Ownership

Facebook may soon help its users do something unfamiliar on the platform: pay for news. The social-media giant is building a feature that would allow users to subscribe to publishers directly from the mobile app, apparently. The feature, long-requested by publishers, is expected to roll out by the end of 2017. Many details remain up in the air, but discussions have centered around making the feature available only on stories published natively to Facebook through its Instant Articles product. Talks have also focused on how to structure the arrangement, with Facebook leaning toward a metered-payment model, which would allow users to read some articles for free each month before prompting them to pay.

As Silicon Valley is increasingly bifurcated into haves and have-nots, labor rights activists are becoming more vocal about the need for these tech companies to “make the world a better place” for the tens of thousands of low-wage contract laborers that make it possible for technology companies to function. The situation among Silicon Valley’s low-wage contract workers has become so perilous that in January, thousands of security guards working at immensely profitable companies like Facebook and Cisco followed the shuttle-bus drivers and voted to unionize in an effort to collectively bargain for higher wages and better benefits. The upcoming labor contract negotiations between the roughly 3,000 security guards (represented by SEIU United Service Workers West) and their employers is one of the biggest developments in Silicon Valley labor organizing to happen in 2017.

I’ve made it a point to champion local broadcasting since I was appointed to the Federal Communications Commission more than five years ago. And I’ve doubled down on that commitment since becoming the Chairman of our great agency.

I’ll touch on a few of the initiatives we’ve been pursuing. Prior to becoming Chairman, it’s fair to say that one of my signature issues was AM radio revitalization. In May, the FCC launched a comprehensive review of our media regulations. Our goal is clear: We want to figure out how to update our rules to match the realities of today’s media marketplace. We want to modernize our regulations in order to better promote the public interest and to clear a path for more competition, innovation, and investment in the media sector.

At radio giant Cumulus Media, things have gone from bad to worse. A Nasdaq delisting looms — as does a possible bankruptcy. Cumulus owns hundreds of radio stations and syndication company Westwood One, and competes with the likes of iHeart and CBS Radio, now in the hands of Entercom. Now private equity firm Crestview Partners has adopted a poison pill to stop an activist from coming in as it staves off bankruptcy. For the year 2016 (a presidential election year), Cumulus reported that net revenue fell 2.3 percent while adjusted Ebitda — earnings before interest, tax, depreciation and amortization — was off 20.6 percent from a year earlier.

T-Mobile’s business selling service to low-income users whose costs are paid, at least in part, through the Universal Service Fund (USF) Lifeline program is “non-sustainable,” said Braxton Carter, T-Mobile chief financial officer. T-Mobile Lifeline customers represent 4.4 million of the carrier’s 73 million subscribers and “we’re going to eliminate them from the base,” said Carter.

Carter attributed the change in direction to changes in the Lifeline program associated with requirements for voice and data service. The changes to the Lifeline data apparently relate to the FCC’s plan to raise the minimum monthly allotment to 2 gigabytes in 2018 from an initial 500 megabytes. “We don’t think Lifeline is a valuable or sustainable product for our base,” he said. Based on Carter’s comments, some or all of those customers apparently are sold through companies that buy service from T-Mobile on a wholesale basis. Meanwhile, smaller rural carriers have been reluctant to offer Lifeline broadband because the rate they would have to charge for the service would be in the range of $100, which the $9.25 discount wouldn’t go far to cover – a situation the rural carriers attribute to an insufficient USF program budget.

Five Democratic Sens allege that AT&T's use of forced arbitration clauses has helped the company charge higher prices than the ones it advertises to customers. The senators pointed to a CBS News investigation that described "more than 4,000 complaints against AT&T and [subsidiary] DirecTV related to deals, promotions and overcharging in the past two years." But customers have little recourse because they are forced to settle disputes with AT&T in arbitration, according to Sens Al Franken (D-MN), Richard Blumenthal (D-CT), Ron Wyden (D-OR), Patrick Leahy (D-VT), and Edward Markey (D-MA).

"Forced arbitration provisions in telecommunications contracts erode Americans' ability to seek justice in the courts by forcing them into a privatized system that is inherently biased in favor of providers and which offers virtually no way to challenge a biased outcome," the senators wrote in a letter to AT&T CEO Randall Stephenson. "Forced arbitration requires consumers to sign away their constitutional right to hold providers accountable in court just to access modern-day essentials like mobile phone, Internet, and pay-TV services." Forced arbitration provisions such as AT&T's also "include a class action waiver; language which strips consumers of the right to band together with other consumers to challenge a provider's widespread wrongdoing," they wrote. When contacted, AT&T argued that arbitration is better for consumers than courts of law.

The Justice Department is apparently OK with Liberty Interactive's proposed purchase of Alaska telecom GCI. That came in an early termination notice released June 8. That means the DOJ has found no reason to try and block or condition the deal and put an early end to its Hart-Scott-Rodino antitrust review. The Federal Communications Commission must still weigh in on the deal. It goes beyond antitrust to look at the public interest impact of mergers in the communications space. That review will not be concluded until at least next month. On May 19, the FCC created a pleading cycle for the deal, with comments due June 19 and reply comments due July 5. The $1.1 billion deal was struck in April.

[Commentary] Recently, NCTA, the trade association for the industry formerly known as cable, posted this amazing graph and blog post showing that the "virtuous cycle" the Federal Communications Commission predicted would happen when it adopted the Open Internet rules (a.k.a. net neutrality) back in December 2010. Indeed, as the NCTA graph shows (based on the latest Akamai State of the Internet Report), the average speed of broadband connections has not only continued to rise since the FCC first adopted net neutrality rules in 2010, but the rate of increase has accelerated since the FCC adopted the Title II reclassification Order in February 2015. Finally, as NCTA also points out, in the approximately 10 years since the FCC first began to enforce net neutrality through the "Internet Policy Statement" and the Comcast/BitTorrent Complaint, the cost of moving bits from their source to your home has dropped 90 percent on a per bit basis. (Whether we are actually still paying too much because of our lack of competition in the broadband market is something of a different question.)

Perhaps unsurprisingly, this matches the findings from Free Press' Derek Turner in this massive and meticulously documented report, "Broadband Investments And Where To Find Them." But it's still nice to see NCTA confirm it.

Free Press and the other challengers to the Federal Communications Commission's decision to reinstate the UHF discount have told a federal court that it makes no sense for the FCC to reinstate a rule it concedes is obsolete "based on the mere possibility that the Commission will, in the future, open a proceeding to consider something that, as of now, a majority of the Commission believes it cannot or should not do." That came in their filing in support of a request for an emergency stay of the implementation of the UHF discount, which was scheduled to happen June 5 but was delayed by the US Court of Appeals for the DC Circuit to allow more time for it to consider that stay request and the FCC's response. The filing was also in response to Sinclair's intervention in support of the FCC and in opposition to Free Press' motion for stay.

In defending the stay to the court, Free Press attorneys pointed out that even in voting for returning the discount, FCC Commissioner Michael O'Rielly said he did not think the FCC had the authority to adjust the statutorily-set 39% cap on a TV station group owner's national audience reach, the reconsideration of which FCC Chairman Ajit Pai had given as a reason for reinstating the discount he conceded was likely obsolete and instead reviewing the discount along with the 39% cap.

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly. West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year, according to BallotPedia) with jobs in the private sector. West Virginia Senate President Mitch Carmichael (R-Jackson County) was also a sales manager for Frontier. But after six years with the company, Frontier terminated his employment on May 26. The dismissal came just weeks after Carmichael voted for a broadband infrastructure bill that was designed to bring faster speeds, lower prices, and more competition to Internet customers. It was described as a layoff in local press reports, but Carmichael said in multiple interviews that he believes the Senate vote led to his newfound unemployment.