Telecom and Technology Law Blog

TLG White Paper Podcast: Effectively Negotiating Telecom Agreements

Carrier agreements are intended to set forth the terms and conditions under which resellers purchase the essential commodity of their business:  telecommunications services.  Sadly, however, it is the rare instance when resellers have read or truly understand the essential terms and conditions of their agreements or negotiate the terms of their agreements effectively as a matter of tactic or strategy.  Even more troubling is the fact that few resellers use their agreements to facilitate their business interests and to protect themselves against undue risk.  As a result, rather than being a roadmap to success and a shield against risk, carrier agreements often become minefields through which resellers unwittingly wander until the inevitable misstep is made and the damage is done.

This white paper is the first in a series addressing key issues in telecom agreements.  Future white papers will address the process of drafting telecom agreements (including a discussion of some of the most critical terms) as well as agreement implementation, dispute resolution and litigation issues.  We hope that you find them of value.

Posted By Neil S. Ende In All Articles , Litigation, Arbitration & Mediation , Podcasts , Telecom , White Papers Comments 0 Continue Reading Permalink

TLG Podcast: Developments Shaping the Internet

“Opt-In” Web Tracking

Washington, DC: For some time, companies like Google and Yahoo have been tracking consumer searches on their own sites “to tailor advertisements to their interests.” Recently, however, the problem has grown as third-party advertising companies have teamed up with phone or cable Internet carriers to track user activities on the Internet more generally.

Congressman Joe Barton (R-TX) and Congressman Edward Markey (D-MA) believe that this automatic tracking process violates the public’s right to privacy.  To address this concern, they have proposed an “opt-in” program which would allow consumers to choose whether they want to have their data logged to receive customized advertising.

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TLG SnapUPdate Podcast: ACLU Vows to Challenge FISA Immunity Provisions

Washington, DC: The ACLU plans to challenge the FISA bill passed on July 9, 2008, by the Senate. The Foreign Intelligence Surveillance Act ("FISA") grants telecommunications companies, which helped the National Security Agency spy on Americans, retroactive civil immunity from lawsuits

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TLG SnapUPdate Podcast: E-Mail Privacy at the Office

The introduction of new communications technologies into the workplace has created new privacy concerns for employers and employees. Should an employer have the right to view what an employee is doing on his or her computer while at work or while on company business? Should an employee have an expectation that personal e-mails or documents will be kept private from employers? These are questions that are in the process of being answered by the courts. However, there is still no clear precedent in determining a standard answer to these questions. So far, the courts have decided that employees are entitled to a “reasonable expectation of privacy” but this “reasonable expectation” all depends on the facts of a particular case.

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TLG SnapUPdate Podcast: FCC Rules that Verizon May Not Use Customer Proprietary Information in Efforts to Retain Customers

Washington, DC: The FCC ruled that Verizon Communications, Inc. may not use customer proprietary information in connection with its efforts to retain customers who are attempting to switch to a cable-provided telephone service.  The FCC’s ruling came in response to complaints filed by Comcast Corp., Time Warner Cable Inc., who argued that “the practice violated the law because it used proprietary information about customers.”

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Washington, DC: The Federal Communications Commission held a public hearing regarding early termination fees (“ETFs”) last week. The hearing included members of the industry, experts in economics and law, state regulators, consumer protection advocate representatives from governmental and non-governmental bodies, and individual consumers. All presented their arguments and evidence in favor or against the regulation of ETFs.

Executives from DIRECTV and Verizon argued that ETFs lower the barrier to entry for consumers, thereby allowing consumers who would not normally be able to participate in wireless markets, to gain entry. They reasoned that subsidized equipment (and installation in the case of DIRECTV) with an attached service contract that includes early termination fees, allows consumers to pay minimal or no upfront costs, paying their remaining costs over the term of their contract.  From this premise, they argued that if equipment and service were purchased separately, consumers would have to be charged large upfront fees, which would create an economic barrier for many consumers.

Industry executives and a lawyer that has represented AT&T in ETF lawsuits argued that consumers currently have the option of buying equipment and service plans separately, including month to month post paid and prepaid service plans, and, separately, the option of a term commitment and a subsidized phone with an ETF contract. These parties claimed that consumers have overwhelmingly opted for service plans that offer minimal upfront costs in return for a service commitment and ETFs. However, as reported by Engaget.com on June 13, an interview with an Apple representative revealed that the company has “not yet announced whether or not that [being able to purchase the new iPhone without the two year commitment] will be offered.” This statement begs the question: do consumer’s really have a choice?

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A study conducted in March and April 2008 by Pike & Fischer was released this week. The study surveyed 280 communications executives, engineers, and consultants in the cable, satellite, and technology industries asking about what they thought of the positions of each of the presidential candidates in relation to the communications industry and showed that 50.5% of communications executives are either "unfamiliar or unhappy with the telecommunications policies" of both presidential candidates.

Additionally, 40% of the respondents said that they do not even know what the candidates' policies are. The survey showed that the industry professionals are "wary about the ability of any of the presidential candidates to develop sound policies on such issues as broadband availability and media ownership." However, even though industry executives and professionals may be unfamiliar with the respective views of Senators Obama (D-IL) and McCain (R-AZ) on important industry issues, in fact, both candidates have taken strong positions on major issues such as media ownership, net neutrality, intellectual property protection, and patent system reform.

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The Federal Communications Commission announced further details on a public hearing on early termination fees that will be hosted Thursday, June 12, 2008, from 10:00 a.m. through 1:30 p.m., in the Commission Meeting Room (TW-C305).

Posted By Greg Taylor In All Articles , Telecom Comments 0 Continue Reading Permalink

Carrier agreements are intended to set forth the terms and conditions under which resellers purchase the essential commodity of their business: telecommunications services. Sadly, however, it is a rare instance when the reseller has read or truly understands the essential terms and conditions of its agreements. Even more troubling is the fact that few resellers use their agreements to facilitate their business interests and to protect themselves against undue risk. As a result, rather than being a roadmap to success and a shield against risk, carrier agreements often become minefields through which resellers unwittingly wander until the inevitable misstep is made and damage is done.

While it never is possible to eliminate all risk, it is possible to disarm many of the land mines found in carrier agreements and to identify and map the remaining land mines so they can be avoided where possible. With knowledge and care, it also is possible to anticipate where explosions are most likely to occur and to limit the injury to a reseller's business.

Contract land mines take many forms and are found in all types of telecom agreements. The following is a list of contract land mines where particular caution is required.

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Washington, DC: Based on briefs and oral arguments presented by Technology Law Group, a judge in the federal District Court for the District of Maryland ruled today that distributors selling prepaid cards may be the lawful agents of the carrier supplying the underlying telecommunications services. The significance of this ruling is that it means that the supplying carrier may be held legally liable for the breach of contract, tortious conduct or other unlawful acts of their distributors and for the damages that result.

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Telecom companies originating and doing business in emerging markets are seeing record profits and have obtained record numbers of subscribers. Currently, the telecom industries in China, India, and South Africa are undergoing major changes. For example, China has announced that it will consolidate its six biggest companies into three. MTN, a telecom company from South Africa, which had planned to merge with India’s Bharti Airtel, now plans to merge instead with Reliance Communications, a major India telecom company.

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Washington D.C., Traditional landline phones continue to decline in use and are being replaced with wireless or Voice over Internet Protocol (VoIP) services, as reported in USA Today's May 14, 2008 edition. A report conducted by the National Center for Health Statistics ("NCHS") found that 1 in 6 (i.e., 15.8%) homes in the U.S. "had only wireless telephones during the second half of 2007, up from 6.1% during the same period in 2004." NCHS also reports one in eight homes (i.e., 13.1%) receive all or most of their calls on their wireless phones even though they had a landline in their house.

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In America, the contract is a fundamental and indispensable part of our culture and business life. Virtually no significant business transaction is consummated without the execution of a contract. The enforceability, indeed the "sanctity" of the contract, is at the very heart of the capitalist system. In the telecommunications world, however, the contract has long had a diminished and subservient role. Under Section 203 of the Communications Act of 1934 as amended, 47 U.S.C. 203, all common carriers are required to file tariffs showing "all charges" for the "interstate and foreign wire or radio communication services" that they provide as well as "the classifications, practices, and regulations affecting such charges." In addition, Section 203 declares it unlawful for any carrier to "demand, collect or receive a greater or less or different compensation" for such communication services.

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Telecommunications companies, like other technology-related ventures, often base their businesses on the unique and proprietary nature of their business ideas, processes, products and services. Indeed, it is these proprietary products and services that allow many telecommunications businesses to stake out a niche in the marketplace and to distinguish themselves from the multitude of competing service providers. Yet, despite the importance of these ideas, processes, products and services to the success of their businesses, many telecommunications companies do not take the steps necessary to protect themselves against copycats lying in wait to steal such "intellectual property" from them, thus gaining access to the market niche they have so carefully developed.

In most cases, they need not let this happen. Service providers can protect their company's intellectual property by obtaining appropriate patent, trademark and copyright protection. This article briefly explains each type of protection, the matters to which they apply, how to determine if protection is needed and, if it is, the steps necessary to obtain such protection.

Posted By Susan Colman In All Articles , Intellectual Property Comments 0 Continue Reading Permalink

Washington, D.C., The Federal Communications Commission ("FCC") announced on May 8, 2008 its plan to collect $312,000,000 in regulatory fees during fiscal year 2008. The regulatory fees collected are used "to fund the Commission's operations," and will be collected in August-September 2008. The Commission is encouraging filers to pay their fees electronically.

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In the telecom world, perhaps more than any other, a company's regulatory status may be determined as much by how the company describes itself as by how it operates.

Providers of voice-grade services often are regulated, while providers of "enhanced services" may not be. Resellers often are regulated; distributors generally are not.

Despite the enormous consequences these differences can have on the manner in which telecommunications businesses are operated and on their profitability, very few such businesses take the time to consider these issues when determining how they will describe and operate their business.

Even more troubling, perhaps, is that many companies' agreements fail to properly reflect the manner in which they actually do business. So, before you step into the regulatory abyss or enter into business relationships with your suppliers and customers, it is critical to consider carefully how you describe your operations, why you operate in the manner you've chosen and whether your business could operate in a way that would limit your regulatory exposure or allow you to enter into other lines of business with a minimum of cost and delay.

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The Federal Communications Commission (“FCC”) released a Notice of Proposed Rulemaking (“NPRM”) December 4, 2007, seeking comments from interested parties on the question of whether to amend the FCC’s Telephone Consumer Protection Act (“TCPA”) and more specifically, the extension of the National Do-Not-Call Registry registrations.

Posted By Greg Taylor In All Articles , Telecom Comments 0 Continue Reading Permalink

Traditional 9-1-1 service used caller ID in order to know where a caller is located. However, with the advent of mobile technology, specific identification of a caller’s location is much more difficult. Triangulation, using three cell phone towers to approximate a caller location, only gives an approximation of location. This approximation may be 30 or more miles in range.

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Washington, D.C., March 1, 2006 - In the wake of growing concerns among customers about the safety of their private information - termed CPNI ("customer proprietary network information") - kept or accessible by telecommunications carriers, the FCC is revisiting with renewed vigor the need for tougher privacy rules governing the handling of CPNI by carriers.

Posted By Alexandre B. Bouton In All Articles , Telecom Comments 0 Continue Reading Permalink

Washington, DC., April 17, 2006. The Inernet has apparently hit the big-time. The days of a free, unregulated Internet are at risk of becoming a relic of the past as we (unknowingly) surfed into treacherous waters of bit discrimination; so much so that the House Subcommittee on Telecommunications and the Internet is considering introducing drafted legislation in a bill likely to be titled, the "Communications Opportunity, Promotion and Enhancement Act of 2006," or COPE in the current session. If enacted, the proposed legislation establishes, among other things, the assurance of net neutrality.

Posted By Greg Taylor In All Articles , Internet Comments 1 Continue Reading Permalink

Washington, DC, April 5, 2006. The Federal Election Commission (FEC) announced this month that political blogs will remain (relatively) free from regulation. The FEC voted unanimously to exempt Internet sites, and blog sites in particular, from regulation citing Congress's "conscious, informed judgment" (their words, not ours) that "the Internet should not be subject to the many restrictions that McCain-Feingold (the act that regulates political campaign activity) applies to other types of mass communications."

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Washington, DC, February 17, 2006. To say the telecom industry is undergoing significant change may just be the understatement of the year. But perhaps the underlying facts in support of this not-so-profound observation make for interesting discussion. The recent AT&T-SBC merger, coupled with the prior RBOC mergers over the past ten years bring to mind the well-worn cliché "déjà vu all over again."

Posted By Greg Taylor In All Articles , Internet , VoIP Comments 0 Continue Reading Permalink

Fewer than twenty five years after the Consent Decree, we are returning to a telecommunications marketplace dominated by an ever shrinking number of major players. These players, and the Baby Bells in particular, control an ever greater share of the telecommunications marketplace, both local and long distance, and the smaller players, who stimulated much of the growth and innovation in the industry over the past several decades-and most significantly since the 1996 Telecom Act implementing local competition-are being forced out of the market.

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