December 2009

GAO Says FCC Needs to Improve Oversight of Wireless Phone Service; Congress Agrees

The Government Accountability Office surveyed adult wireless phone users and found 84 percent of users are very or somewhat satisfied with their wireless phone service. But GAO's survey results and analysis of Federal Communications Commission complaint data indicate that some wireless phone service consumers have experienced problems with billing, certain contract terms, and customer service.

While the percentages of dissatisfied users appear small, given the widespread use of wireless phones, these percentages represent millions of consumers. To improve wireless phone service oversight, GAO recommends that the FCC should improve its outreach to consumers about its complaint process, related performance goals and measures, and monitoring of complaints. To improve coordination with states in providing oversight, the FCC should develop guidance on federal and state oversight roles, seeking statutory authority from Congress if needed, and develop policies for communicating with states.

GAO conducted the report in response to a request by Rep. Edward Markey (D-MA) when he chaired the House Subcommittee on Telecommunications and the Internet. Rep Markey requested that GAO review consumers' satisfaction and problems with wireless phone service and efforts to oversee consumer complaints."Today's report offers important insights into consumers' level of satisfaction with their wireless phone service and federal and state efforts to track and resolve consumer complaints," said Rep Markey. "With an estimated 270 million wireless phone subscribers nationwide, even the small percentage of consumers who reported being dissatisfied with aspects of their wireless phone service represents millions of Americans across the country. GAO has pinpointed one key reason for consumer dissatisfaction - early termination fees charged by carriers - which raises concerns both from a consumer protection and a competition standpoint. In the digital age, where technology can change overnight, consumers should not be chained to their wireless provider for years through exorbitant early termination fees. I look forward to continuing to work with my colleagues on these important consumer and competitive issues in the wireless marketplace." According to the report, GAO estimated that among wireless users who wanted to switch carriers during their contract period but did not do so, 42% didn't switch because they did not want to pay an early termination fee."

Senate Commerce Committee Chairman Jay Rockefeller (D-WV) said, "It's a real problem to me that millions of consumers are unaware of their options when they experience problems with their wireless phone service, and that the FCC has inadequately protected those consumers who have sought the agency's help. The FCC can - and must - do more to make sure consumer concerns are resolved by wireless carriers and oversee the wireless industry with a greater focus on consumer protection. While I am encouraged that the FCC has recently begun to focus on this problem and has sought comment on how to address some of the issues highlighted in the GAO report, it is time for the agency to take real action to better protect wireless consumers."

[GAO-10-34]

Who'll Define 'Universal Service'?

[Commentary] Today, most of us think of "universal service" as a right — a moral, and frequently legal guarantee of a nation's citizenry to be provided with access to basic technological goods and services like electricity, telephone and, now, broadband. Yet the notion of universal service itself is not, in fact, universal. Not only has our nation's technological infrastructure changed dramatically throughout the past 150 years, so too have the rationales and interests of what universal service means. With Congress potentially set to redefine the legal criteria for universal service early next year, we might pause for a moment to reflect on the term's changing meanings and consider how universal service should be refashioned for the 21st century to best serve the pressing needs of rural communities. New definitions of universal service should be designed to provide quality, affordable telephone and broadband access to those citizens overlooked by the logic of the marketplace. We must ensure that universal service does not again simply become an empty slogan that legally protects and perpetuates the status quo.

World Bank Official: Developing Countries Want National Broadband Insight

Developing countries frequently ask the World Bank for advice on how to roll out a national broadband strategy, said a speaker Thursday at a Federal Communications Commission workshop on the benefits of global broadband connectivity. Valerie D'Costa of the World Bank's Information for Development Program said there is a need for more "creative and collaborative models to be developed" for developing countries to look to when considering a national broadband rollout. These models should focus on ways to be cost effective, pro-competitive and help grow local markets, said D'Costa. She previously served as director of the international division for Singapore's government agency charged with the development, promotion, and regulation of the countries information and communications technology sector. D'Costa said Singapore tends to look at broadband issues "holistically" and weighs how all related issues for one action will help the country and build up its connectivity. Singapore is strongly supportive of public-private partnerships, she added.

Senate Judiciary Committee Passes Shield Law, Protects Bloggers

Benjamin Franklin was more than just one of the country's Founding Fathers. He was also a blogger. At least that's how Franklin was described during a Senate Judiciary Committee hearing about whether a reporters' shield law should exclude bloggers, citizen journalists and other nonprofessionals. The committee voted to pass the proposed law, the Free Flow of Information Act, after rejecting an amendment proposed by Sens Dianne Feinstein (D-CA) and Dick Durbin (D-IL) that would have defined journalists as people working for news organizations. Some commentators said the amendment's definition was so restrictive that it could have excluded even professionals who wrote for online-only publications. The proposed shield law itself is relatively narrow, providing only that journalists can sometimes protect the identity of their sources. Sen Feinstein said at the hearing that she favored a narrow definition of journalist because including amateurs and others would mark a "weakening of the profession of journalism." But other lawmakers successfully countered that bloggers, freelancers and amateur writers should have the same opportunity to protect their sources as professionals on staff. The bill still must be voted in the full Senate then reconciled with a different version passed in the House.

Children Now, UCC Want FCC To Look Into Shows Stations Say Meet Educational Requirements

Children Now and the United Church of Christ have asked Federal Communications Commission Chairman Julius Genachowski to act on two complaints pending for four and five years, respectively, challenging the shows a trio of TV stations offered up as meeting FCC educational kids show requirements. Chairman Genachowski has opened a proceeding into content control technologies as part of a broader review of kids TV rules in the digital age. In a letter to the chairman, the groups note the proceeding, but push for resolution of their petitions to deny license renewals for three stations to both demonstrate that the FCC is serious about its educational/informational (E/I) requirement and to give broadcasters more guidance on what will and won't pass muster. UCC and Children Now have long been critical of the self-certification process and of the shows broadcasters argue are E/I compliant. That self-certification has led to some interesting calls, including billing The Flintstones as a history lesson or a baseball pre-game show as educational because it teaches how to throw a curve ball.

Apple Plots Reboot of iTunes for Web

Apparently, Apple, the company that restructured the music industry around its iTunes service, is exploring an overhaul of the way it sells and stores music that is aimed at extending its influence to the Web. The key vehicle for the move is Apple's newly acquired music-streaming service La La Media Inc. for which Apple paid $85 million. Where Apple's iTunes requires users to download music onto a specific computer, Lala.com lets users buy and listen to music through a Web browser, meaning its customers can access purchases from anywhere, as long as they are connected to the Internet. Apple is considering adopting that same model for songs sold on iTunes, a change that would give consumers more ways to access and manage their iTunes purchases—and wouldn't require them to download Apple's software or their purchases. That new business model extends Apple's grip on the music business, giving it the ability to sell music through search engines and other Web sites and broaden its reach beyond people who come to its virtual store.

Apple's acquisition and integration of Lala reflects not just a shift in strategy for the company, but a paradigm shift for music consumption. Here's how:

1) Browser-based services are eclipsing desktop software as a way to hear music on a computer.

2) Apple is threatened by mobile applications that do what iTunes cannot.

3) The transition toward streaming rather than owning is slow, but real.

4) Apple is still betting on owning music in a new way, rather than subscribing to it.

5) Older MP3 players aren't connected to the future.

Lala's model becomes much stronger inside of Apple's system, while Apple gains flexibility to give music fans more options. Just as the turn of the last decade marked a shift to MP3s from CDs, as the aughts draw to a close, consumers are ready for cloud-based music to displace file ownership, partially if not completely. And with this acquisition, digital music's largest player is accepting that change.

How AT&T May Limit Your Mobile Data

Mobile operators are overwhelmed by data usage on their networks, but rightly fear that implementing restrictions could lead to widespread public dissent, or even worse, force users to suddenly stop using the oh-so-profitable mobile data services. Instead of beating bandwidth hogs with a stick, perhaps they can offer a carrot to get them to take it easy on the network. Carriers have more tools now than ever to train users to think of mobile broadband as a scarce resource rather than a fat pipe for everything. So instead of forbidding video across the network or applying caps, carriers like AT&T could implement tiers of data usage that offer fast service for VoIP, video and web surfing for up to a certain number of gigabytes. The high-end plan could offer 5GB per month, and after that point users could pay more to keep their traffic flowing along quickly or they could surf at best-effort rates.

Technology a winner in conferees' consolidated spending bill

Among the high points for information technology in the Consolidated Appropriations Act approved by the House on Thursday are:

1) appropriations for the Health and Human Services, Housing and Urban Development, Justice, Labor and State departments,

2) a mandate that the Federal Communications Commission conduct an auction of cellular spectrum so police and fire departments nationwide could have their own interoperable communications network,

3) Justice received most of what it requested for its Tactical Law Enforcement Wireless Communications project, receiving $206.1 million for fiscal 2010, and boosted the budget for the Integrated Wireless Network by $21.1 million, with the condition that the money be spent on modernization of land mobile radio systems and not cellular systems,

4) a $140.3 million cybersecurity budget for the FBI, 5) $27.4 million for cybersecurity funding for Justice, and

5) $61.3 million for the Office of the National Coordinator for Health Information Technology.

Transparency Bill Moves Onward

A House committee on Thursday passed a bill that would make it easier for citizens to download and search information on the finances of companies given government money. The House Oversight and Government Reform Committee agreed to add the measure to a bill that is moving faster, S. 303, the 2009 Federal Financial Management Improvement Act. The financial transparency bill, known as the Government Information Transparency Act, H.R. 2392, now goes to the House for full consideration.

'Editor & Publisher' to Cease Publication After 125 Years

Editor & Publisher, the bible of the newspaper industry and a journalism institution that traces its origins back to 1884, is ceasing publication. An announcement, made by parent company The Nielsen Co., was made Thursday morning as staffers were informed that E&P, in both print and online, was shutting down. Nielsen Business Media, of which E&P was a part, has forged a deal with e5 Global Media Holdings, LLC, a new company formed jointly by Pluribus Capital Management and Guggenheim Partners, for the sale of eight brands in the Media and Entertainment Group, including E&P sister magazines Adweek, Brandweek, Mediaweek, Backstage, Billboard, Film Journal International and The Hollywood Reporter. E&P was not included in this transaction. Staff members will stay on for the remainder of 2009. Editor & Publisher was launched in 1901 but traces its history to 1884 -- it merged with the magazine The Journalist, which had started on that earlier date.

Benton

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