Customs Duty

GENEVA -- The ITU is lowering expectations for Telecom World 2009 and recasting the event as a top political, telecom and information technology forum to meet pressing challenges and opportunities. Bookings for exhibitors and others are about one-third of forecasts, officials said. The organization is looking for new ways to make up for the shortfall, said Sanjay Acharya, ITU chief of media relations. One idea to cope with smaller budgets is for countries to pool resources and participation, officials said.

AT&T didn’t violate antitrust laws when it set DSL prices high at wholesale and low at retail, the Supreme Court ruled Wednesday. The court reversed an appeals-court decision allowing a “price squeeze” claim against the carrier. Chief Justice John Roberts wrote the unanimous decision in Pacific Bell v. LinkLine. Justices John Stevens, David Souter and Ruth Ginsburg signed on to a concurrence by Stephen Breyer that differed narrowly with Roberts’ opinion.

The Justice Department asked a federal court in Washington to find AT&T in civil contempt of a court order enforcing a 2008 consent decree stemming from the company’s purchase of Dobson Cellular. The department also filed with the U.S. District Court for the District of Columbia a proposed consent decree, agreed to by AT&T, that would require carrier to pay the government $2 million, which includes the cost of a federal investigation, to settle the complaint. DoJ told the court that when AT&T bought Dobson, it agreed to sell mobile-wireless telecommunications businesses in two rural services areas in Kentucky and one in Oklahoma. AT&T agreed to ensure that the divested businesses were operated independently until they were sold. The carrier turned operation in the areas over to a trustee, but management trust accounts were maintained in the same database as Dobson accounts acquired by AT&T, according to a court filing. As a result, AT&T employees were able to access all account information for the accounts, DoJ said. And AT&T didn’t “adequately inform and instruct” its employees and agents of the confidentiality obligations” they had to follow. The company also didn’t track who received guidance or take steps to guarantee that the guidance was read and understood, DoJ said. Without the trustee’s approval, AT&T encouraged customers in the areas to switch their service to that company and waived early-termination fees for those who did. That violated the order, meant to “preserve the value and competitiveness” of the businesses and ensure that AT&T didn’t have an unfair advantage competing for customers under the management trust, the department said. “It is imperative that companies fully abide by their court-ordered obligations in order for our settlements to be effective in preserving competition and protecting consumers,” said Deborah Garza, acting assistant attorney general in charge of the Antitrust Division. An AT&T spokesman said the company takes seriously its duty to carry out consent decree. “As noted in the stipulation, there is no admission or determination of wrongdoing,” the spokesman said. “We felt it was in the best interest of everyone to simply put this matter behind us.”

The FCC must improve administration of the Universal Service Fund, USF payers and recipients said last week in comments on an October FCC inquiry into how it might strengthen USF management, administration and oversight (CD Sept 15 p7). High error rates cited in a 2007 Inspector General audit worry the FCC. Meanwhile, Universal Service Administrative Co. and parent National Exchange Carrier Association urged the FCC to approve a divestiture of USAC from NECA.

National carriers acquiring small carriers will be the trend following AT&T’s late Friday announcement that it will buy rural carrier Centennial Wireless for $944 million cash, analysts forecast. AT&T will assume Centennial’s nearly $1.4 billion in unsecured debt. Meanwhile, Centennial is being investigated for alleged breaches of fiduciary duty and other violations of state law arising from the proposed deal.

Cyren Call warned the FCC in a filing that it can’t stay on as adviser to the 700 MHz Public Safety Trust unless the commission decides how Cyren Call will be paid. Meanwhile, the PSST said implementing rules proposed for the 700 MHz D-block national public safety network would put too great a limit on its role in protecting the interests of users nationwide. It asked for enough money to pay debts it has piled up, including to Cyren Call.

A group of 44 AT&T Mobility customers in Oklahoma sued the company seeking $88 million in federal court. They say an AT&T manager took payments from a private investigator several times in exchange for copies of the customers’ confidential wireless call records. The suit in U.S. District Court in Muskogee alleges that the AT&T manager took money from Adair and Associates to provide copies of a particular customer’s call records for use in litigation between August 2001 and December 2006. The suit (Case 5:08- CV-01123-R) seeks $2 million in damages for each plaintiff on grounds that AT&T failed to design and implement procedures to keep employees from obtaining and distributing sensitive customer information without customer permission. AT&T breached its duty under the Telecom Act to protect customer records, they said. AT&T said an internal investigation “found no evidence to support the allegations in the complaint” and the sale of company records would be a direct violation of company policy.

The duty to prevent identity theft is partly shifting to companies, such as telecom firms and ISPs, that aren’t typically thought of as “creditors” but must comply with new credit transaction rules. Panelists on a USTelecom-hosted webinar said companies that let customers pay after receiving services -- such as ISPs, telephone or cable providers that bill at the end of the month -- and even companies that bill in advance but continue providing service if the customer doesn’t pay on time -- are considered creditors for the purposes of the Fair and Accurate Credit Transactions Act of 2003. They were to have Red Flag policies and procedures in place by Nov. 1, but the FTC granted a six-month reprieve Wednesday because so many companies said that they were unsure how the rules applied to them or that they were unaware of the rules because they usually aren’t covered by FTC regulations and so hadn’t followed the rulemaking. During the webinar, John Kuykendall, director of regulatory affairs at John Staurulakis, Inc., said his company searched in vain for a template or guidebook to help its small clients develop policies. “We concluded there is not [a template]. Because each one of the programs must be specific to each company… those rules are indeed company-specific,” he said. JSI developed a questionnaire to help companies determine which red flags are most likely to pop up in their line of work and how best to handle them, he said. Companies must think about how customers open accounts -- in person, online, on the phone -- and what personal information they collect from customers. Tom Oscherwitz, vice president for government affairs and chief privacy officer at ID Analytics, said companies must also prepare for what happens after the deadline. Developing a policy isn’t enough, he said. They must update policies and procedures periodically, and also think about how to put the rules into practice. ID Analytics performed a study of red flag hit rates and found 33 percent of 700,000 applications received in a 30-day period had an identity theft red flag. There will be lots of false positives, he said, and businesses must handle the red flag hits without slowing down operations to the point of alienating customers. Handling the flags identified in its study could cost between $347,000 and $1.5 million monthly, depending if they're handled interactively or manually, he said. When one in six Americans moves each year, there are sure to be address discrepancies, he said. ID Analytics looked at three data aggregators and found that only 14 percent of the time was a valid address consistent across all three aggregators. In a separate interview, Ed Goodman, general counsel and chief privacy officer for Identity Theft 911, said larger organizations appear to be more prepared for the new rules, because they generally already have fraud detection systems in place. Smaller, rural ISPs and cable providers might not be ready, he said. Goodman said companies scrambling to meet the deadline should make sure to at least have something in place. “Your initial program can be pretty thin, to some degree,” he said. The FTC expects that companies will refine and build Red Flag programs over time, he said. Goodman agreed there will be false positives but said the costs from identity theft probably outweigh the costs of even a robust Red Flag program.

New York Gov. David Patterson vetoed a bill demanding that telecom and energy utilities locate customer call centers in the state and within their service areas. HB-606 would have barred shifting call center duties for service, billing, credit and other matters to locations elsewhere. The bill passed the Senate unanimously and the House with only 7 dissenting votes.

Comcast’s much-publicized 250 GB monthly broadband data cap starting Oct. 1 “can and probably will be modified in the future,” a company executive said. Barry Tishgart, Comcast vice president of Internet services, didn’t elaborate on his remark, made late Wednesday on a panel at the Streaming Media West conference in San Jose, Calif. Even if Comcast successfully appeals the FCC order against the provider’s throttling of BitTorrent traffic, it will “absolutely not” resume the practice, he said. The cable company is committed to “protocol-agnostic” network management, Tishgart said. Doug Pasko, a senior technologist at Verizon, said his company intends to be “fully upfront with everyone” about speeds that broadband customers are buying and what can limit them. Pasko and Tishgart agreed that preventing copyright infringement isn’t a duty of developers of peer-to-peer technologies. The solution to infringement is “attractive business models” for licensed offerings, Tishgart said. BitTorrent Chief Technology Officer Eric Klinker seconded those sentiments. He said it makes no more sense to try to build copyright protection technology into P2P protocols than into HTTP or Firefox. To help ISPs on congestion, BitTorrent is collaborating productively with a wide range of other players in the P4P Working Group and the Internet Engineering Task Force, Klinker said. He called BitTorrent’s Advanced Congestion Control Protocol “a very network-friendly technology.”