Customs Duty

Today’s controls don’t ensure end-to-end connectivity, so the U.K. Office of Communications (Ofcom) Fri. wants to make BT buy wholesale narrowband call termination services from any public electronic communications network (PECN) that wants to supply such services to BT and its customers, it said. Earlier rules required BT to allow interconnection to provide end-to-end connectivity. But ahead of the new e- communications regulatory framework, Ofcom’s predecessor issued guidelines to ensure interconnection and end-to-end connectivity. The theory was that as a universal service provider BT would have to grant all reasonable requests by customers for access to publicly available phone services and that meeting this requirement would ensure connectivity. But since the guidelines rely on universal service duties not extending to a requirement to connect end-users to every network, they don’t suffice, Ofcom said. It eyed 4 options: (1) Do nothing. (2) Issue new guidelines. (3) Require PECNs to buy wholesale narrowband -- fixed and mobile voice and narrowband data call termination services -- from any other PECN wanting to supply termination to it and its customers. (4) Require only BT to buy the services, since BT is the largest provider of telecom connections and the main buyer of call termination. Comments on Ofcom’s adoption of option 4 due Aug. 15 -- Chris.Rowsell@ofcom.org.uk.

The Wash. Attorney General’s Office advised state regulators to suspend an inquiry into whether AT&T and Verizon illegally supplied customer phone records to a secret National Security Agency (NSA) domestic phone surveillance project until federal courts decide if the national state- secrets privilege applies. The AG’s office urged the Utilities & Transportation Commission (UTC) to keep the customer privacy docket open pending resolution of privacy advocates’ federal suits. The AG’s recommendations came in response to an ACLU complaint against the telcos claiming they violated state consumer privacy laws. Meanwhile, AT&T and Verizon reiterated previous comments that federal actions in N.J. to block a similar state probe of the privacy violation charges show the U.S. views the material at issue as state secrets, erasing any UTC authority to investigate. AT&T said at least 32 suits relating to the NSA project are pending in federal courts. Verizon said state commissions in Del., N.Y., Ia., and Va. have declined to pursue inquiries into the allegations. But state Sen. Jeanne Kohl (D) and state Rep. David Upthegrove (D) said the UTC has a right and duty to act when customer records are disclosed improperly. Replies are due July 17, and a final decision on whether to continue the probe could come as early as July 26.

The U.S. govt. asked a federal court in San Francisco to dismiss a suit over AT&T’s alleged cooperation with a govt. domestic phone surveillance program because a trial would expose secret information that would help terrorists. The U.S. Dept. of Justice (DoJ) told Judge Vaughn Walker of the U.S. Dist. Court, San Francisco, that even a simple confirmation or denial would aid terrorists by letting them know if the U.S. is actually monitoring domestic telephone communications. The hearing Fri. on a motion for dismissal involved a suit by the Electronic Frontier Foundation (EFF), alleging AT&T supplied the National Security Agency (NSA) with customer call records and ongoing call information without permission or lawful authority. The DoJ was not a defendant but joined in AT&T’s defense. Walker also heard motions seeking unsealing of certain evidence and making the AT&T holding company a defendant as well as its operating company. The EFF suit is one of several filed around the country. Walker questioned govt. attorneys closely on why the govt. believed that acknowledging a phone surveillance program would help terrorists, why they believed the mere existence of a monitoring program should be kept a state secret, and why established court processes for protecting sensitive commercial and govt. evidence would be inadequate in this case. The DoJ argued that the president has the authority to make the call on the govt.’s response to intelligence information, and any judicial review of that response would inevitably reveal state secrets. AT&T attorneys said the company can’t be sued for breaches of privacy resulting from compliance with an authorized govt. search. AT&T said the burden of proof falls on the EFF to show the NSA program wasn’t lawfully authorized. AT&T also said that if a branch of the U.S. govt. authorized a secret phone surveillance program, only Congress and not AT&T or the courts, could decide whether the program was legal. But the EFF attorneys argued that AT&T has a duty to its customers to ensure that any govt. request involving a breach of customer privacy was for lawful programs and purposes. Judge Walker made no decisions Fri. and didn’t indicate when he might rule.

The FCC approved Intelsat and PanAmSat’s $3.2 billion merger in an order released late Mon. -- concluding the deal is unlikely to have an adverse effect on Fixed Satellite Services (FSS) price, quantity or transponder availability for customers from broadcasters to the U.S. govt. Intelsat CEO David McGlade said the merger will “open a new chapter” in the satellite industry, with increased capacity for key services, more reliability and wider geographic service. Comrs. Copps and Adelstein were skeptical, voicing concern over telecom consolidation in general and N. American FSS consolidation in particular. The transaction was unopposed in the record.

Incumbent telcos would be the clearest winners, and small providers of interconnected VoIP the biggest losers, if the FCC and Senate proceed as they have been on changes in the Universal Service Fund (USF), according to interviews with industry executives and analysts. Satellite would benefit by becoming eligible under a new fund for places unserved by broadband.

Telecom companies have much work to do to comply with FCC CALEA rules by May 14, 2007, especially since some probably don’t understand the complex requirements, panelists said Thurs. on a USTelecom webinar. Developing a system to give law enforcement access to subscriber activity is hard because such data usually are distributed over multiple networks, said VeriSign Vp Raj Puri. Real time access to content requires quickly identifying and isolating all services a targeted subscriber uses, he said.

A civil suit in a Mo. court alleges that AT&T broke state consumer privacy laws in past and present cooperation with National Security Agency (NSA) phone record surveillance. And 2 Mo. PSC members say they will subpoena AT&T to learn what customer records the firm may have shared with U.S. agencies and the companies legal rationale. The suit in the St. Louis Circuit Court alleges AT&T violated state laws making it a felony to share customer records with any 3rd party without customer consent or lawful due process, such as a court order. The suit -- in which lead plaintiff Claudia Mink seeks class action status, monetary damages and legal fees on behalf of all AT&T Mo. customers -- alleges AT&T’s “comprehensive and warrantless gathering and disclosure of telephone logs violates Missouri law.” The records at issue log call origination, termination and length. Mo. PSC Comrs. Robert Clayton and Steve Gaw, dissatisfied with AT&T’s response last week to complaints that it unlawfully shared customer data, said they plan to launch a formal complaint investigation and subpoena AT&T for the information they want. AT&T in its complaint response said it shares customer data with govt. agencies only with proper legal authorization, but declined to confirm or deny supplying Mo. customer data to the NSA, citing national security. Clayton and Gaw said the PSC has a legal duty to enforce utility consumers’ privacy rights, but AT&T is refusing to address how its customers’ privacy rights are being protected or whether lawful due process was followed in any information sharing with the NSA.

AT&T told the Mo. PSC it won’t disclose anything about which, if any, customer records it shared with the National Security Agency (NSA). AT&T told the PSC it has a public duty to assist law enforcement agencies and “other government agencies responsible for protection of the public welfare.” Beyond that, AT&T said, it “cannot comment on matters of national security.” PSC Comrs. Steve Gaw and Robert Clayton last week sent a letter to AT&T in response to news articles alleging that AT&T, among other telcos, had cooperated with a secret NSA project to collect and compile U.S. telephone customers’ call records as part of efforts to track potential terrorist activities. They had asked AT&T to cite the legal authority for sharing records with NSA, which records were involved and what sort of information about individual subscribers the company had supplied. They said they were trying to determine whether AT&T complied with state laws protecting privacy of customer phone records. AT&T responded that it “prizes the trust our customers have placed in us” and doesn’t disclose customer records to law enforcement or govt. agencies “without legal authorization.” AT&T said any assistance it might supply in response to requests is provided “strictly within the law.” But AT&T declined to tell the PSC any specifics about any requests from the NSA. Gaw said he’s not satisfied and may seek by subpoena more answers from AT&T.

Conn. Attorney Gen. Richard Blumenthal (D) took formal exception to a proposed order from the Dept. of Public Utility Control to exempt AT&T’s Internet-based video services from franchising requirements. The DPUC had concluded AT&T’s service doesn’t fit the legal definition of cable service and is an unregulated Internet application, similar to unregulated Internet telephony. But Blumenthal said the DPUC order is wrong. He said it would deny state residents important consumer protections by allowing AT&T to cherry-pick the most lucrative and accessible customers and escape obligations for local public access channels. AT&T had promised to meet many cable obligations, but Blumenthal said the state has a duty to “guarantee all citizens have access to [competitive market opportunities] while assuring continued public service programming.”

The European Commission said it signed an international multichip processor (MCP) agreement with the U.S., S. Korea and Taiwan. The deal, signed after a year of negotiations, covers trade in MCPs, eliminating customs duties and other charges on MCP imports among the signers. It’s expected to drive down the cost of devices that use MCPs, including mobile phones, MP3 players and PDAs. Semiconductors and semiconductor products already generally benefit from free trade under the terms of the 1996 WTO Information Technology Agreement. MCPs, though, aren’t covered by the 1996 agreement because they're so recent. The agreement takes effect April 1. Japan already applies no duties on MCPs and is expected to join later this year. The EC said the agreement is open to other MCP-producing countries.