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August 20, 2007, Alert No. 1,624.
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9th Circuit Holds Arbitration Clause in Cell Phone Contract Unenforceable

8/17. The U.S. Court of Appeals (9thCir) issued its opinion [29 pages in PDF] in Shroyer v. New Cingular Wireless Services and AT&T, holding that a mandatory arbitration clause in a standard cell phone service contract is unconscionable, and therefore, unenforceable.

Kennith Shroyer filed a complaint, and sought class action status, in state court in California, against Cingular and AT&T, alleging unfair competition, misleading advertising, and other state causes of action. He complained about cell phone service plans. When he obtained service, he executed a form contract that includes a binding arbitration clause, and a waiver of class action rights.

Cingular removed the action to the U.S. District Court (CDCal), asserting jurisdiction under the Class Action Fairness Act of 2005 (CAFA). It also moved to compel arbitration. The District Court granted the motion. This appeal followed.

The Court of Appeals reversed. It held that the question of whether or not the contract terms are unconscionable is a matter of California state law. It then held that under California law the mandatory arbitration clause is unconscionable, and hence, unenforceable. In addition, the Court of Appeals held that the invalidation of the contract clause is not preempted by the Federal Arbitration Act (FAA).

The case is remanded to the District Court with instructions to consider the class action.

This case is Kennith Shroyer v. New Cingular Wireless Services, Inc. and AT&T Corporation, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 06-55964, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-06-01792-R, Judge Manuel Real presiding. Judge Stephen Reinhardt wrote the opinion of the Court of Appeals, in which Judge Dorothy Nelson joined. Judge Pam Rymer wrote a one sentence concurring opinion.

FCC Sets Date for 700 MHz Auction

8/17. The Federal Communications Commission (FCC) released a Public Notice [PDF] (DA 07-3415) that schedules the 700 MHz auction (Auction Number 73) to begin on January 16, 2007, and requests comments on bidding procedures.

This notice seeks comments on "anonymous bidding, to enhance competition by safeguarding against potential anticompetitive auction strategies", "applicants trying to combine multiple C Block licenses to place bids on packages of those licenses", "block-specific aggregate reserve prices, to help assure that the public recovers a portion of the licenses' value", and "offering licenses for the relevant block(s) in a prompt subsequent auction in the event auction results do not satisfy applicable reserve prices".

The deadline to submit initial comments is August 31, 2007. The deadline for reply comments is September 7, 2007.

The FCC adopted its 700 MHz Second Report and Order on July 31, 2007, and released the text [PDF] on August 10, 2007. See also, story titled "FCC Adopts 700 MHz Band Order" in TLJ Daily E-Mail Alert No. 1,619, July 31, 2007.

More FCC News

8/16. The Federal Communications Commission (FCC) released the text [73 pages in PDF] of its Report and Order and Further Notice of Proposed Rulemaking regarding the roaming obligations of CMRS providers. The FCC adopted, but did not release, this item on August 7, 2007. It is FCC 07-143 in WT Docket No. 05-265. Initial comments on the NPRM portion of this item will be due within 60 days after publication of a notice in the Federal Register. Reply comments will be due within 90 days of such publication. As of the August 20, 2007, issue of the Federal Register, the FCC had not yet published this notice. See also, story titled "FCC Adopts CMRS Roaming Order and NPRM" in TLJ Daily E-Mail Alert No. 1,623, August 15, 2007.

8/16. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comment deadlines for its notice of proposed rulemaking regarding government efforts to plan consumer understanding of the transition to digital television. The FCC adopted this NPRM on July 21, 2007, and released the text on July 30, 2007. It is FCC 07-128 in MB Docket No. 07-148. See also, Public Notice [PDF] (DA 07-3612). Initial comments are due by September 17, 2007. Reply comments are due by October 1, 2007. See, Federal Register, August 16, 2007, Vol. 72, No. 158, at Pages 46014-46020.

8/10. The Progress and Freedom Foundation (PFF) released a paper [14 pages in PDF] titled "Privacy and the Commercial Use of Personal Information: The Case of Customer Proprietary Network Information". It states that "Regulation of CPNI collected by telecom companies will limit their ability to share and use information. There can be no benefits from these proposals if the FCC is correct in its assessment that there is no consumer harm from use of CPNI data by outside contractors or partners." On the other hand, it argues that there will be cost to consumers. Telecom companies would use CPNI to develop new plans and to provide marketing information to consumers that is tailored to their needs. The authors of the paper are Tom Leonard (PFF) and Paul Rubin (Emory University).

People and Appointments

8/16. David Cavicke was named Republican Chief of Staff for the House Commerce Committee (HCC). He was previously General Counsel and Deputy Chief of Staff for the HCC. Before that, he worked in the New York City office of the law firm of Milbank Tweed. He replaces Bud Allbright, who left earlier this summer. Neil Fried remains Senior Counsel for Telecommunications. See, HCC release.

8/15. President Bush named John Adams to be Associate Counsel to the President. Adams has clerked for Supreme Court Justice Clarence Thomas, and for Judge David Sentelle of the U.S. Court of Appeals (DCCir). He has also worked in the Richmond, Virginia, office of the law firm of Hunton & Williams. Adams represented Cingular Wireless (now AT&T) in antitrust litigation. See, Hunton & Williams release.

8/20. Thomas Sydnor will join the Progress & Freedom Foundation (PFF) in September as a Senior Fellow and Director of the Center for the Study of Digital Property (IPcentral). He previously worked in the U.S. Patent and Trademark Office's (UPSTO) Office of International Relations. See, PFF release.

8/17. Rep. Denny Hastert (R-IL) announced that he will not run for re-election. Rep. Hastert is a member of the House Commerce Committee (HCC). He was previously the Speaker of the House.

8/16. Rep. Deborah Pryce (R-OH) announced in a release that she will not run for re-election. She was previously the Republican Conference Chairman. See also, statement by President Bush.

More News

8/17. The U.S. District Court (DC) issued an order [2 pages in PDF] denying the Federal Trade Commission's (FTC) request for a preliminary injunction of the proposed acquisition by Whole Foods of Wild Oats on August 16, 2007. The District Court also wrote, but sealed, a memorandum opinion. The FTC asserts that there exists a market for premium natural and organic supermarkets, and that the merger would lessen competition in this market. Jeffrey Schmidt, Director of the FTC's Competition Bureau, stated in a release on August 16, 2007, that "We are reviewing our options." On August 17, the FTC filed a Notice of Appeal [2 pages in PDF] to the U.S. Court of Appeals (DCCir). This case is FTC v. Whole Foods Markets, Inc. and Wild Oats Markets, Inc., U.S. District Court for the District of Columbia, D.C. No. 07-1021 (PLF), Judge Paul Friedman presiding.

8/17. The U.S. Court of Appeals (FedCir) issued its per curiam opinion [2 pages in PDF] in Caritas Technologies v. Comcast, affirming the judgment of the District Court. This case is Caritas Technologies, Inc. v. Comcast Corporation, et al., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2007-1057, an appeal from the U.S. District Court for the Eastern District of Texas, D.C. No. 2:05-CV-339.

Washington Tech Calendar
New items are highlighted in red.
Monday, August 20

The House will not meet due to the August District Work Period. See, House 2007 calendar. The House will next meet at 2:00 PM on September 4, 2007.

The Senate will not meet due to the August District Work Period. The Senate will next meet at 1:00 PM on September 4. See, Senate 2007 calendar.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [PDF] regarding E911 location requirements. This item is FCC 07-108 in PS Docket No. 07-114, CC Docket No. 94-102, and WC Docket No. 05-196. The FCC adopted this item on May 31, 2007, and released on it on June 1, 2007. See, notice in the Federal Register, June 20, 2007, Vol. 72, No. 118, at Pages 33948-33955. See also, story titled "FCC Extends E911 Location Tracking Rules to Interconnected VOIP" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its request for comments regarding what constitutes a "near reservation" area for federal Lifeline and Link-Up support purposes. See, DA 07-1239 in CC Docket No. 96-45, and notice in the Federal Register, July 5, 2007, Vol. 72, No. 128, at Pages 36706-36708.

Effective date of the Federal Communications Commission's (FCC) Second Memorandum Opinion and Order in its proceeding regarding public safety communications in the 800 MHz Band. The FCC adopted this item on May 24, 2007, and released the text on May 30, 2007. It is FCC 07-102 in WT Docket No. 02-55. See also, notice in the Federal Register, July 20, 2007, Vol. 72, No. 139, at Pages 39756-39761.

Tuesday, August 21

1:00 - 3:00 PM. The Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC) will hold a meeting by teleconference regarding "revising and updating accessibility guidelines for telecommunications products and accessibility standards for electronic and information technology". The deadline to register is August 15, 2007. See, notice in the Federal Register, August 3, 2007, Vol. 72, No. 149, at Pages 43211-43212. Location: Suite 1000, 1331 F St., NW.

Wednesday, August 22

Deadline to submit applications for Public Safety Interoperable Communications (PSIC) grants. See, notice in the Federal Register, July 23, 2007, Vol. 72, No. 140, Pages 40120-40123, and story titled "Public Safety Interoperable Communications Grant Applications Due in 30 Days" in TLJ Daily E-Mail Alert No. 1,612, July 19, 2007.

Deadline to register for the August 28, 2007, meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC) meeting by teleconference regarding "revising and updating accessibility guidelines for telecommunications products and accessibility standards for electronic and information technology". See, notice in the Federal Register, August 3, 2007, Vol. 72, No. 149, at Pages 43211-43212.

Thursday, August 23

9:00 AM. The Department of Commerce's (DOC) International Trade Administration's (ITA) President's Export Council will meet by teleconference. See, notice in the Federal Register, August 13, 2007, Vol. 72, No. 155, at Pages 45224.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding rule changes related to the DTV transition. The FCC adopted this NPRM on April 25, 2007, and released the text [93 pages in PDF] on May 18, 2007. It is FCC 07-70 in MB Docket No. 07-91. See, notice in the Federal Register, July 9, 2007, Vol. 72, No. 130, at Pages 37309-37344.

Deadline to submit comments to the President's National Security Telecommunications Advisory Committee (NSTAC) following its partially closed meeting of August 16, 2007, regarding the NSTAC's International Task Force (ITF) Report and network security and the global communications environment. See, notice in the Federal Register: July 31, 2007, Vol. 72, No. 146, at Page 41771.

Friday, August 24

Deadline to submit nominations for appointments to its Federal Reserve Board's (FRB) Consumer Advisory Council. See, notice.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding proposed rules to ensure bidirectional compatibility of cable television systems and consumer electronics equipment. The NPRM also seeks comment on whether these rules should apply to non-cable Multichannel Video Programming Distributors (MVPDs) and whether there are technological solutions that are network agnostic and deployable across all MVPD platforms, including DBS, IP, and QAM/IP. The FCC adopted this item on June 27, 2007, and released the text on June 29, 2007. It is FCC 07-120 in CS Docket No. 97-80 and PP Docket No. 00-67. See, notice in the Federal Register, July 25, 2007, Vol. 72, No. 142, at Pages 40818-40824.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to the Wireline Competition Bureau's (WCB) notice requesting comments to refresh the record on the issues raised by the FCC's 2004 Further Notice of Proposed Rulemaking (NPRM) regarding its universal service subsidy programs titled "Lifeline" and "Linkup". The WCB issued its notice on March 12, 2007. It is DA 07-1241. The FCC issued its NPRM on June 22, 2004, in WC Docket No. 03-109. See, notice in the Federal Register, July 25, 2007, Vol. 72, No. 142, at Pages 40816-40818.

Monday, August 27

10:00 AM. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its Special 301 Out-of-Cycle Review of the Russian Federation. This is a review of countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. See, notice in the Federal Register, July 9, 2007, Vol. 72, No. 130, at Pages 37272-37273.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) in its XM Sirius merger review proceeding that seeks comment on whether the language in an earlier order barring the merger constitutes a binding FCC rule, and if so, whether the FCC should waive, modify, or repeal the prohibition if the FCC determines that the proposed merger would serve the public interest. See, notice in the Federal Register, July 12, 2007, Vol. 72, Number 133, at Pages 38055-38056.

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