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How Would I Pick a Lawyer?

– Joe Rosenbaum

Just like any other business, lawyers and law firms try to determine how best to attract clients, win more business and expand the business they already have. Lawyers engage marketing professionals, hold internal caucuses and develop volumes of pitch materials – often segmented by industry, geography, size, diversity and scores of other ‘meaningful’ criteria. One thing lawyers rarely do is ask clients: What makes you satisfied with your lawyer? What does your lawyer do that you really like? What would encourage you to give your lawyer more business or recommend your lawyer to others – internally or externally?

So in that light, I’m going to pretend I’m a consultant, not a lawyer, and share with you the 10 most important things I would use to pick, keep, cultivate and recommend a lawyer!

1. Chemistry: Clients pick and work with lawyers, not law firms. Clients want lawyers who understand their business so there is context to the legal work and the relationship. Yes, it’s important for clients to have a law firm that can provide legal support in multiple areas, in multiple jurisdictions, with enough bench strength to handle large deals or multiple deals simultaneously. BUT, ultimately a client wants to feel comfortable with the individuals and their professional relationship.
2. Trust: Clients need to be able to freely exchange information with their lawyer – especially bad news. Success is easy to share, but clients need to feel comfortable that communicating bad news, mistakes, problems and concerns will not be met with judgment or disdain. They want someone with a desire to help resolve the issue or, at least, make the best of a bad situation. Clients want to know their lawyer is really on their side.
3. Professionalism: Clients want a lawyer that is a professional. That means not cutting corners on ethics or professional responsibility. Clients need to know integrity, like trust, is something their lawyer believes and values and behaves accordingly. Cutting corners may seem expedient in the short term, but does any client ever want to wonder what other corners their lawyer is cutting?
4. Quality: There is no substitute. True, not every lawyer will have the same experience, skill or expertise. But every lawyer should know when something is out of their depth or beyond their capabilities. Clients want to know the work their lawyer does, their lawyer does well. If the matter is outside their lawyers skill set, clients want to know their lawyer will find, recommend and, if necessary, supervise other professionals with an equal passion for quality work.
5. Responsiveness: Clients understand that lawyers aren’t sitting around waiting for the client to call. But clients do appreciate a phone call, email or text saying “I received your request, document or message and while I’m busy or away or lounging on a beach, I’ll get to it by [insert reasonable time frame].” Definitely better than not responding at all and having the client wonder if you received their message or imagine you aren’t paying attention to them.
6. Efficiency: Clients often speak about ‘efficiency’ as if it were speed or cost or both. In reality, efficiency is more a benchmark of productivity than how quickly the work is done. But real efficiency means getting the work done in the most economical way. Sometimes a client may be willing to sacrifice efficiency for speed. Clients want work done well and quality legal support shouldn’t be sacrificed for speed. Being efficient truly adds value!
7. Value: Clients want lawyers who are practical and add value. They assume you are good what you do. Albert Einstein once said, “The definition of genius is taking the complex and making it simple.” No client needs to read a fifty page legal research memorandum and become an armchair lawyer. Clients want a genius. So be a genius! Encourage understanding, not legal bravado. Describe the issue, the risks, the alternatives and if possible, make a recommendation. That adds value. Clients will ask for more information if they need or want it.

8. Proactive: Clients want lawyers who not only understand their business and are responsive, but proactive. When laws or regulations change; when client’s business or operations change; when there are new developments affecting the client, every client wants a lawyer to let them know. It’s never a good when a client calls their lawyer with “I heard this happened . .. how does it affect me.” Most clients (and I suspect, most lawyers) would prefer the call that says, “thanks for letting me know so promptly you’re very helpful.”
9. Team Player: Lawyers don’t work in a vacuum – neither do clients. There may be many stakeholders with an interest in what’s going on, involving many areas and people (and many personalities) that need to interact in order for a client to make the best decisions on an informed basis. Lawyers are not the only professionals feeding clients information. Be cognizant, and most of all respectful, of those other folks. Be mindful that if all the lawyers in the world disappeared, babies would be born, goods would be bought and sold and life would go on. But if all the clients disappeared, lawyers would be out of work.
10. Money: Last but not least, attorney-client relationships involve money. Clients want the most practical, highest quality, most responsive, value added professional legal support from a lawyer they trust and like to work with for the least amount of money possible. Of course! Clients are intelligent consumers; they have choices and they certainly aren’t looking to over pay. Lawyers want to maximize the profit they derive from the work they do. Clients understand. It’s a delicate balance and lawyers must be flexible in agreeing to find different ways to profit, customized to each situation if necessary. Clients need to rely on their lawyer’s ability to be adaptable and have open discussions about charges. Fixed fees, milestone payments, value-based billing, success fees – there’s no shortage of alternatives to hourly rates and billable hours. If a client calls to discuss fees after receiving an invoice, it’s not really a discussion. It’s a negotiation at best and an argument at worst – one that undermines all the other goodwill that may have been built in the relationship.

So that’s my list. That’s how I would pick my lawyer. How will you pick yours?

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Inter Net Neutrality

What an interesting play on words.  According to the Merriam-Webster dictionary, “inter” is a verb that means “to deposit (a dead body) in the earth or in a tomb.”

Earlier this week, the Chairman of the U.S. Federal Communications Commission (FCC) outlined plans to bury the Internet rules promulgated under the Obama administration that required providers of Internet services to treat all web traffic equally.  Those rules, among other things, limit the ability of ISPs to favor content or customers, to block or slow down the online services they provide.  Under the proposed changes, ISPs (wired and wireless) would be allowed to offer web-based services at different speeds and differing quality of service.  In addition, they could enable more favorable speed or quality, or both, for websites that paid a fee – as long as that relationship was disclosed.

Over the years, a lively and heated debate over the nature and extent of regulation needed to protect consumers without stifling innovation has continued.  Proponents of eliminating the rules claim that allowing the market to create different financial and performance models will spur investment and the development of technology, while critics argue that consumer prices would increase and so would barriers to entry and start-up costs for new companies.  Critics point to the airline industry (where the FCC net neutrality rules have never been applicable) as an example of the potential for harm – one U.S. air carrier provides easy access to one online video service which has paid the airline for such priority status, while others are not enabled with the same speed or quality.

Under the previous administration, the Internet and ISPs (both wired and wireless) were treated as utilities, virtually excluding them from regulatory oversight by the Federal Trade Commission (FTC), whose fact-based, case-by-case, analytical approach to regulation is generally perceived as more suitable (and friendly) for emerging technology and evolving markets.  Based on Chairman Ajit Pai’s remarks, in another reversal of the prior administration’s approach, it appears the FCC is now willing to share oversight with the FTC and have the FTC be responsible for monitoring ISP disclosures, determining if consumers are being harmed and determining whether these firms are engaging in anti-competitive or unfair trade practices.  The FCC indicated it plans to enact the new rules early in the new year.  Stay tuned.

If you have any questions or want more information about this or any Legal Bytes’ post, don’t hesitate to contact me, Joe Rosenbaum, a New York based partner at Rimon, P.C., or any of the other lawyers at Rimon with whom you regularly work.

 

 

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Net Neutrality: Is the Cease Fire Over?

By Stephen Díaz Gavin  *

The way the U.S. Government regulates the Internet is back in play again. The outcome of the long running battle over “net neutrality” and regulation of the Internet – now more than 15 years old — is still uncertain. However, it is clear that the Federal Communications Commission (FCC) is stepping back from the stronger supervision of Internet Service Providers (ISPs) adopted in March 2015 under former FCC Chairman Tom Wheeler at the insistence of former President Obama.
On May 18, 2017, the FCC voted to release a Notice of Proposed Rulemaking (NPRM) to step back from the agency’s controversial March 2015 decision to treat ISPs as “common carriers” under Title II of the Communications Act. Instead, the “proposed rule,” will revert to classifying ISPs as providers of an “information service” and return jurisdiction over ISPs privacy practices to the Federal Trade Commission (FTC) – a clear indication of the direction the FCC will take under the current administration.
Law professor Tim Wu coined the term “net neutrality” in 2003.  As the FCC’s current Chairman Pai recently noted in an interview in the Wall Street Journal, the term “[i]s one of the more seductive marketing slogans that’s ever been attached to a public policy issue”.  Who can be against “leaving the Internet alone?” (“Why ‘Net Neutrality’ Drives the Left Crazy,” Wall Street Journal).   Apparently, many believe that it should not be left alone: the FCC received nearly 1.25 million comments submitted via the Internet in the three weeks following FCC Chairman Pai’s announcement that he intended to reconsider the Title II rules; nearly all opposing the proposal.
At the core of the dispute is the tension between the ISPs on the one hand, and streaming content providers like Netflix and Amazon, as well as Internet giants like Google and Facebook on the other.
Consumers fear a slowdown in service. The ISPs maintain the March 2015 common carrier regulation decision will stifle investments and ultimately produce what consumers fear:  a slower Internet.  Indeed, in the NPRM the FCC cited a decline in investment since the March 2015 Order in support of changing the rules.  The clash of interests highlights how outdated the old ways of government oversight of telecommunications have become. The Communications Act of 1934, was originally enacted to monitor the monopoly telephone provider at the time (ATT), based on the model of regulating railroad service and freight rates under the Interstate Commerce Act of 1887 – hardly a relevant basis for overseeing the backbone of 21st century technology.
The common carrier regulatory model prohibits additional charges for streaming content providers, which could be viewed as discriminatory. However, such a regulatory structure does not account for how ISPs pay for upgrades to maintain service quality as consumer demand increases for such content streaming.  Video content producers that stream large volumes of data, slow up Internet connections. Although the largest ISPs have agreed voluntarily not to charge the Netflix and Amazons of the world for doing so, where must the money come from in order to continue to upgrade capacity to maintain high speed download?  Retail consumers are concerned about higher rates, surcharges or deliberate “slowing” of service, yet these same consumers are customers of over-the-top online video gaming and streaming services that consume huge amounts of capacity.  Consumers always want more and faster service and they want it at the lowest price.
Given the current Republican majority, the FCC will likely eliminate Title II regulation of ISPs as it has proposed.  However, the decision can and will again be challenged in the courts (as has every prior rule on net neutrality).  Even if upheld by the courts, only Congress can define ‘net neutrality’ once and for all and give some degree of regulatory certainty to the regulations (which can be changed by a Democratic majority just as easily as the current Republican controlled FCC has done to the Obama era rules).
Net neutrality is now a hot political issue and despite current Republican majorities in both the House and Senate, it is uncertain whether a working majority in both exists that can adopt legislation to guide the FCC.  No matter who you are, in the debate over net neutrality, clearly nobody is neutral. Until Congress acts to give some greater definition to the term, successive FCC Chairmen will be able to reinterpret net neutrality as they see fit.

* This post was derived and adapted from a Rimon Law Client Alert “No Peace in Sight for Net Neutrality” by Stephen Díaz Gavin, who you can contact directly for more information.  

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FCC Drops ‘App’ Plan to Open Set-Top Boxes

–  Joe Rosenbaum

The Federal Communications Commission (FCC), under its new Chairman Ajit Pai, removed from its list of items for consideration, a proposal originally put forth by prior Chairman Tom Wheeler that would have allowed consumers to access pay-TV content on third-party devices.  Previous Chairman Wheeler’s original proposal took an “apps” based approach, but also included a licensing scheme that would require implementation of a standardized license for placing apps on such platforms or devices.

Critics, however, noted this particular proposal would actually have the opposite effect and more restrictively limit the choices available to consumers.  The original proposal also put the FCC in the position of acting as supervisory authority in order to ensure, in each case, that such a license wouldn’t harm competition.  Critics immediately raised concerns over the need for such intrusion by the FCC at all (some raised questions regarding the authority of the FCC to require or supervise such a licensing scheme), with many preferring to simply get rid of restrictions and limitations on access devices altogether.

While the FCC has removed the proposal from its list of items being considered for a vote, it remains on the Commission’s circulation list. Thus, the FCC’s action removes the proposal from immediate consideration, but doesn’t close the file officially – something over which industry groups remain concerned.   Their concerns continue to relate to the uncertainty of having a proposal still open for consideration, which, if resurrected, could pose problems for many in the industry, including distributors and content creators whose existing contracts might be in violation of such a new FCC requirement or policy.  Stay tuned.

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Looking Forward to 2015

As we say goodbye to 2014 . . .

For those of you who are loyal readers and followers of Legal Bytes, you know this is the time of year when I break tradition and write a non-legal, personal and philosophical Legal Bytes post. If ancient Babylonians, who celebrated the New Year upon seeing the first new moon after the vernal equinox, could start a tradition that lasted for about 4,000 years – the least I can do is try to keep up. Although my tradition doesn’t date back nearly that far, this post will contain no links to distract you (until the very end when hopefully it won’t be a distraction). Nor will there be any citations to legal doctrine, references or background information. I won’t try to dazzle you with facts or intrigue you with today’s news. This is my opportunity to philosophize and dispense my thoughts and opinions – with absolutely no credentials, qualifications or expertise to do so.

There are two traditions I wish to continue, although I did not originate either one. First, let me take this the opportunity to wish each of you, your families, friends, loved ones and, yes, even an enemy or two, a beautiful and joyous holiday season and a healthy, happy new year, filled with wonder and magic, health and joy, challenge and opportunity, and prosperity and success. Second, as many of you know, for numerous years I have avoided sending out mass mailings of cards and gifts. Not only are they too lost in the seasonal flurry or delayed by the strain on delivery services, but the truth is that most of us don’t really need or want the trinkets that never express the real sense of appreciation or gratitude we might feel for friends and colleagues, families and loved ones, wherever they may be. We might deceive ourselves into believing it “personalizes” the warmth of the season, but after a few weeks they ultimately go into a drawer or the trash bin, or they are relegated to a closet filled with decades of Lucite, or sometimes they are re-gifted. In reality, there is nothing really personal about that process.

As many of you may already know, my second tradition is one I’ve borrowed from an old friend years ago, and which was originally intended to replace the mass cards, emails and impersonal trinkets with a more meaningful gift. Each year, I make a contribution to a charitable organization for all the family members, friends, loved ones, colleagues and acquaintances I want to honor, in memory of those I have lost this past year, and in recognition of those who have given me a reason to celebrate – in all, far too many to list and certainly all more deserving of something better than a card or bottle of wine. In that spirit, as I have done for a number of years, I have made a donation to the St. Jude Children’s Research Hospital – my way of trying to help some children in need who might benefit from the kindness of a stranger. Sometimes, random acts of generosity and kindness can bring surprising results – whether a smile, an unexpected warmth of spirit, or simply knowing it’s not all that difficult to do something to help make the world a better place – even just a little. Try it sometime.

Continue reading “Looking Forward to 2015”

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The New Robocop in Town: TCPA, When ‘ALL’ Really Means ALL

This post was written by Judith L. Harris, James M. Duchesne, and Joseph I. Rosenbaum.

It’s Election Night 2010 in Maryland, where a high-profile gubernatorial race is coming to a close. The telephone rings once again, but this time, the message is not “go out and vote before the polls close.” Instead, a recorded message tells the voter, “Relax. Everything is fine. The only thing left is to watch [election results] on TV tonight.” The automated call with a recorded message (a “robocall“) ends with no indication as to who made it or where it came from. This was what actually happened to more than 112,000 African-American voters in Maryland on November 2, 2010. While these “robocalls” may have violated Maryland election laws (criminal charges were recently issued), they may also have violated the TCPA – the Telephone Consumer Protection Act of 1991 (47 U.S.C. 227).

The TCPA amended the Communications Act of 1934 and is the primary law regulating telemarketing in the United States. Subsection (d) of the TCPA, entitled “Technical and procedural standards,” requires the Federal Communications Commission to create minimum technical and procedural standards for making calls using an artificial or prerecorded voice system (a “robocall”) and makes it a violation of the law if an individual ignores those standards. As part of those minimum standards, one must, at the beginning of the robocall, clearly disclose the identity of whoever initiated the call and at some point during the call, disclose the telephone number or address of that business, individual or entity.

The TCPA allows each state attorney general to enforce the law in federal court, and Maryland brought an action against the company that initiated the offending calls, as well as one of its owners, and one of its employees, claiming they violated the TCPA’s disclosure requirements in an effort to confuse voters and suppress voter turnout (Maryland v. Universal Elections). In response, Universal filed a motion to dismiss the suit, and just a few weeks ago (May 25, 2011), in its opinion dismissing that motion and allowing the suit to proceed, the U.S. District Court for the District of Maryland made some noteworthy observations regarding TCPA liability:

Purpose Doesn’t Matter. The defendants claimed that making “political robocalls” exempted them from the requirements of the TCPA. Nope. While the FCC may have exempted political robocalls from the requirement of obtaining prior consent, neither Congress nor the FCC exempted political robocalls from the minimum disclosure standards of the TCPA – the plain language of the rule states: “all artificial or prerecorded telephone messages.” Any robocall, for any purpose – commercial, political, or charitable – must contain a disclosure regarding who initiated the call and where that entity or individual can be contacted.

Individuals Can Be Liable. The plain language of the statute, cited in the court’s opinion, states: “It shall be unlawful for any person . . .” to violate the robocall disclosure requirement. Whether an owner of the company or an employee acting on behalf of the company, the court noted several instances in which individuals acting on behalf of corporations could be held personally liable for violating the TCPA (e.g., if they, “had direct, personal participation in or personally authorized the conduct found to have violated the statute”). The owner and employee here could be found liable not because they worked for Universal Elections, but because they were directly involved in initiating the calls that may have violated the TCPA. In other words, if an individual causes a corporation to act in a way that violates the TCPA, that individual can be found liable for the corporate action. Corporate, political campaign and nonprofit decision makers should be aware of this personal liability when they plan their calling campaigns.

One Who Initiates the Call, Not Just Makes It, Can Be Liable. In its motion, Universal argued that because it did not physically make the robocalls, it was not subject to the procedural disclosure standards of the TCPA. It hired a third party to place the robocalls and only recorded the message and uploaded it, and the 112,000 telephone numbers to be called, into the vendor’s system. Guess what the court said? “As the persons and entity responsible for recording the message, the defendants,” and not the conduit that distributed the message, “were in a position to ensure that the content of the message complied with the TCPA.”

If you are making pre-recorded calls, compliance is cheaper than the risk of damages. Maryland is seeking not just to enjoin the defendants from ever violating the TCPA again, but is also seeking monetary damages of $500 per TCPA violation (i.e., each call); and since the state alleges the violations were made willfully and knowingly, it claims the defendants were trying to deceive voters by failing to disclose who made the call, and is also asking the court to triple the damages and require the defendants pay the state’s attorneys’ fees.

A special thank you to James M. Duchesne, a legal intern at Rimon and one of the primary authors of this post. His contribution is greatly appreciated. If you need legal advice and representation on issues related to telemarketing, look no farther than Judith L. Harris and her team, working with our Advertising Technology & Media law practice group. Experienced. Knowledgeable. Seamless. Responsive. Cost Effective. We are happy to help.

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Facebook Faces Yet Another Minor Case – Ads Add Added Woes

Facebook is facing another class-action, this time in Federal Court in Illinois, charging it used minors in its advertising. Although I haven’t done a search, there are at least two or three others – federal actions in California and New York and at least one state lawsuit filed in Southern California. In each of these cases, the allegations are essentially the same. Facebook takes user names, pictures and preferences, using the "Like" buttons, and then mashes or moshes (that word is the pits) them with paid sponsorship and advertising to target specific ads – sometimes referred to as "enhanced" or "premium" advertisements. The user’s name or likeness can be "pushed" to their Facebook friends – presumably people who the user has specifically permitted to be able to see such information; and also presumably by becoming a "friend," they, in turn, have manifested a desire or interest to know what the individual is doing, what she or he likes, opinions, where they are and what they are doing.

Aside from issues of free speech, voluntary opt-in and parent consent, especially where the individual is a minor and their name, image or likeness is used in an "ad" (and it’s not clear or settled that these are all "advertisements"), a question arises as to whether section 230 of the 1996 Communications Decency Act insulates Facebook from liability as a neutral communications platform that doesn’t control what each individual does or offers – so long as they act in accordance with Facebook’s terms and conditions. Some commentators point out, however, that in 2007, a Federal Appeals Court in California (9th Circuit Court of Appeals) held that Roommates.com was not immune when their users posted ads that were illegal under the Fair Housing Act (See, Fair Housing Council v. Roommates.com LLC [PDF]. That said, in the Roommates case, the ads were, to some extent, structured, and categories of content and information for the ads encouraged, if not solicited, populating the database of advertising for roommates using the website. Facebook may well argue that simply providing a "Like" button and making it available for use, is no different from a brand owner making a gadget or widget icon available should a user want to place it on their site. The "platform" – in this case Facebook – has no part in the user’s decision, nor is it offering to customize the user’s "Like" decision in any way that could be construed as editing or adding new content as a publisher.

One thing is very clear. Nothing is clear. Stay tuned!

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Welcome to Disco via SMS – Google Finds Itself Dancing in Court

This post was written by Judith L. Harris, with assistance from Rimon Summer Interns James Duchesne and Linda Shim.

A new trend is quickly taking hold. In recent months, a sizeable number of class action lawsuits have been filed involving unsolicited text messages. A messaging system called “Short Message Service,” better known as “SMS“, allows individuals to receive text messages on mobile phones.  Consumers unhappy with bulk, unsolicited SMS marketing messages are filing suit under the Telephone Consumer Protection Act 47 U.S.C. § 227 (“TCPA”) in alarming numbers. You can read a summary of the TCPA Rules [PDF], but to recap for these purposes, the TCPA prohibits any call from an automatic telephone dialing system to any mobile telephone service or any service for which the called party is charged. Since most mobile phone service plans charge on a message received/sent basis, the fact that SMS is subject to the TCPA’s prohibitions (just like land line phone calls), has caught many by surprise – including many of the most sophisticated operators in the mobile marketing space.

Lusskin v. Google [PDF] is one of the latest of these cases to be filed (Federal Court in California) and takes aim at Disco, launched by Google just this past March. In Lusskin, the plaintiffs are claiming that the Disco app gives Google the ability to “harvest all phone numbers” added by consumers so that Google “can independently send its own text message advertisements” promoting the Disco application. Individuals can use Disco to input names and mobile phone numbers (into groups); however, no permission or consent is required from someone whose name and number are added! When the group starts, Disco sends a message to members welcoming them, instructing them how the service works and how they can opt out. Once the groups are formed, messages can be sent from a single source, for a single charge, to all group members. Each member of the group receives the message and each can respond and, you guessed it, each response is sent to every other group member – an SMS mobile “chat room.”

Unbeknownst to Mr. Lusskin, he was added to one of these Disco groups and his mobile phone notified him of a text message from an unfamiliar number – the “welcome” message from Disco. Unfortunately, the “chat room” quickly turned into an angry and confused barrage of messages from the other unsuspecting group members responding to Disco’s first, unsolicited message. Messages poured in so rapidly and voluminously that Mr. Lusskin claims he was unable to use his mobile phone until the alleged 105+ SMS messages had all been received. Mr. Lusskin has filed as a class action, seeking relief for all persons who received the unsolicited initial welcoming text message from the Disco service. Mr. Lusskin also wants to include, as plaintiffs in the action, anyone who opted-out of the Disco service within 24 hours of receiving an unsolicited welcoming text message, or who was a member of a Disco group that was closed within 24 hours of its creation.

With a potential penalty of $500 in damages for each TCPA violation – each unsolicited message (and triple that number if a plaintiff can show the violation was willful or knowing) – no wonder consumers are seeking to use the TCPA to get some attention, or rather seeking to avoid getting unsolicited attention.

Are you in the mobile marketing arena? Need to understand the rules and regulations surrounding the medium? If you are an advertiser, marketer or sponsor involved in promotions, the message (content), we can help you keep abreast of Lusskin and its brethren as they seek to carve out a place under TCPA regulation. If you need help, contact Judith L. Harris, or me, Joe Rosenbaum, or any of the Rimon attorneys with whom you regularly work.

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Comcast v. FCC Fallout

This post was written by  Judith L. Harris and Amy Mushahwar.

The Federal Communications Commission (“FCC”) has just voted to open a formal proceeding regarding how best to respond to the D.C. Circuit’s decision in Comcast v. FCC (see our previous blog post, FCC Caught by (not in) the Web). In the Comcast case, the court reversed an FCC decision finding that Comcast had violated the Commission’s non-discrimination principles by interfering with traffic from broadband subscribers using an online peer-to-peer file-sharing technology from BitTorrent. The appellate court ruled the Commission, under the FCC’s previous (Republican) Chairman Kevin Martin, had improperly stretched its ancillary jurisdiction pursuant to Title I of the Communications Act to enforce one of its net neutrality principles against an Internet services provider. Earlier, the Commission had classified Internet access as an information service, only subject to light-touch Title I regulation, rather than as a telecommunications service, subject to more extensive Title II regulation, traditionally applied to common carriers.

At stake, in the minds of many, is nothing less than the future of the Internet: whether it is to be free and open and, assuming so, who is best positioned to determine what that means. In the eyes of some, especially the large Internet service providers such as Comcast, Verizon Wireless and AT&T, a free and open Internet equates to a complete government hands-off approach. Investment and innovation has flourished under the prior deregulatory steps, they argue. Others, especially edge players, including content and application providers such as Google, Amazon.com and Apple, focus on increasing Internet facilities consolidation and vertical integration in the industry. They see the need for a “cop on the beat” and explicit (e.g., net neutrality) rules to insure that those who control the “pipes” don’t interfere with consumer choice and play favorites when it comes to content.

In the two months that have ensued since the Comcast decision, handed down only two weeks after the FCC’s release of the Congressionally mandated National Broadband Plan, the debate has raged as to whether, and if so, how, the FCC should proceed to exercise oversight over the activities of Internet service providers. Not surprisingly, the question of increasing significance is where the FCC might turn for the power it needs to implement many of the recommendations contained in the National Broadband Plan. Everyone, it seems, has weighed in, from all branches of government (the White House, Congress and all the Commissioners at the FCC), to all of the private stakeholders, trade associations, coalitions that have come into existence to lobby the issue, media, academics, and Wall Street analysts (witnessing the recent volatility of ISP stocks).

Yesterday’s action by the FCC finally gets the ball really rolling. While Congress has threatened legislation (in both directions) and a court challenge is inevitable no matter where the Commission ends up, the FCC’s 3-2 decision opening this new proceeding is a necessary first step in breaking the current logjam.

The Notice of this new action is worded in neutral terms and presents three alternative solutions to the Commission’s current dilemma. The Notice also seeks other ideas from the public. However, FCC Chairman Julius Genachowski has made no secret of the course he prefers. In the aftermath of the Comcast ruling, he outlined what he dubbed a “third way,” (the third option, obviously not accidentally, in yesterday’s Notice). His approach, he believes, represents a middle road between continuing to limp along regulating ISPs under Title I, despite the limited power that would afford the FCC to implement some aspects of the National Broadband Plan, and simply reclassifying broadband as a telecommunications service under Title II, with the potential that would introduce for heavy-handed regulation – such things as oversight of rates and the imposition of interconnection and unbundling obligations. This “third way” envisioned by Chairman Genowchowski, WOULD involve Title II reclassification, but would also include explicit forbearance from use of those powers most feared by telcos and cable companies.

One thing is clear: it’s going to be a long, hot summer in Washington. The Chairman is determined to keep the proceeding moving (perhaps in part to encourage industry and public/private working groups that have already sprouted to come up with a negotiated solution). Comments from the public are due July 15, 2010, less than 30 days from now, with reply comments due August 12, 2010. An Order by the Commission is expected before year-end (and the start of a new Congress), with a decision possible as early as October. The effect of the outcome of the midterm elections and, before then, the tremendous amounts of money the upcoming election will infuse into the system from all of the stakeholders, create wildcards. The stakes are high; the decisions are likely to affect the shape of the Internet for a very long time.

Whether you want more information or need help filing comments with the FCC, look no further than our own Judith L. Harris and Amy Mushahwar in our D.C. office – authorities in the area. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.

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FCC Caught by (not in) the Web

This post was written by Judith L. Harris.

Last week, the U.S. Court of Appeals for the D.C. Circuit handed down a unanimous decision in the case of Comcast v. the FCC, holding, in effect, that the Federal Communications Commission (“FCC”) could not use its ancillary jurisdiction under Title I of the Communications Act to exercise broad oversight over the activities of Internet service providers (“ISPs”). The case involved a 2008 decision under prior FCC Chairman Kevin Martin, seeking to enforce 2005 “net neutrality” principles by banning Comcast’s blocking or slowing of traffic from broadband subscribers using BitTorrent, an online peer-to-peer file-sharing technology. You can download and/or read the entire case here Comcast v. FCC.

 At first blush, the ruling appears to be a total victory for Comcast but,as no one knows better than Comcast itself, nothing in the Nation’s capital is ever that cut and dried. Thus, Comcast was wise to respond in a conciliatory fashion: “We are gratified by the court’s decision today to vacate the previous FCC order. Comcast remains committed to the FCC’s existing open internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant internet.” .

After all, Comcast is awaiting the FCC’s judgment on Comcast’s $30 billion merger with NBC Universal. The Commission (along with the Department of Justice) has the power to sideline the deal altogether or to impose conditions that, depending on their severity, could place significant constraints on the business plan of the wanna-be merger partners. Stated another way: Comcast knows that its time for customer golf. Moreover, and possibly even more significant, the only options now available to a highly motivated FCC appear to be far more draconian to the ISP community than the relatively innocuous exercise of power that Comcast successfully challenged in court. The old adage “be careful what you wish for” comes to mind.

Not that any of this leaves the FCC smiling. From their perspective, the court’s ruling could cast a long shadow over the FCC’s ability to proceed with its pending rulemaking designed to codify even bolder net neutrality policies across all broadband platforms, including wireless. Moreover, the issue of the reach of the FCC’s jurisdiction over Internet services could constrain the FCC’s ability to deliver on President Obama’s promise of universal broadband access at high speeds and reasonable prices, and the FCC’s marquee project: implementation of the National Broadband Plan. That plan was released to Congress by the Agency just a few weeks ago (March 16), amid much fanfare and after a year’s worth of intensive effort involving no less than 36 public workshops, nine field hearings, and 31 public notices that produced 75,000 pages of public comment!

But, soldiers march forward. Only two days after the court’s decision, the FCC announced its “Broadband Action Agenda,” explaining the purpose and timing of more than 60 rulemakings and other proceedings recommended for action by the FCC in the plan, and quoting FCC Chairman Julius Genachowski defiantly proclaiming: “We are putting the National Broadband Plan into action,” immediately adding, “The court decision earlier this week does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals.” Well, maybe not.

The ISPs will undoubtedly act with all deliberate speed to nail down the Comcast victory by vigorously lobbying Capitol Hill to oppose any effort by the FCC (and potentially other providers such as Google and Amazon.com, and tech companies such as Apple), to entreat Congress to mandate network neutrality or to enact legislation giving the FCC clear authority to regulate broadband. From the ISP perspective, even worse could be an effort by the FCC to unilaterally reclassify broadband transmission as a Title II telecommunications service, empowering the FCC (at least until the next court challenge) to regulate with impunity. This latter action, often referred to around town as the “nuclear option,” would only require an affirmative vote by three of the five Commissioners, a low hurdle given the unrestrained, unambivalent public reactions of all three of the Democratic Commissioners (including the Chairman) in the immediate aftermath of the court’s pronouncement.

This week (on April 14), Chairman Genachowski is scheduled to be the only witness at a hearing before the Senate Commerce Committee. That hearing was originally planned to focus exclusively on the National Broadband Plan. But now, in addition to examining the FCC’s substantive proposals, the hearing will likely focus on its power, in light of the Comcast decision, to move forward with its implementation plans. With lobbyists swarming the halls of power, expect fireworks. Hopefully, all-out war won’t be the only avenue considered. The public and private stakeholders would do well to take a deep breath and earnestly consider an immediate, good-faith attempt at serious industry self-regulation, with agreed-upon standards of conduct and meaningful enforcement mechanisms.

Time’s a-wasting. As the FCC moves to implement the administration’s broadband agenda, over at the Federal Trade Commission, net neutrality and open Internet advocates are undoubtedly pondering how best they can use their own powers to protect consumers from potentially abusive trade practices by vertically integrated ISPs with enormous market power in a world where the FCC might, in the end, have limited enforcement tools. Who knows, the FTC and the Antitrust Division might decide that its time to burnish tried and true antitrust laws as a way of curtailing any anti-competitive conduct. Comcast, to be sure, is ahead at half time but, as  they well know, there is still much more of the game to be played.

Whether you want to stay in touch and in tune with developments, you wonder how “net neutrality” and these skirmishes might affect your business; or if you need legal advice and representation, you need look no farther than our very own Judith L. Harris – she’s the authority, and she graciously contributed this timely and insightful post. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.