The FCC’s inquiry involves Google’s call-blocking policy.  In June, Google began noticing extremely high-cost calls to a concentrated number of rural destinations which generated vastly disproportionate costs.  Its internal investigations, using data filters to sort out call patterns, revealed that the top 10 telephone prefixes (the area code plus the first three digits of a seven digit number) to US destinations generated more than 160 times the expected amount and accounted for 26.2 percent of its monthly U.S. costs.  By August, Google began restricting calls to certain high-cost destinations.  Google’s response letter to the FCC describes the Google Voice service and explains Google’s investigation into and rationale behind its call blocking policy.  It claims that its engineers developed a “tailored solution” so that Google Voice currently restricts calls to fewer than 100 specific phone numbers, a practice which Google’s counsel believes is necessary to “prevent these schemes from exploiting the free nature of Google Voice.” 

While Google has only recently began blocking costly calls, the practice whereby rural telecoms charge long distance carriers exorbitant rates to connect and terminate calls from their networks is not new.  In may cases these telecoms partner and share revenue with adult chat service, conference calling centers and others to attract traffic to their networks.  AT&T, and other long-distance carriers, have long complained and sued over these so-called traffic pumping schemes.  However, as common carriers subject to FCC regulations, they were banned in 2007 from blocking calls and are required to deliver phone calls without discrimination to all numbers dialed.  AT&T’s complaint to the FCC is rooted in its contention that Google’s call blocking policy is enabling it to dance around this ban that applies to other carriers.

However, this recent skirmish over Google Voice is really part of a larger debate currently playing out in the regulatory stage over “network neutrality” rules being reexamined by the FCC and AT&T has framed Google’s actions as part of the debate. 

In its Statement on Google Voice and Net Neutrality, AT&T stated that “By openly flaunting the call blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the spirit, if not the letter, of the FCC’s fourth principle contained in its Internet Policy Statement.“   The FCC’s fourth principle on net neutrality states that “consumers are entitled to competition among network providers, applications, and service providers, and content providers.“  

Some members of Congress are also concerned about the adverse impact on the market and support for universal service if Google is allowed to operate its telephone services outside of the rules that govern carriers.  As they stated in their letter to the FCC “[I]t is our opinion that a company should not be able to evade compliance with important principles of access and competition set forth by the FCC by simply self-declaring it is not subject to them without further investigation.”

Google responded to these charges by stating that “The FCC’s open Internet principles apply only to the behavior of broadband carriers – not the creators of Web-based software applications.” Google claims that AT&T is attempting to blur the distinction between Google Voice and traditional phone service but maintains that web applications like Google Voice and Skype shouldn’t be treated like traditional phone service.

Google distinguishes Google Voice from traditional phone carriers by explaining that unlike traditional carriers which charge users for their services, Google Voice is a free, web-based software application similar to e-mail rather than a telecom service designed to “supplement and enhance existing phone lines, not replace them” and should therefore be exempt from common carrier rules.   The service is currently available to a limited number of users on an invitation-only basis.  Users are still required to have an existing land or wireless line in order to use Google Voice and are still able to make outbound calls on any other phone device.  Therefore, because Google Voice is a software application, not a telephone company, Google believes that its service is not and should not be subject to common carrier laws or the FCC’s jurisdiction.

Distinctions aside, with nearly 1.5 million users, the increasingly popular service is viewed by some as running a rival service to traditional phone companies.  The heart of the FCC’s inquiry is whether Google Voice is a telecom service or an online software application and whether this distinction really matters.  How different is a call traveling directly over carrier lines from one that goes through software applications?  As of now, the difference appears to be the ability to block less than 100 calls, an option not available to AT&T and other carriers.

Whether the FCC agrees with Google’s characterization of its service and its interpretation of the current open Internet principles may have a dramatic impact on both the telecom and internet marketplaces.  And the FCC’s newly proposed rules on network neutrality may also play a prominent role in this debate.  We will continue to monitor the proceedings and keep you posted.

• Mergers and acquisitions and other business combination transactions, and equity investments
• Acquisition and financing of television programming
• Acquisition of newspaper assets and operations
• Technology and IP-related consulting, licensing and asset purchase agreements
• Digital audio-visual content licensing and distribution
• Review and assessment of IP portfolios in connection with M&A transactions
• Corporate governance and general corporate matters

Cindy graduated magna cum laude from Yale University with a B.A. in Economics.  She is a graduate of Stanford Law School where she was an associate editor for the Stanford Journal of Law, Business and Finance.

Bar Admissions

• California

A testament to the significance of this concern is last week’s victory of the Office of the Privacy Commissioner of Canada.  Facebook was charged with violating Canada’s privacy laws, both with respect to the disclosure of personally identifiable information of Facebook users to over one million third party Facebook application developers, as well as keeping a user’s personal information indefinitely (including after deactivation of a user’s account).  Along with the attention of other social network providers, Canada’s investigation certainly elicited global attention, as it became the first country to legally examine Facebook’s privacy policies and procedures.  This investigation has also led the Canadian privacy commission to examine the privacy policies and practices of six other social networking sites.  The Privacy Commissioner’s chief complaint was that the way in which Facebook provides information about its privacy policies to its users is often confusing or incomplete.

As a result of the investigation, Facebook announced that it will implement new privacy safeguards and modify its privacy policy accordingly.  Among other things, Facebook has agreed to compel third-party developers to disclose to Facebook users the precise types of information they plan to access and use.  Under the current policy, users who want to utilize the third-party applications via their Facebook account are required to agree to share all of their data with such third party developers. 

The new procedures are intended to ensure that users are given the opportunity to consent to use of each type of personal information (such as date of birth, hometown, etc.), but more importantly have the ability to refrain from approving the use/disclosure of certain types of information while still being able to utilize the third party applications.  Facebook will also provide users clearer explanations and information in terms of deactivating their user accounts, specifically to make it clearer to users the difference between deactivation and deleting their information permanently.  Although Facebook plans to begin updating their privacy policy within the next month or so, implementing the technical changes will be performed over the course of the next year. 

While Facebook was the primary target of the investigation, we believe that the Canadian government’s actions, and Facebook’s response, will have a substantial ripple effect, with businesses carefully reconsidering their terms of use and privacy policies to ensure compliance with both the letter and spirit of privacy laws and regulations throughout the world. 

• Structuring relationships between developers and publishers and the ownership issues that arise in development agreements, including work-for-hire, joint ownership and cross-licensing issues;
• Protecting against developer default or insolvency, including the pros and cons of source code escrow arrangements and the applicability of Section 365(n) of the Bankruptcy Code;
• How clearances and consents have become critically important with the increased incorporation in games of real world elements (cities, buildings, people, etc.) and third party IP (e.g. music, video clips, characters, logos, etc.), with an examination of recent case law (Kirby v. Sega and Grand Theft Auto/Pig Pen); and
• Strategies to maximize revenues from online and mobile games, including sponsored exclusive features and content, “in-game” ads, syndicated games, and tiered subscriptions.

The one-hour Webinar will also feature “live chat” functionality to enable viewers to ask questions and comment on the presentation in real-time.  Presentation materials will be available for download.

The Webinar will be held on September 16, 2009 from 1:00 pm to 2:00 pm EDT.  To register, click here.

Mr. Siegel is a “master at financing and structuring,” Chambers USA says in its latest edition. “Clark Siegel is widely recognized as an imposing presence in the field,” the publication observes. In addition to the Chambers guide, Mr. Siegel is recognized by many other legal publications including Best Lawyers in America, the Legal 500 U.S. guide, Los Angeles Magazine’s “Southern California Super Lawyers” and The Los Angeles Times “Best Lawyers in the West.”

“The demand for sophisticated, cutting-edge expertise in the areas of content, the Internet and technology continues to be of critical concern to our clients,” said Hughes Hubbard Chair Candace Beinecke. “We believe that with Dan Schnapp in New York, and now Clark Siegel in L.A., we can offer our clients an unparalleled bi-coastal capability in this area.”

Mr. Siegel has published widely on Intellectual Property matters and issues. Specific technologies and applications he has been involved with include digital cinema projection, CGI animation, video on demand and electronic sell-through, DVD, satellite and wireless delivery, peer-to-peer distribution, digital cable, digital video recorders, PDAs, cellular phones, interactive television, fiber-optic transmission, and other digital and analog applications. He received his B.A. in 1980 from Stanford University, Phi Beta Kappa, and his J.D. in 1984 from University of Chicago where he was a member of the University of Chicago Law Review.  Clark’s full bio and contact information is here. 

We anticipate that Clark will become a regular contributor to DigitalHHR, providing insights from his vantage point on the Left Coast.  We look forward to working with him.

Mr. Siegel is nationally recognized as a leader in matters involving the convergence of technology and entertainment and the delivery and exploitation of content through new technologies, media and platforms. His combined expertise in the core fields of entertainment, technology, media and communications, and intellectual property have given him an interdisciplinary perspective and a unique ability to structure business relationships, models, and transactions and provide comprehensive legal and business counseling in this complex and cutting edge area. Specific technologies and applications that Mr. Siegel has been involved with (on behalf of both content and technology companies) include the digital cinema projection, CGI animation, video on demand and electronic sell-through, high definition DVD, satellite and wireless delivery, peer-to-peer distribution, digital cable, digital video recorders, cellular phones, interactive television, fiber-optic transmission, and other digital and analog applications.

In addition, Mr. Siegel has been involved in legal matters and transactions relating to the Internet since the early 1990s, making him one of the most experienced and knowledgeable attorneys practicing in this area. He has represented a number of the primary players in the Internet sector, including ISPs and portals, e-commerce companies, infrastructure and equipment companies, and content and entertainment providers, as well as numerous start-up and emerging growth companies. Transactional matters handled by Mr. Siegel for Internet clients include venture capital financings, strategic alliances and joint ventures, cross-marketing and interactive marketing deals, linking agreements, carriage and distribution arrangements, technology and website development agreements, content and technology licenses, e-commerce agreements, counseling relating to privacy issues, user generated content and social networking, and numerous other matters.

In addition to his work in the area of technology/entertainment convergence and the Internet, Mr. Siegel continues to practice actively in his sub-specialty areas of entertainment, technology, media and communications, and intellectual property.

In traditional entertainment, for over 25 years, Mr. Siegel has represented motion picture and television production companies, studios, networks and distributors, investors and financiers, and other parties in connection with development, production and services agreements, rights acquisitions and clearances, licensing and distribution arrangements, output agreements, co-productions, financing transactions, joint ventures, library acquisitions and sales, commercial tie-ins, output agreements, housekeeping deals, workout transactions, special effects, and other matters. He also has extensive experience in related areas such as book publishing, merchandising, music publishing, computer and video games, and other interactive software products.

Mr. Siegel’s experience in technology transactions includes numerous software development and licensing agreements, reseller and distribution agreements (e.g., OEM, VAR, and sales rep. agreements), technology development agreements, joint ventures and strategic alliances, manufacturing and supply agreements, patent and trademark licensing, outsourcing transactions, technology procurement agreements, service and maintenance agreements, technology transfers, beta test agreements, open source development arrangements, and other technology transactions.

In media and communications, Mr. Siegel has represented MSO cable and satellite operators and broadcasters and programming services, in connection with programming acquisitions, carriage and affiliation agreements, cable franchise acquisitions and transfers, system swaps, transponder leases, mergers and acquisitions, financing transactions, and other matters. He has also worked on various matters and projects in the telecommunications field such as agreements for the construction and operation of high-speed communications infrastructures and networks, satellite carriage of communications signals, telecommunications services agreements, interconnection and networking agreements, hosting agreements, fiber-optic leases and easements, financing transactions, and other matters.

Throughout all of these practice areas, Mr. Siegel has developed a thorough understanding of copyright, trademark, trade secret and other intellectual property laws. He is frequently involved in licensing and other transactional matters relating to intellectual property, as well as general counseling regarding intellectual property matters and issues.

Publications

• “The Use and Advantages of Arbitration in International Commercial Contracts,” Inside the Minds: International Trade Legal Strategies, published by Aspatore Books, 2007.
• “Mobile Phone Ring Tones – Digital Technology Once Again Pushes the Envelope of Copyright Law,” IP New Matter, Volume 28. No. 1, September 2003.
• “U.S. Privacy Standards and Practices,” published by Law Seminars International, November 2001.
• “The Scope and Implications of Internet Privacy,” International Bar Association publication, July 2000.
• Various Articles, Handbook on Entertainment, Publishing and the Arts, published by Clark Boardman Callaghan (1997 edition).
• “Net Losses” (discussing copyright infringement on the Internet), California Law Business, February 1996.
• “Incorporation of Pre-Existing Content in Multimedia Products,” California Law Business, September 1996.

 Lectures and Seminars

• The Changing Landscape of Film and Television Distribution in the Global Arena: Thinking Outside the Proverbial Box, presentation at Beverly Hills Bar Association symposium, November 2008 (Beverly Hills, California).
• Negotiating Talent Deals: New World and Old World Templates, presentation and panel moderator at the 50th Anniversary Institute on Entertainment Law and Business of the University of Southern California Gould School of Law, October 2008 (Los Angeles, California).
• Rights Clearance: Recent Decisions and Case Law, presentation at 22nd Annual Conference on International Audiovisual Law, International Chamber of Commerce, May 2008 (Cannes, France).
• Reality TV – Unique Legal Issues, presentation at Film and Television Law Conference, CLE International, October 2007 (Los Angeles, California).
• The Legalities of Reality TV, presentation at Film and Television Law Conference, CLE International, June 2005 (Los Angeles, California).
• Co-Chair, Conference on IT Governance, International Bar Association Convention, October 2004 (Auckland, New Zealand).
• Electronic Records Management, presentation at International Bar Association Convention, October 2004 (Auckland, New Zealand).
• Reality TV – Unique Legal Issues, presentation at Film and Television Law Conference, CLE International, June 2004 (Los Angeles, California).
• IP Issues in Structuring Deals and Drafting Agreements, Continuing Education of the Bar Seminar, May 2003 (Irvine, California – also presented in Los Angeles, California).
• Internet Piracy, presentation at LegalTech LA Conference, May 2003 (Los Angeles, California).
• Protecting Rights in the Digital Economy, presentation at Conference on High Technology and the Emerging Digital Economy, International Bar Association, October 2002 (Los Angeles, California).
• Unsolicited Commercial E-Mail and the Law, presentation at FBI-Intragard Meeting, October 2002 (Los Angeles, California).
• Challenges Posed by Peer-to-Peer Distribution, presentation at International Bar Association Convention, October 2002 (Durban, South Africa).
• US Privacy Laws, presentation at Computer Law Conference, Law Seminars International, November 2001 (Seattle, Washington).
• Essential Motion Picture Agreements, presentation at Entertainment Law Symposium, Law Seminars International, August 2001 (Los Angeles, California).
• Internet Privacy Issues, presentation at International Bar Association Convention, October 2000 (Amsterdam, The Netherlands).
• Digital Distribution of Content, presentation at International Bar Association Convention, October 2000 (Amsterdam, The Netherlands).
• Protective Provisions for Cross-Border Licensing Transactions, presentation to divisions of Viacom, Inc., February 2000 (Los Angeles, California).
• Privacy Issues, presentation at Computer Law Conference, Law Seminars International, July 1999 (Los Angeles, California).
• Legal Issues Affecting New Media, panelist, LA County Bar Association Forum, August 1998 (Los Angeles, California).
• Protection of Content on the Internet, presentation at Internet and Digital Television Summit: The New Deal, January 1997 (Paris, France).
• The Internet and World Wide Web, presentation before Japanese Executives Society, June 1996 (Dana Point, California).
• Use of Motion Pictures as Collateral for Secured Loans, presentation before Entertainment Lenders Society, April 1995 (Los Angeles, California).

Education

• Stanford University, B.A., 1980, highest honors, Phi Beta Kappa
• University of Chicago Law School, J.D., 1984, highest honors, Order of the Coif, Member of the University of Chicago Law Review

Bar Admissions

• California, 1984

Advances over the last decade in the media, entertainment and technology industries have been unparalleled. The new media landscape is dynamically shifting in real time and all businesses must anticipate and react to innovations in technology in order to seize new opportunities and develop unique business models.

Hughes Hubbard and Reed’s New Media, Entertainment and Technology group recognizes the pace at which these advancements are affecting the day-to-day operations of our clients. We specialize in helping clients exploit such developments to stay ahead of the curve by understanding the way technology influences business. It is not merely the convergence of the media, entertainment and technology industries, but the impact of such convergence on the global consumer, which drives the marketplace forward. We combine the resources and experience of a traditional law firm with an understanding and passion for today’s cutting-edge technologies to assist our clients in navigating the new realities and challenges arising from this shifting landscape.

Digital Media and Internet

• Digital audio-visual content licensing, distribution and syndication initiatives on all new media platforms including wireless, broadband, satellite radio and IPTV
• Online social networking services, virtual reality communities, blogging, massively multiplayer online games (MMOGs)
• Mergers & acquisitions, strategic alliances, online sponsorships/promotional collaborations and joint ventures
• Embeddable media player development, deployment and syndication
• Electronic publishing and distribution
• Integrated marketing, contextual advertising and brand management
• Viral marketing and Internet based “word of mouth” campaigns
• Ad serving, syndication, publication, targeting and tracking
• User-generated content ingestion, distribution, syndication and liability-related issues
• Digital content screening, moderation and filtering
• Online gaming, sweepstakes, contests and promotion compliance
• Digital Millennium Copyright Act – safe harbors and anti-circumvention issues
• Adoption and content of website Terms of Use agreements

Entertainment

• Development and production matters for motion picture and television productions, including writer, producer and director arrangements, guild issues, special effects agreements, location agreements, and other production related matters and documentation
• Domestic and international motion picture distribution in all media, including output deals and ancillary exploitation
• Cable and television broadcast, syndication and other distribution
• Motion picture and television finance, including single- and multi-project finance and all forms of debt, equity and mezzanine financing
• Strategic alliances and motion picture and television co-production and co-financing arrangements
• Major record label sound recording, publishing and associated rights clearances
• Independent music recording, publishing and licensing
• Video game development, publishing ,distribution and licensing for all platforms, including console, handheld ,wireless and online games
• Professional sports league television licensing and retransmission
• Professional athlete employment contracts and talent agreements, including spokesperson, appearance and sponsorship agreements
• Literary and other underlying rights acquisition and licensing
• Rights clearance for motion pictures, television productions and video games
• Product, character and technology merchandising and licensing
• Television format licensing
• Overall and housekeeping deals with talent elements and production companies
• Motion picture and television library acquisitions and dispositions
• Network, cable system and satellite affiliation and carriage agreements
• Product placement and commercial tie-ins
• Motion picture and television marketing agreements and arrangements
• Registration and licensing of patents, trademarks and copyrights
• Litigation concerning the interpretation of recording, film and distribution contracts
• Theme park, gaming and hotel operation

Technology and Information Security

• Privacy, data and information security compliance
• Information technology, business process, call center and manufacturing outsourcing transactions
• Website development, hosting and colocation arrangements
• Electronic commerce, publishing and distribution
• Technology and data export compliance
• Record retention and disaster recovery/contingency planning compliance
• Wireless device and network applications
• Software/hardware and intellectual property procurement, development, licensing and distribution
• Micropayment, contactless payment, smart cards and other alternative electronic payment technology implementations
• Technology transfers and acquisitions
• Technology service and maintenance agreements
• Domain name disputes

New Media, Entertainment and Technology Attorneys

• Dan Schnapp
• Clark Siegel
• Wayne Josel
• Hali Resnick
• Matthew Syrkin
• Cindy Lo
• Kari Hirsch
• Other Attorneys