transmit series of light pulses under this land did not in any way interfere with property owner’s possessory rights, and did not constitute trespass under Alabama law; </li></ul></ul><ul><ul><li>Trespass that occurred as result of installation of these fiber optic lines prepetition was permanent, as opposed to a continuing, trespass under both Kansas and Alabama law, that occurred prior to commencement of Worldcom’s Chapter 11 case, and any damages claim for which was discharged upon confirmation of Worldcom’s Chapter 11 plan; and </li></ul></ul><ul><ul><li>Any actionable unjust enrichment claim that property owners possessed was likewise discharged. </li></ul></ul>
  57. 57. Other Issues <ul><li>Beattie v. CenturyTel, Inc. , 234 F.R.D. 160 (E.D.Mich. 2006). </li></ul><ul><li>Customers brought putative class action against CenturyTel, challenging CenturyTel’s practice of billing for inside wire maintenance insurance and for charging for such optional service when it was not ordered. </li></ul><ul><ul><li>Transfer to the FCC was not warranted under the primary jurisdiction doctrine; </li></ul></ul><ul><ul><li>Predominance and superiority requirements for certification of opt-out class were satisfied; and </li></ul></ul><ul><ul><li>CenturyTel’s practice of charging for its optional inside wire maintenance insurance under the heading “non-regulated services” constituted an unreasonable practice. </li></ul></ul>
  58. 58. Coming This Year <ul><li>Bell Atlantic Corp. v. Twombly , 126 S.Ct. 2965 (Mem), 165 L.Ed.2d 949, 74 USLW 3713, 74 USLW 3720, 75 USLW 3018, 06 Cal. Daily Op. Serv. 5527 (U.S., June 26, 2006). </li></ul><ul><ul><li>Petition for writ of certiorari to the United States Court of Appeals for the Second Circuit granted. </li></ul></ul>

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