Mobile Device Privacy Inquiry Comment Deadlines Set by FCC

By J. Bradford Currier and Marc Martin

Interested stakeholders may now file comments on the Public Notice recently released by the Federal Communications Commission relating to safeguarding Customer Proprietary Network Information on mobile devices. As we reported previously, the Public Notice seeks information on a number of privacy issues, including the types of customer information collected by wireless service providers, the steps that should be taken by wireless service providers to secure such data, and the scope of wireless service providers’ obligations relative to the device manufacturer or software developer.

The Federal Register notice states that comments on the Public Notice must be filed by July 13, 2012, and reply comments must be filed by July 30, 2012.

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FCC Seeks Comment on Mobile Phone Privacy Protections

By J. Bradford Currier and Marc Martin

The Federal Communications Commission recently released a Public Notice seeking comment on, among other things, how mobile wireless service providers safeguard customer information stored on user devices. The Public Notice was accompanied by an FCC Staff Report, discussing the privacy issues presented by location-based mobile applications, which collect and transmit information about a user’s physical location to the service provider in order to provide real-time services. The Public Notice requests comment on the types of customer information collected by wireless service providers, the steps that should be taken by wireless service providers to secure such data, and the scope of wireless service providers’ obligations relative to the device manufacturer or software developer, as set forth below.

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Myspace and FTC Agree to Privacy Consent Order

By J. Bradford Currier

Social networking site Myspace has agreed to a proposed consent order with the Federal Trade Commission which provides for independent privacy audits for 20 years. The FTC alleged that Myspace made their users’ unique identifiers, known as “Friend IDs,” available to advertisers despite its privacy policy promising that the company would not share users’ personally identifiable information without first giving notice to users and receiving their consent. 

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FCC Revises USF High Cost Loop Support Methodology

By Marty Stern and J. Bradford Currier

Rural carriers will soon experience changes to their high-cost loop support (“HCLS”) through the Universal Service Fund (“USF”) under a revised methodology recently announced by the FCC’s Wireline Competition Bureau. HCLS provides close to $800 million annually to offset the capital and operating costs of carriers serving rural populations. The Bureau Order finalizes the so-called “Quantile Regression Analysis” methodology proposed in the FCC’s USF/ICC Reform Order, which imposed limits on carriers’ support by first comparing spending among “similarly situated” companies in order to set benchmarks and then reducing the carriers’ support levels if they exceed such benchmarks. The USF/ICC Reform Order sparked heated debate and reaction, and numerous USF stakeholders filed comments with the FCC challenging aspects of the HCLS methodology and implementation of the support reductions.

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Supreme Court Permits TCPA Lawsuits in Federal Court

By David A. Tallman 

The Supreme Court has conclusively determined that private plaintiffs may bring Telephone Consumer Protection Act (TCPA) claims in federal court, resolving a conflict among the federal circuit courts of appeal. On January 18, 2012, in Mims v. Arrow Financial Services, the Court held that both federal and state courts have jurisdiction to hear private rights of action under the TCPA.

The TCPA and its implementing regulations place various restrictions on automated telephone calls and telemarketing calls, including limitations on calls to wireless numbers using an automated telephone dialing system or an artificial or prerecorded voice, placing artificial or prerecorded messages to residential telephone numbers, sending unsolicited faxes, using an automated dialing system to engage multiple business lines simultaneously, and making telemarketing calls to telephone numbers on national or company-specific Do-Not-Call lists. The TCPA permits individuals and state authorities to bring private rights of action to recover actual and statutory damages and also authorizes administrative enforcement by the FCC.

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FTC Settles First Privacy Case Involving a Mobile Application

By Samuel Castic

The FTC announced a consent decree and order on Monday settling the civil action that was commenced against W3 Innovations, LLC, and Justin Maples—the entity and person respectively behind the Broken Thumbs Apps brand—for alleged violations of the Children’s Online Privacy Protection Act (“COPPA”). Broken Thumbs Apps developed Apple Store Apps including Emily’s Girl World, Emily’s Dress Up, Emily’s Dress Up & Shop, and Emily’s Runway High Fashion, which were collectively reported to have more than 50,000 downloads. The FTC announcement indicated that this is the FTC’s first case involving mobile applications, or “apps.”

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House Committee Launches Data Security and Electronic Privacy Review

In the wake of recent high-profile data breaches suffered by major companies that exposed over 100 million customer records to identity theft, the House Energy and Commerce Committee announced plans to conduct a sweeping review of the data security and privacy issues affecting American consumers and businesses. The Committee will divide the review into two phases by first surveying current security measures used to protect personal information online before turning to bolstering privacy protections for Internet users. Committee Chairman Rep. Fred Upton (R-MI) noted that the recent rise in cyber attacks seeking access to personal data necessitates a reassessment of the security standards used by companies that collect customer information. Communications and Technology Subcommittee Chairman Rep. Greg Walden (R-OR) echoed Sen. Upton’s concerns and stated that the review aims to produce policies which will strike a balance between protecting consumer information and maintaining innovation.

The Committee’s review will likely serve as a launching point to evaluate existing cybersecurity proposals and develop new data protection legislation. In April, Sen. John Kerry (D-MA) and Sen. John McCain (R-AZ) introduced the “Commercial Privacy Bill of Rights Act” to establish federal consumer privacy protections that would apply across industry sectors and level stiff civil penalties against companies that mishandle or lose customer information. To protect the privacy of young social media users, Rep. Joe Barton (R-TX) and Ed Markey (D-MA) proposed the “Do Not Track Kids Act,” which would establish a “Digital Marketing Bill of Rights for Teens,” require companies to erase personal information upon request, and prohibit the storage of user geolocation data. The storage of geolocation data garnered recent media attention following reports that Apple’s iPod and iPad operating systems tracked user movements through a software “bug” which the company later removed. States such as California have also attempted to force social media providers to afford customers more control over their online privacy settings, facing staunch opposition from many major Internet companies.

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Apple Investigated by European Privacy Authorities for Tracking Bug

By Dr. Sascha Pres and Dr. Tobias Bosch

Government authorities in France, Italy and Germany are scrutinizing Apple after a report indicated that Apple iPhone and iPad devices are tracking and storing geolocation information and data regarding the time of visits of end users. The devices gathered the information through the use of Wi-Fi hotspots and cell towers around the end users' current location and then generated an unencrypted file named "consolidated.db" that contained all the information on the device.

In reaction to this report, Apple released a Q&A addressing these issues. According to the Q&A, geolocation data from Wi-Fi hotspots and cell towers was collected due to a bug in its operating software iOS 4. Apple fixed the tracking bug through the latest iOS 4.3.3 update released on May 4, 2011. The update reduces the size of the location database cache and will now store end users’ location data for approximately a week instead of the year's worth of data stored prior to the update. The location database will no longer be stored on iTunes and the database will be fully deleted when the end user turns off the device's location services. 

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No Group Hugs: The Supreme Court Says "Yes" to Class Action Arbitration Waivers

By Andrew Glass and Robert Sparkes III

The Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion continues the Court’s string of arbitration decisions bringing greater clarity to what has been a cloudy subject.  In this decision, the Court addresses the question of whether businesses can enforce class action waivers in their consumer arbitration agreements, answering unequivocally “yes.” Indeed, the decision is an important victory for businesses, and is likely to help businesses avoid the costs of what are more often than not meritless class lawsuits. 

The Concepcion decision finds its roots in the Court’s recent decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corporation. There, the Court established the principle that parties cannot be forced to submit to class-wide arbitration unless they have actually agreed to do so. In Stolt-Nielsen the Court did not have the occasion to address whether parties can expressly waive arbitration on a class-wide basis. Now, applying Stolt-Nielsen to express class action arbitration waivers, Concepcion finds the Federal Arbitration Act (FAA) invalidates state law aimed at barring such waivers. State law is preempted by the FAA where it presents “an obstacle” to accomplishing Congress’s objective of promoting the efficiency of arbitration.            

The telecommunications, consumer credit and finance, and sales industries, as well as other businesses that offer consumer services, are likely to benefit from the lower costs of individual arbitration. AT&T contends that consumers will also benefit from the streamlined procedures offered by arbitration.

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Restrictive Website Rules Found to Be Anticompetitive

By Scott M. Mendel and Michelle S. Taylon

In Realcomp II, Ltd. v. FTC (6th Cir. April 6, 2011), the Sixth Circuit upheld the Federal Trade Commission's conclusion that Realcomp, a Detroit area multiple listing service, violated Section 5 of the Federal Trade Commission Act by adopting rules restricting the ability of its broker members to advertise discounted brokerage services. While none of Realcomp’s website restrictions eliminated discount brokerage services or information regarding such services, they made such information less accessible and more costly to obtain. That was enough for the court to conclude that Realcomp’s policies had an actual anticompetitive effect based on the decline in the share of listings accounted for by discount listings.

The Realcomp decision can have significant implications for businesses, especially joint ventures, considering rules that restrict the information that can be disseminated over their websites. Rules that prevent, restrict, or make more costly the dissemination of information relating to discounted services must be reviewed carefully to determine their potential for anticompetitive effects.  

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FCC Launches Proceeding to Review AT&T Acquisition of T-Mobile and Answers Questions

Today the FCC announced the opening of a docket and the issuance of a protective order related to AT&T's proposed acquisition of T-Mobile USA. Presentations by interested parties before the FCC will be exempt from the agency's ex parte procedures until the applications seeking FCC approval are filed. When filed, ex parte communications before the FCC must follow the "permit but disclose" ex parte procedures applicable to non-restricted proceedings, although it reserved the right to treat the proceeding as restricted.

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Senators McCain and Kerry Introduce Privacy Bill of Rights

On April 12, 2011, Senator John Kerry (D-MA) and Senator John McCain (R-AZ) introduced the “Commercial Privacy Bill of Rights Act of 2011” to establish the first federal statutory baseline of consumer privacy protection that would apply across industry sectors. The bill would govern how customer information is used, stored, and distributed online. We will provide more analysis soon, but for now, here are the highlights:

Information covered. The bill applies to broad categories of information, including names, addresses, phone numbers, e-mail addresses, other unique identifiers, and biometric data when any of those categories are combined with a date of birth, place of birth, birth certificate number, location data, unique identifier information (that does not, alone, identify an individual), information about an individual’s use of voice services, or any other information that could be used to identify the individual.

Right to security and accountability. Information-collecting entities would be required to implement security measures to protect user information and would be prohibited from collecting more individual information than is necessary “to enforce a transaction or deliver a service requested by that individual,” subject to certain exceptions.

Privacy by design. Entities would be required to implement privacy by design concepts, which would require entities to incorporate privacy protection into each stage of product or service development in a manner that is much more comprehensive than previously required anywhere in the United States.

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U.S. Justice Department Raises Concerns Regarding Proposal to Limit Federal Government's Access to 'Cloud' Data

By Oded Green

On April 6, 2011, the Senate Judiciary Committee held a hearing regarding a proposed update to the Electronic Communications Privacy Act (ECPA) in light of cloud computing and other technological developments that have occurred since the statute was enacted more than two decades ago. The ECPA is comprised of three laws -- the Wiretap Act, the Stored Communications Act, and the Pen Register Act -- which govern when certain parties, including law enforcement and other governmental authorities, may access communications and related data and to whom they may disclose those communications and data.

According to Senate Judiciary Committee Chairman, Patrick Leahy, with the explosion of cloud computing, social networking sites and other new technologies, determining how to bring ECPA into the digital age is one of Congress’ greatest challenges. He added that ECPA is “hampered by conflicting standards that cause confusion for law enforcement, businesses and consumers." For example, the content of a single e-mail could be subject to as many as four different levels of privacy protections under ECPA, depending on where it is stored, and when it is sent.

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Retransmission Consent Examined in Heated, Live Webcast Debate Among Broadcast, Cable, Programming, and Consumer Interests

A live webcast last week carried on Internet TV channel Broadband US TV examined all sides of the debate on whether rules governing the grant of retransmission consent by local broadcast stations to cable operators, DBS providers, and other multichannel video programming distributors (MVPDs), should be reformed.

Retransmission consent negotiations have become quite contentious in recent years, at times resulting in the temporary blackout of a local broadcast station in the face of an impasse between the MVPD and broadcaster.

The lively and, at times, raucous debate featured Toni Cook Bush of Skadden, Arps and John Hane of Pillsbury Winthrop Shaw Pittman for broadcasters, Ross Lieberman of the American Cable Association and Cristina Pauze of Time Warner Cable for cable operators, Gigi Sohn of Public Knowledge for consumer interests, and Richard Waysdorf, of Starz Entertainment for independent programmers. The program was moderated by Broadband US TV co-hosts Marty Stern of K&L Gates and Jim Baller of the Baller Herbst Law Group.

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House Votes to Overturn FCC's Net Neutrality Order

In a setback to one of the FCC’s key policy proposals, the House of Representative today voted in favor of a Resolution of Disapproval under the Congressional Review Act aimed at invalidating the Commission’s Net Neutrality Order adopted late last year. The vote follows months of heated industry and Congressional debate, including sharply partisan debate  about the Resolution’s merits, court challenges brought by wireless carriers, and procedural delays in bringing the Resolution to the House floor. While the Resolution seeks to overturn the FCC’s new anti-blocking, network management transparency, and traffic discrimination rules, it faces an uphill battle to become law. The Resolution would need to get passed by the Democrat-controlled Senate and get signed by the President. The White House recently said it plans to veto any measure overturning the FCC's Net Neutrality Order.

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FTC Continues to Flex Its Enforcement Muscle With Regard to Social Media Promotional Activity

by Ann M. Begley, Lawrence C. Lanpher and Carolina M. Heavner

The Federal Trade Commission’s (“FTC”) recent action against a company and its owner in connection with the allegedly deceptive promotion of music teaching tools signals FTC’s continued intention to keep social media promotional activity as an enforcement priority. In its third public investigation and second enforcement action since issuing its revised Guides Concerning the Use of Endorsements and Testimonials in Advertising[1] (hereafter, FTC Endorsement/Testimonial Guides) in December 2009, FTC continues to expand advertisers’ responsibility to monitor third party interactive media communications containing endorsements of advertisers’ products.

In finding the advertiser and its owner, an individual, responsible for assuring that endorsers adequately disclose any material connections with the advertiser, FTC states that an advertiser agreement that requires endorsers to comply with FTC guidelines and disclosures is insufficient in the absence of an advertiser monitoring program that ensures clear and prominent disclosure of the relationship with the advertiser.[2]

Thus, in addition to a $250,000 penalty against the company and its owner, FTC has required a far-reaching monitoring program – a potentially expensive and burdensome commitment for the future.

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FCC Adopts New Data Roaming Rules to Promote Mobile Broadband

by Brendon P. Fowler

On April 7, 2011, the FCC voted 3-2 to require mobile broadband operators to offer data roaming arrangements to other providers. Such arrangements allow consumers with mobile data plans to remain connected by utilizing another network while roaming outside their own provider’s network coverage. Conceptually, the data roaming rules are related to those already established for voice roaming, and Chairman Genachowski tied the Commission’s present action to its prior efforts to develop "automatic" voice roaming and nationwide voice services. Analysts believe that the decision will benefit companies like Sprint Nextel Corporation and MetroPCS Communications Inc. at the expense of AT&T and Verizon Wireless by allowing smaller competitors onto the networks owned by larger rivals, and by enabling smaller carriers to offer more broadband services.

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Court Dismisses Appeal Against FCC's Net Neutrality Rules

Today the FCC prevailed in the continuing skirmish over Net Neutrality in Washington. The U.S. Court of Appeals for the District of Columbia dismissed the lawsuits filed last January by Verizon and Metro PCS seeking to overturn the FCC’s Net Neutrality order adopted in December. The court found that the two wireless carriers filed their challenges too early and should have waited until the Net Neutrality order was published in the Federal Register. Both wireless carriers have indicated they will re-file their appeals.

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Doing Business in Mexico? It's Time to Revise Your Privacy Practices

By Holly K. Towle, Henry L. Judy, Samuel R. Castic

On July 6, 2010, Mexico’s “Law on the Protection of Personal Data Held by Private Parties” took effect, and some of the most stringent requirements are currently scheduled to take effect in July 2011.  Accordingly, the time for companies that are covered by the law to adjust their privacy policies and business practices is today, not mañana.[1]   In many ways, this law is more robust than approaches taken to data protection in the United States.  It brings Mexican privacy law far closer to, or goes beyond, the concepts and structure of the European Data Protection Directive (“EU Directive”)[2] or other approaches such as the Canadian Personal Information Protection and Electronic Documents Act.[3]   The law also seems to approximate the European Union approach of treating data protection as a basic right.[4]   This Alert discusses some of the key provisions of Mexico’s new law.

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House E&C Committee Schedules Markup of Resolution to Reject FCC's Net Neutrality

Yesterday the Communications and Technology Subcommittee of the House Energy and Commerce adopted a disapproval resolution (H.J. Res. 37) of the FCC's 2010 Net Neutrality Order by a party-line vote. Today, the Energy and Commerce Committee issued a markup notice for the disapproval resolution of Monday, March 14 at 3:00 p.m. Assuming it is approved that same day (a likely outcome), it could be ready for House floor action fairly quickly (depending on the legislative priorities of the House majority leadership). 

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Will Broadcasters Have Incentive to Contribute Spectrum for Wireless Broadband?

By Marc S. Martin and Martin L. Stern

With demand for wireless Internet access predicted to increase exponentially over the next few years, the debate over the FCC’s proposal to free up large amounts of broadcast spectrum through “incentive” auctions pits television broadcasters against other industry sectors and the Administration in a heated regulatory and legislative battle over the future of broadcast television and mobile broadband.

Under the National Broadband Plan, the FCC set a goal of redeploying 500 MHz of spectrum for mobile broadband use by 2020, recommending that 120 MHz come from the broadcast television bands. The Commission’s National Broadband staff set their sights on television broadcasters after concluding that much of the 6 MHz currently allocated to television stations remains underutilized following completion of the digital transmission transition in  2009, with only 15% percent of U.S. households reliant on over-the-air transmission for their reception of television programming. Additionally, estimates place the value of wireless spectrum at $1.28 per MHz per person, compared to 11 to 15 cents per MHz for television spectrum. In response to this value gap, FCC officials propose that television broadcasters participate in voluntary auctions of some or all of their spectrum, with broadcasters receiving a portion of the proceeds as an incentive to vacate their spectrum. The thought is that some broadcasters may welcome the prospect of trading in their spectrum for cash. As part of this proposal, the FCC would also oversee the “repacking” of the spectrum, moving broadcasters (potentially including those who chose not to give up their spectrum) to fewer adjacent channels and potentially placing two or more broadcasters on a single 6 MHz channel. The theory is that the repacking process would free-up significant swaths of broadcast spectrum for wireless broadband use by the winning bidders. The Obama Administration hopes the auction and reallocation processes will mark the first step towards fulfilling the President’s recent pledge to extend high-speed wireless access to 98% of Americans, while putting billions in auction revenue in the public coffers.

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Net Neutrality Supporters Delay House Subcommittee Vote to Reverse FCC Rules [UPDATED: 3/7/11]

In response to a request by House Democratic supporters of the Federal Communications Commission's Open Internet (or Net Neutrality) order, the House Energy and Commerce Subcommitee on Communications and Technology has postponed its vote, scheduled for this morning, on the resolution to reverse the FCC order.  Although no new date has been announced, we understand that a hearing will likely be scheduled for next week.

Yesterday, Energy and Commerce Committee ranking member Henry Waxman (D-CA) and Rep. Anna Eshoo (D-CA), the ranking member on the Communications and Technology Subcommittee, wrote to Communications and Technology Subcommittee Chairman Greg Walden (R-OR) urging him to first hold hearings on the proposed resolution of disapproval under the Congressional Review Act in which supporters of the FCC's order could be heard before having the vote.  Note that even if the House approves the resolution of disapproval, it must still pass the Senate and survive a presidential veto to successfully reverse the FCC's order.

UPDATE: A hearing has been scheduled for March 9, at 10:30 a.m. in 2123 Rayburn House Office Building.

SECOND UPDATE (3/7/11): Representatives Waxman and Eshoo sent a letter on behalf of a group of net neutrality supporters in the House asking Chairman Walden and Rep. Fred Upton (R-MI), Chairman of the Energy and Commerce Committee, to allow lawmakers to offer amendments to the resolution of disapproval. The Democrats requested the Chairmen bring the disapproval measure as a regular House Resolution instead of under the Congressional Review Act.

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High Court to AT&T: Don't Take It Personally, But You Have No "Personal Privacy"

By Bruce Nielson.

The U.S. Supreme Court recently held that AT&T and other corporations do not have “personal privacy” for purposes of an exemption from the information disclosure requirements of the Freedom of Information Act (“FOIA”). In its unanimous opinion in FCC v. AT&T Inc., the court rejected “the argument that because ‘person’ is defined for purposes of FOIA to include a corporation, the phrase ‘personal privacy’ in [FOIA] Exemption 7(C) reaches corporations.” The court held: “The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations.”

The AT&T case arose in connection with an FCC investigation into whether AT&T overcharged the government for services rendered in connection with an FCC-administered program designed to enhance access to information and telecommunications services by schools and libraries. During the investigation, AT&T provided documents to the FCC that included information about employees involved in the program and invoices and emails with pricing and billing information. The FCC and AT&T resolved the matter in 2004.

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States Support Additional Federal Consumer Information Privacy Protections

By Bruce Nielson and Samuel Castic

Fifteen state attorneys general recently sent a letter to the FTC supporting its recent proposal for a federal regulatory framework to protect the privacy and security of consumer information. The letter also recommends additional consumer information privacy and security protections that go beyond the FTC’s proposal. The FTC’s proposal, in the form of a preliminary FTC Staff Report entitled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers” (the “Report”) was released on December 1, 2010 and is described in more detail in a prior blog entry.

The 15 state attorneys general – from Arizona, Illinois, Indiana, Iowa, Massachusetts, Montana, Nevada, New Mexico, New York, North Dakota, Rhode Island, Tennessee, Vermont, Virginia and Washington (the “States”) – make the following points in their February 18, 2011 letter to the FTC:

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The Comcast/NBCU Merger Conditions: Hedges Against an Uncertain Future

On January 18, 2011, the Federal Communications Commission granted its approval to the acquisition by Comcast, the nation's largest cable service operator and cable modem Internet access provider, of NBC Universal, Inc. (NBCU), the owner of the broadcast television network, several cable networks, Internet websites, and a leading Hollywood studio. The merger should fundamentally affect the businesses of programming, production and distribution across many platforms, including broadcast television, cable, online, and film. With significant control over both content and its distribution, the Comcast/NBCU merger created a potential incentive for the combined firm to raise prices and limit access to its programming to the disadvantage of its broadcast and online rivals. Working in coordination with the Department of Justice’s Antitrust Division, the FCC imposed a number of “targeted” conditions aimed at ameliorating the merger’s potential harms and quashing impending antitrust suits from states such as California. The Commission highlighted four key conditions to the government’s approval:

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The FCC's Net Neutrality Order: Substance and Status for Mobile Wireless Broadband

On December 21, 2010, a divided Federal Communications Commission adopted its long-awaited, but highly controversial, Preserving the Open Internet order (“Order”), which requires broadband service providers to treat all web traffic equally and protect open access to the Internet for web consumers and other stakeholders. While Congressional and industry opposition continues to ferment, a closer look at the Order reveals that mobile wireless broadband providers will retain considerable flexibility in how they manage their networks when compared to their fixed provider counterparts. 

The Order focused on three primary goals underpinning the Commission’s net neutrality policy: 1) transparency 2) no blocking and 3) no unreasonable discrimination. For “transparency,” both fixed and mobile providers must publicly disclose the network management practices, performance, and commercial terms of their broadband services. By contrast, the application of the “no blocking” condition differs depending on the type of provider. Fixed providers are subject to a broad obligation to not block lawful content, applications, services, or non-harmful devices. Mobile wireless providers are subject to a narrower obligation to not block lawful websites and applications that compete with the provider’s voice or video telephony services. Most importantly, the Order’s “no unreasonable discrimination” provision applies solely to fixed providers, leaving mobile operators free to favor or disfavor certain types of network traffic. According to the Commission, these new rules for mobile wireless providers will not harm customers because most consumers have more choices for mobile wireless service than for fixed broadband. The Commission also noted favorably the mobile industry’s recent moves towards openness, including the introduction of open operating systems like Android. As a result, when the rules finally go into effect, mobile wireless broadband providers will be exempt from the obligation to manage network traffic in a nondiscriminatory manner.

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K&L Gates Global Government Solutions Report Includes Articles on Key TMT, Privacy and Patent Developments

K&L Gates recently published its Global Government Solutions 2011 Annual Outlook, which contains articles from around the firm on key governmental developments expected in 2011.

The Annual Outlook includes an article addressing developments affecting the Telecom, Media and Technology sector in 2011 by DC partners Marc Martin and Marty Stern, noting that the TMT sector enters 2011 with significant regulatory uncertainty and the FCC facing an uphill battle on many signature regulatory initiatives.

The article reviews the FCC’s net neutrality order and the challenges it faces in court and on Capitol Hill, discusses the recent FCC and Department of Justice approvals of the Comcast/NBCU transaction, and a number of additional issues getting significant focus in 2011. These include retransmission consent battles between broadcasters and cable/DBS providers and the FCC’s expected rulemaking proceeding on this issue, the Commission’s implementation of new communications accessibility requirements under the new 21st Century Communications and Video Accessibility Act, and continued efforts to reform the Universal Service Fund and make it broadband-centric.

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Wittow authors new article on Cloud Computing

 Seattle partner Mark Wittow recently authored an article on cloud computing legal issues, specifically examining recent cases involving cloud computing issues and describing new types of claims that likely will arise as a result of the increased importance of internet-based connectivity (in contrast to desktop or local network-based resources) to provide all types of computing needs and related services. The article "Cloud Computing: Recent Cases and Anticipating New Types of Claims"  appears in the January 2011 issue of The Computer and Internet Lawyer.

Mark's article explains how cloud computing, as a leading means of digital distribution, has created new types of business models, which in turn have led to unique legal issues. Cases relevant to cloud computing arise in a variety of areas of law, including contracts, copyrights and privacy.

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FTC Proposes Broad New Privacy Framework, and Asks "How It Might Apply in the Real World"

by Henry L. Judy (Washington D.C.), Holly K. Towle (Seattle), Samuel R. Castic (Seattle), Jonathan D. Jaffe (San Francisco).

On December 1, 2010, the FTC released a preliminary staff report entitled “Protecting Consumer Privacy in an Era of Rapid Change” that has the potential to materially change the privacy obligations of all businesses in the United States. The staff report poses important policy choices regarding who controls data and what information will freely flow in the United States. It proposes a broad privacy framework and articulates a number of new and strengthened data privacy obligations that are almost certain to increase business compliance costs and potential litigation. 

While the staff report is only a preliminary recommendation, the final privacy proposal that emerges from the FTC will likely serve as both a guide for future enforcement actions, and as a basis for future legislation. The FTC is accepting comments on its proposed framework until the end of January 2011, and it is strongly recommended that businesses do so if they want to register their concerns before the FTC issues its final privacy framework.

CONTINUE READING

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CALEA II - Bigger and Badder?

Recent leaks to the New York Times, as reported in September and October, indicate that the Obama administration will next year be pushing for sweeping expansions of the Communications Assistance for Law Enforcement Act (CALEA).  CALEA facilitates government surveillance by, among other things, requiring companies subject to the law both to design their systems so that the government can easily plug in and intercept communications in real-time and to provide assistance to the government in these efforts. 

 

A task force comprised of representatives from DOJ, Commerce, the FBI, and other agencies, are discussing amendments to the law.  These changes would greatly expand the reach of CALEA, would significantly increase the costs of non-compliance for covered companies, and would include other requirements which may fundamentally change business models for companies promising encryption and decentralized communication services.    

 

 

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Broadband in America: The Year in Review; What Lies Ahead

K&L Gates co-hosted a live webcast December 22, carried live on Internet TV channels Broadband US TV and National League of Cities TV.

You can access the free webcast by clicking here (free registration is required).

K&L Gates partner Marty Stern joined co-host Jim Baller, together with guests Cecilia Kang, Communications Industry Journalist, the Washington PostGigi Sohn, President, Public Knowledge,  Jeffrey Silva, Senior Policy Director, TMT, Medley Global Advisors, and  Scott Cleland, President, the Precursor Group, for a lively and provocative review of 2010, particularly of the day-old FCC net neutrality decision, and for some bold predictions for 2011.

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New Disability Access Requirements for Advanced Communications and Video

By Marty Stern (Washington, DC), Carol Lumpkin (Miami) and Stephanie N. Moot (Miami).

The President signed the 21st Century Communications and Video Accessibility Act of 2010 on October 8, 2010 (the “ComVid Accessibility Act” or “Act”). The ComVid Accessibility Act expands various disability access requirements to VoIP phones, browser-enabled smart phones, text messaging, Internet-enabled video devices, on-line video of TV programming, TV navigation devices, and programming guides and menus, among other things. 

Karen Peltz Strauss, who has the lead at the Federal Communications Commission (“FCC” or “Commission”) on implementing the ComVid Accessibility Act, appeared on a recent live program on Internet TV channel Broadband US TV and discussed the FCC's "enormous mandate" to implement the new Act.  Click here for a clip of Ms. Peltz Strauss' comments on the program.  (with permission from TV Worldwide).[1]  According to Ms. Peltz Strauss, “Every segment of the industry that has anything to do with broadband, television, including cable, satellite or broadcast, Internet-based television, as well as . . . Internet-based providers, traditionally regulated [telephone] companies, wireless companies” needs to be paying attention to the new Act.   “Virtually every segment that has anything to do with communications or video programming is covered.” 

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Law Seminars International presents Cloud Computing: Law, Risks and Opportunities

On December 13-14, 2010, Law Seminars International presented a seminar exploring different cloud computing service models and the challenges they pose. They explored what cloud computing is, how it works and the benefits it offers.

Leading practitioners, including Dan Royalty (K&L Gates Seattle), described the contracting and compliance challenges their clients face on a daily basis and shared their strategies for meeting them.  Among other things, the program provided pointers on identifying the legal and compliance issues around cloud computing and addressing them in cloud computing transactions.

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Symposium on Broadband Reclassification and Net Neutrality What's at Stake? What's the End Game?

On Thursday, December 2nd, K&L Gates hosted a program on net neutrality and the potential regulatory reclassification of broadband Internet access presented by the ABA Antitrust Section's Communications & Digitial Technology Industries Committee. The program, moderated by Washington, DC partner Marty Stern, included:

  • Parul Desai, Policy Counsel, Consumers Union
  • Neil Fried, Minority Chief Counsel, U.S. House of Representatives Energy and Commerce Committee, Subcommitee on Communications, Technology and the Internet
  • Glenn Manishin, Partner, Duane Morris
  • Lee Selwyn, President, Economics and Technology, Inc.

Audio Archive of event now available (American Bar Association members only) 

Several of the speakers were also authors of articles in the Fall 2010 Broadband Reclassification and Net Neutrality Symposium issue of the Committee's Icarus newsletter.  An article providing an overview of the issue by K&L Gates' partners Marty Stern and Marc Martin, and associate Peter Denton, is available here.  (Posted with permission.)

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The 19th Annual Seattle Conference on Current Developments in Technology Law

December 9-10, 2010 

Washington State Convention Center
Seattle, WA

Online brochure

Presenters: Holly K. Towle
Sponsors: Law Seminars International

As the distinctions between telephone, television and data services disappear, many of the old geographical and functional boxes that used to help us organize our thinking have become irrelevant. Super computing, almost ubiquitous broadband, advanced visualization and large-scale data gathering have created new competitive opportunities on a global scale. They also have unleashed a torrent of fragmented information and the pressing question of what is really valuable.

We now have news aggregation services to manage the torrent, but what are the limits on the aggregator's use of copyrighted material? New social media services have created new marketing opportunities, but also new challenges for managing your online reputation. Distributed computing services are triggering a transition from point-of-sale product licensing to services access subscriptions and long term interactive relationships. New friction points, particularly those involving consumers, are leading to new regulatory requirements for technology companies.

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Live Webcast: Spurring Adoption and Use of Broadband

K&L Gates co-hosted a live webcast October 7, carried live on Internet TV channels Broadband US TV and National League of Cities TV.

You can access the free webcast by clicking here (registration is required).

Stakeholders in America's broadband future disagree on most issues, but not on this: with 35% of Americans not using broadband today and many others not using broadband to maximum advantage, spurring increased adoption and use is critically important to America's success in the emerging knowledge-based global economy.

FCC Commissioner Mignon Clyburn kicked off the program, joining BroadbandUS TV hosts Marty Stern and Jim Baller for a provocative discussion ofthe FCC's goals, activities, and progress in this area.

The program also included a panel on National Policy and Support, featuring Karen Peltz Strauss, FCC Consumer and Governmental Affairs Bureau; Emy Tseng, National Telecommunications and Information Administration; Dr. Kenneth Peres, Communications Workers of America and US Broadband Coalition; Nicol Turner-Lee, Joint Center for Political and Economic Studies; and John Windhausen, Schools, Health and Libraries Broadband Coalition. A second panel featured a look at success stories from around the country.

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Community Broadband - A Blessing or Curse?

A Program of Broadband US TV , TV Mainstream and National League of Cities TV.

K&L Gates co-hosted a special live Hall webcast on Thursday, July 29, that was carried live on Internet TV channels Broadband US TV, TV Mainstream and National League of Cities TV.

To access the recording, please click here (free registration is required in order to access the recording).

The Honorable Rick Boucher, Member of the U.S. House of Representatives for the 9th District of Virginia and Chairman of the House Subcommittee on Communications, Technology, and the Internet, joined Broadband US TV to discuss the community broadband issue, including prospects for enactment of the federal Community Broadband Act. The program, hosted by Marty Stern of K&L Gates and Jim Baller, also included a panel of experts who faced off in a lively, spirited debate on the pros and cons of community broadband, examples of successes and failures, and the political, legal, economic, technological, and social issues posed by community broadband.

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Live Webcast: Community Broadband - A Blessing or Curse?

K&L Gates co-hosted a live webcast July 29, carried live on Internet TV channels Broadband US TV and National League of Cities TV.

You can access this free webcast by clicking here (registration is required).

The Honorable Rick Boucher, Member of the U.S. House of Representatives for the 9th District of Virginia and Chairman of the House Subcommittee on Communications, Technology, and the Internet, joined Broadband US TV to discuss the community broadband issue, including prospects for enactment of the federal Community Broadband Act. The program, hosted by Marty Stern of K&L Gates and Jim Baller, also included a panel of experts who debated the pros and cons of community broadband, examples of successes and failures, and the political, legal, economic, technological, and social issues posed by community broadband.

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FTC Settles with Twitter - More Painful Lessons in Basic Data Security

by Marc S. Martin, Henry L. Judy, Lauren Bergen Pryor

On June 24, 2010, the Federal Trade Commission ("FTC") reached a proposed settlement with the online social networking company Twitter, Inc.[1] ("Twitter") concerning data security breaches that resulted in unauthorized disclosure of users' personal data. While this is the first time that the FTC has held a social network liable for a breach of data security, it is not the first time that the FTC has sanctioned a company for failing to protect its customers' data and personal information.

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FCC Seeks Comment on its "Third Way" Approach to Regulating Broadband Internet Service

by Marc S. Martin, Martin L. Stern, Peter W. Denton

On June 17, 2010, the U.S. Federal Communications Commission (“FCC” or the “Commission”) adopted a Notice of Inquiry (the “NOI”) seeking comment on the Commission’s consideration of the appropriate legal framework for broadband Internet service, and in particular the “Internet connectivity component” of that service.[1]   Comments on the NOI are due by July 15, 2010, with Reply Comments due by August 12, 2010.

The NOI is the latest step in a contentious debate between the Commission and broadband Internet access providers (e.g., cable, telco and wireless broadband providers) over the Commission’s legal authority to regulate broadband Internet service.  As discussed in our previous alerts, on April 6, 2010, the U.S. Court of Appeals for the District of Columbia overturned an FCC enforcement action against Comcast Corporation arising from allegations that Comcast engaged in unreasonable and discriminatory broadband management practices.[2]   The Commission had previously classified Comcast’s cable modem broadband Internet service as a largely unregulated “information service” under Title I of the Communications Act of 1934, as amended (the “Communications Act”), but asserted indirect “ancillary” authority to enforce certain net neutrality guidelines against broadband Internet access providers.  The court in Comcast ruled that the Commission, based on its prior decision classifying cable modem service as an unregulated information service, lacked direct statutory authority to regulate broadband Internet service, and therefore could not rely on its ancillary jurisdiction to do so.

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The Net Neutrality/Open Internet Debate: What's Next, What's the End Game?

K&L Gates co-hosted a special live Hall webcast on Thursday, May 27, that was carried live on Internet TV channels Broadband US TV, TV Mainstream and National League of Cities TV.

To access the recording, please click here (free registration is required in order to access the recording).

Austin Schlick, General Counsel of the FCC, joined BroadbandUS TV hosts Marty Stern of K&L Gates and Jim Baller to discuss the FCC's case for reclassification of broadband Internet access as a regulated telecommunications service. Julius Knapp, Chief of the FCC's Office of Engineering and Technology, who's heading up the FCC Technical Advisory Panel on the open Internet, also joined to discuss technical issues surrounding the open Internet debate.

The program includes two panels of experts who face-off in lively, spirited debate on the political and legal considerations surrounding net neutrality, and the economic/technical case for new net neutrality rules.

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Live Webcast: The Net Neutrality/Open Internet Debate: What's Next, What's the End Game?

K&L Gates co-hosted a special live webcast May 27, from 1:00 - 2:30 pm ET, being carried live on Internet TV channels Broadband US TV, TV Mainstream and National League of Cities TV.

You can access this free webcast by clicking here (registration is required).

Austin Schlick, General Counsel of the FCC, joined BroadbandUS TV hosts Marty Stern of K&L Gates and Jim Baller to discuss the FCC's case for reclassification of broadband Internet access as a regulated telecommunications service. Julius Knapp, Chief of the FCC's Office of Engineering and Technology, who's heading up the FCC Technical Advisory Panel on the open Internet, also joined us to discuss technical issues surrounding the open Internet debate.

The program included two panels of experts who faced-off in lively, spirited debate on the political and legal considerations surrounding net neutrality, and the economic/technical case for new net neutrality rules.

 

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"The Third Way": FCC Proposes New Regulatory Powers Over Broadband Internet Access Services

by Marc S. Martin, Martin L. Stern, Peter W. Denton

The U.S. Federal Communications Commission (the "FCC") recently charted a new legal course to restore its jurisdictional authority to regulate broadband Internet access services, in response to a sharp rebuke from a federal appeals court over the FCC's previous legal theories.

In a move widely covered by the media, seemingly because debate over its enactment mirrors other ideological conflicts over the proper role of government as mid-term elections approach, FCC Chairman Julius Genachowski proposed "reclassifying" the transmission component of broadband Internet access services under the regulatory framework established by the Communications Act of 1934 (the "Act") from a deregulated "information service" under Title I of the Act to a regulated "telecommunications service" under Title II. Rather than subjecting broadband Internet access services to the full panoply of Title II regulatory requirements, however, Chairman Genachowski has proposed a “Third Way,” whereby the FCC would only impose the Title II requirements it deems necessary to implement its targeted policy prescriptions, while forbearing from applying the majority of the Title II provisions.

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Privacy Implications of the FCC's National Broadband Plan

by Marc S. Martin, Martin L. Stern, Peter W. Denton

As we discussed in our recent client alert, the National Broadband Plan (the "Broadband Plan") of the U.S. Federal Communications Commission ("FCC")[1] contains an ambitious set of some 200 recommendations for regulatory and legislative actions to improve the innovation, access, and affordability of broadband Internet service.[2] Tucked among "big-ticket" items that have received much attention in recent weeks – such as reallocation of wireless spectrum and reform of the FCC's Universal Service Fund – are a number of less-heralded suggestions relating to privacy issues and the management of personal data. The implementation of these privacy-related Broadband Plan recommendations by Congress, the FCC, and the Federal Trade Commission ("FTC") could affect a wide range of firms, including broadband Internet access Internet service providers, advertisers, online content providers, and indeed any business with an Internet presence. The purpose of this alert is to provide greater focus and detail on the Broadband Plan's recommendations for privacy regulation.

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Court Overturns FCC's Net Neutrality-Based Decision Against Comcast: What Happens Next?

by Marc S. Martin, Martin L. Stern

On April 6, 2010, the U.S. Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) overturned a 2008 enforcement action by the U.S. Federal Communications Commission (“FCC”) against Comcast Corporation arising from allegations of Comcast engaging in unreasonable and discriminatory broadband network management practices.  This client alert will briefly summarize the court decision, discuss how it will affect the FCC’s efforts to adopt net neutrality rules and implement its recently adopted National Broadband Plan (the “Broadband Plan”),[1] address the potential for Congressional intervention, and explain how other federal and possibly state authorities could step in to fill the apparent void in FCC jurisdiction.

The FCC enforcement action arose from complaints about Comcast’s network management practices, which alleged that Comcast deliberately slowed its subscribers’ use of an online peer-to-peer based file sharing service, BitTorrent, because it presented a competitive threat to Comcast’s own broadband service offerings.  The FCC agreed that Comcast’s network management practices in dispute were inconsistent with the FCC’s Internet Policy Statement that, among other things, supported nondiscriminatory access to Internet-based software applications and services.

At the D.C. Circuit, Comcast made a three-pronged attack against the FCC’s enforcement action, asserting:

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The FCC's Sweeping National Broadband Plan: How it Will Affect You

by Marc S. Martin, Martin L. Stern, Peter W. Denton. March 22, 2010

The U.S. Federal Communications Commission ("FCC") released its congressionally mandated National Broadband Plan on March 16, 2010 (the "Plan"),[1] an ambitious roadmap to meet the goals of improving the innovation, access and affordability of broadband Internet services for approximately 100 million Americans at speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second. Beyond these goals, the Plan also lays out a series of broadband-related goals and recommendations that cut across the nation's economy, addressing such disparate topics as health care, energy utility and transportation infrastructure, education, green energy, a nationwide, interoperable public safety broadband network, ultra-high speed military broadband networks, and greater governmental transparency. A centerpiece policy initiative of the FCC and its new Chairman, and in places a decidedly controversial document, the Plan is the largest undertaking of the FCC, including the contemplated Executive Branch and legislative activity, since the Telecommunications Act of 1996.

While the Plan itself largely focuses on the broad goal of greater access to broadband for consumers and public institutions, the targets set forth in the Plan will require a wholesale reshaping of the regulatory landscape for a diverse set of telecommunications, media, technology, and broader business interests, all of which should closely follow the Plan's implementation.

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Live Webcast: Broadband Stimulus National Town Hall Meeting

A Program of National League of Cities TV & Broadband US TV

K&L Gates co-hosted a special Broadband Stimulus National Town Hall webcast on February 12. To see the webcast from this free event (registration is required) click here.

The second round Notices of Funds Availability (NOFA) for broadband stimulus funds have just been released, with over $4 billion of funding available in the final round. Time is of the essence, with applications due no later than March 15.

To help educate applicants, National League of Cities TV in cooperation with a newly-launched Internet TV channel, Broadband US TV, featured a free live webcast of the Broadband Stimulus Town Hall Workshop. The interactive live workshop  examine what's changed from the first round and what applicants need to know in putting together successful broadband grant and loan applications.

Jessica Zufolo, RUS Deputy Administrator, and Angela Simpson, NTIA BTOP Senior Advisor, joined hosts Marty Stern of K&L Gates and Jim Baller to discuss the most important lessons that RUS and NTIA learned from Round One, what the agencies hope to achieve in Round Two, and what steps applicants should take to enhance their chances of success in the final round.

The program also included a panel of representative first round winners and a panel of broadband stimulus experts, who took questions from the live online audience and provided further insights into strategies that won or lost in Round One, and new approaches that can take maximum advantage of the new Round Two rules.

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National League of Cities TV (NLCTV) Broadband Stimulus National Town Hall Meeting

K&L Gates co-hosted a special live Broadband Stimulus National Town Hall webcast on Friday, February 12, that was carried live on Internet TV channels National League of Cities TV and TV Mainstream, and produced in association with TV Worldwide and BroadbandCensus.com.

To access the recording, please click here (free registration is required in order to access the recording).

The second round Notices of Funds Availability (NOFA) for broadband stimulus funds were released, with over $4 billion of funding available in the final round. To help educate applicants, National League of Cities TV in cooperation with a newly-launched Internet TV channel, Broadband US TV, featured a free live webcast of the Broadband Stimulus Town Hall Workshop. The interactive live workshop examined what's changed from the first round and what applicants need to know in putting together successful broadband grant and loan applications.

Jessica Zufolo, RUS Deputy Administrator, and Angela Simpson, NTIA BTOP Senior Advisor, joined hosts Marty Stern of K&L Gates and Jim Baller to discuss the most important lessons that RUS and NTIA learned from Round One, what the agencies hope to achieve in Round Two, and what steps applicants should take to enhance their chances of success in the final round. The program also included a panel of representative first round winners and a panel of broadband stimulus experts, who took questions from the live online audience and provided further insights into strategies that won or lost in Round One, and new approaches that can take maximum advantage of the new Round Two rules.

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