November 2010

Judge in Tribune bankruptcy being pushed to his limits

The judge in Tribune Company's nearly 2-year-old bankruptcy case struggled openly at a key hearing as he attempted to referee what one participant described as a "four-ring circus" and another called "total chaos."

Faced with a proceeding that has splintered into four competing restructuring plans brought by sparring creditor factions, U.S. Bankruptcy Judge Kevin Carey acknowledged that moving the complex case forward efficiently is taxing the powers of the bench. "It's an unwanted meeting with my own limitations," he said at one particularly frustrating juncture during a seven-hour hearing in a bankruptcy courtroom filled to capacity with lawyers representing constituents in the Chicago-based media company's Chapter 11 case. Experts say the Tribune case is developing into Exhibit A for how bankruptcy law has evolved since 2005, when Congress mandated a limit for how long a court could grant debtors the exclusive right to file their own restructuring plan.

Visa to Use Your Phone's Location to Prevent Credit Card Fraud

Sure, you like all the great benefits of having your phone know where you are. Looking up directions or local weather information becomes that much faster. But outside companies and agencies are equally delighted to have access to your location information -- and not just to send you coupons. Increasingly, they’re going to be using that information for purposes that have nothing to do with your convenience and fancy. Some of those purposes you'll like. Others you might not be so keen about.

One you'll probably be okay with was just announced by Visa Europe. The credit card company is going to start using information about the location of customers’ mobile phones to prevent credit card fraud. Visa Europe has partnered with a company called ValidSoft that can establish whether your mobile phone is in the same place as the merchant or ATM where your card is being used. The assumption is that if the two devices are in close proximity, it’s probably you using the card, even if you’re far afield from your usual stomping grounds. If the two devices are not in the same place, the system may send up an alert.

Improved Management Can Enhance FCC Decision Making for the Universal Service Fund Low-Income Program.

The Government Accountability Office examined 1) how the Federal Communications Commission's Lifeline and LinkUp program participation and support payments have changed over the last 5 years (2005-2009), and factors that may have affected participation; 2) the extent to which goals and measures are used to manage the programs; and 3) the extent to which mechanisms are in place to evaluate program risks and monitor controls over compliance with program rules.

GAO surveyed state public utility commissions; reviewed key policies, procedures, and rules; and interviewed agency officials and stakeholders.

GAO suggests that the FCC should A) clearly define performance goals and develop quantifiable measures that can be used to determine the program’s success, B) conduct a needs assessment and develop implementation and evaluation plans for the proposed low-income pilot programs, C) conduct a robust risk assessment, and D) implement a systematic process to consider audit results.

(GAO-11-11)

Comcast/NBC: Don't Make Consumers the Biggest Losers

[Commentary] A year ago, cable and Internet giant Comcast announced it wanted to become even bigger by acquiring fellow media behemoth NBC/Universal. Since then the companies have been seeking approval from federal regulators. At Consumers Union we believe the answer should be no.

A combined Comcast and NBC would instantly become a telecommunications colossus, wielding unprecedented influence over the news and entertainment we see and the price we pay for it. The deep concerns about the proposed deal are about more than size. It would create a media conglomerate of incredible power and reach. Left to its own devices, Comcast/NBC could manage and manipulate the creation and delivery of entertainment, news, and information to its liking. And Comcast/NBC would be free to charge competitors higher prices to access its programming. Inevitably, those costs would be passed on to consumers. Should regulators choose to allow the merger, it must be under strong terms that protect consumers, maintain competition, and ensure a diversity of media choices. For example, regulators must press the companies to ensure that all competitors -- including potential online rivals such as Netflix or Roku -- have access to the stable of all Comcast/NBC programming with reasonable rates and terms.

Regulators must also ensure that Comcast does not interfere with any lawful Internet traffic that its subscribers choose to access. These are just a few of the many ways regulators would need to protect consumers.

Comcast Busted: New Tolls for Netflix Aren't All You Should Worry About

[Commentary] In the past 24 hours Comcast has been exposed committing blatant abuses of its power over all things media.

Here are seven reasons we must stop an out-of-control Comcast:

Killing Off Competition: NetFlix
Stifling Innovation: Zoom Modems
Consolidating Media Power: NBC Takeover
Censoring Free Speech: Vinh Pham
Lobbyists, Lawyers and Lies: Cohen's Kumbaya
Blocking Internet Access: BitTorrent
Blocking Public Access: Harvard

Models for the Internet's Future: Obama-Open or Julius-Closed

[Commentary] Apparently before the year is out, on Dec. 21, the Federal Communications Commission will issue rules to help shape the future of the Internet. These rules will decide how much control AT&T, Verizon, and Comcast will have over the websites you can visit and the online software you can use. This rule will impact the future of businesses, political actors, and people who now rely on an uncontrolled, open Internet.

There are at least two competing regulatory models for the FCC to adopt. One is a model being pushed by AT&T and Verizon -- also known as key opponents of network neutrality. This model derives from an attempted compromise offer from Congressman Henry Waxman to congressional Republicans. The proposal, never introduced, failed to gain Republican support -- but the FCC Chairman does not need congressional Republican support on a Commission that is majority Democrat. AT&T has been meeting repeatedly with top FCC staff to push this option, after spending five years and hundreds of millions in lobbying fees to oppose real network neutrality protections.

The other model comes from an agency controlled by President Obama, called the NTIA (or National Telecommunications and Information Administration), which is less well known than the FCC, an "independent" agency not under the president's direct control. Early in this administration, the Obama NTIA implemented tough rules to ensure Internet freedom on all private Internet networks under that agency's jurisdiction -- those networks were those receiving even a penny of stimulus money under the NTIA stimulus program.

Senators push FCC to vote on network neutrality in 2010

Sens John Kerry (D-MA), Byron Dorgan (D-ND), and Ron Wyden (D-OR) are urging Federal Communications Commission Chairman Julius Genachowski to create network neutrality rules before the end of the year.

In a letter to Chairman Genachowski, the senators support his push for compromise in the rules, first introduced more than one year ago. "We understand that there are some who would have you go further and some that would have you do nothing," the lawmakers wrote. "But we believe you are headed toward a principled center, and we support that effort."

Rep Blackburn Makes Pre-emptive Attack on FCC Network Neutrality Order

Rep Marsha Blackburn (R-TN), who sits on the House Commerce Committee, vowed to work to overturn any network neutrality order that the Federal Communications Commission may vote on in December. "This is a hysterical reaction by the FCC to a hypothetical problem," Rep Blackburn said. FCC Chairman Julius Genachowski "has little if any congressional support for net neutrality." Rep Blackburn said that Chairman Genachowski can expect "this folly" to be overturned next year. In order to make that happen, Blackburn said she will reintroduce her bill to "pull the FCC from the policy making process on the first day of the 112th Congress."

Most Business Have Broadband, No Plans to Upgrade, Survey Finds

The Federal Communications Commission released the results of its Business Broadband Capability Survey conducted Dec. 2009 through Jan. 2010, confirming that businesses and broadband go hand-in-hand. The survey found that almost all businesses (95 percent) reported having at least one broadband connection. Most of those businesses (73 percent) had a DSL or dedicated line connection.

Other key findings:

Over half (54 percent) of businesses do not know their purchased Internet connection speed.
63 percent of businesses report they are very satisfied with their current service
For businesses planning to upgrade their service, running new applications and improving communication with customers were the most reasons cited to do so.
85 percent of businesses surveyed were not planning to upgrade their service in the next 12 months. A skepticism that speed would improve productivity and concerns about cost were the major reasons for not upgrading.
The most common uses of broadband were for buying products or supplies, researching and advertising online.
Overall, the media for spending on broadband was $125 per month, while the mean was $2,198.
The median for small businesses spending on broadband was $95.00 per month.

Netflix is a bandwidth hog. Who will pay?

Netflix is clogging up the Internet. There's a debate raging about who should pay for it -- but ultimately, it's going to be you.

The latest skirmish is a fracas between Comcast, which connects users to the Internet, and Level 3, which signed a deal three weeks ago to host and deliver Netflix's streaming videos to networks like Comcast's. Comcast ultimately delivers those videos to its paying broadband customers. The explosion of online video -- especially the movie-length content Netflix spotlights -- isn't an easy problem to fix. The amount of video watched online has nearly doubled in a year, to 15.1 hours per user per month, according to comScore. It is costs increasingly more to host and serve that content, and to build the infrastructure for the bandwidth that allows users to download it.

Someone has to pay for that. But who should it be? That's where it gets sticky: Both Comcast and Level 3 are playing on both sides of the fence. In addition to being one of the world's largest CDNs, Level 3 is also a so-called "tier 1" Internet backbone. It's one of around a dozen companies that provides major routes for data to flow between networks like Comcast and content networks (including its own) that host websites and videos. Level 3 squawked loudly about Comcast's fee demand, calling it a "clear abuse" of Comcast's market position and an act that "threatens the open Internet."

Yet Level 3 found itself in Comcast's shoes back in 2005. Feeling its peering agreement with fellow Internet backbone Cogent Communications unfairly taxed its network, Level 3 made the exact same argument that Comcast is making today, and even temporarily pulled the plug on its connection to Cogent, cutting off some parts of the Internet for millions of Cogent customers. Comcast is also playing on both sides of the argument, since it is a competitor to Netflix. It owns several cable channels and is in the process of buying NBC Universal.

Benton

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