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December 2010

FCC Adopts First Regulations to Preserve Internet Freedom and Openness

The Federal Communications Commission today acted to preserve the Internet as an open network enabling consumer choice, freedom of expression, user control, competition and the freedom to innovate. The rules ensure that Internet openness will continue, providing greater certainty to consumers, innovators, investors, and broadband providers, including the flexibility providers need to effectively manage their networks. These rules were developed following a public rulemaking process that began in fall 2009 and included input from more than 100,000 individuals and organizations and several public workshops.

The rules require all broadband providers to publicly disclose network management practices, restrict broadband providers from blocking Internet content and applications, and bar fixed broadband providers from engaging in unreasonable discrimination in transmitting lawful network traffic. The rules ensure much-needed transparency and continued Internet openness, while making clear that broadband providers can effectively manage their networks and respond to market demands The Order builds on the bipartisan Internet Policy Statement the Commission adopted in 2005. It concludes that adopting open Internet protections to ensure the continued vitality of the Internet is needed in light of instances of broadband providers interfering with the Internet’s openness and natural incentives they face to exert gatekeeper control over Internet content, applications, and services.

Following are key excerpts from the Report and Order adopted by the Commission to preserve the open Internet:

Rule 1: Transparency
A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking
A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network.

Rule 3: No Unreasonable Discrimination
A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

Select Definitions

Broadband Internet access service: A mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence, or that is used to evade the protections set forth in this Part.

Reasonable network management.
A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service. Legitimate network management purposes include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users (including by premise operators), such as by providing services or capabilities consistent with a user’s choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network.

Pay for Priority Unlikely to Satisfy “No Unreasonable Discrimination” Rule
A commercial arrangement between a broadband provider and a third party to directly or indirectly favor some traffic over other traffic in the connection to a subscriber of the broadband provider (i.e., “pay for priority”) would raise significant cause for concern. First, pay for priority would represent a significant departure from historical and current practice. Since the beginning of the Internet, Internet access providers have typically not charged particular content or application providers fees to reach the providers’ consumer retail service subscribers or struck pay-for-priority deals, and the record does not contain evidence that U.S. broadband providers currently engage in such arrangements. Second this departure from longstanding norms could cause great harm to innovation and investment in and on the Internet. As discussed above, pay-for-priority arrangements could raise barriers to entry on the Internet by requiring fees from edge providers, as well as transaction costs arising from the need to reach agreements with one or more broadband providers to access a critical mass of potential users. Fees imposed on edge providers may be excessive because few edge providers have the ability to bargain for lesser fees, and because no broadband provider internalizes the full costs of reduced innovation and the exit of edge providers from the market. Third, pay-for-priority arrangements may particularly harm noncommercial end users, including individual bloggers, libraries, schools, advocacy organizations, and other speakers, especially those who communicate through video or other content sensitive to network congestion. Even open Internet skeptics acknowledge that pay for priority may disadvantage noncommercial uses of the network, which are typically less able to pay for priority, and for which the Internet is a uniquely important platform. Fourth, broadband providers that sought to offer pay-for-priority services would have an incentive to limit the quality of service provided to non-prioritized traffic.

In light of each of these concerns, as a general matter, it is unlikely that pay for priority would satisfy the “no unreasonable discrimination” standard. The practice of a broadband Internet access service provider prioritizing its own content, applications, or services, or those of its affiliates, would raise the same significant concerns and would be subject to the same standards and considerations in evaluating reasonableness as third-party pay-for-priority arrangements.

Measured Steps for Mobile Broadband
Mobile broadband presents special considerations that suggest differences in how and when open Internet protections should apply. Mobile broadband is an earlier-stage platform than fixed broadband, and it is rapidly evolving. For most of the history of the Internet, access has been predominantly through fixed platforms -- first dial-up, then cable modem and DSL services. As of a few years ago, most consumers used their mobile phones primarily to make phone calls and send text messages, and most mobile providers offered Internet access only via “walled gardens” or stripped down websites. Today, however, mobile broadband is an important Internet access platform that is helping drive broadband adoption, and data usage is growing rapidly. The mobile ecosystem is experiencing very rapid innovation and change, including an expanding array of smartphones, aircard modems, and other devices that allow mobile broadband providers to enable Internet access; the emergence and rapid growth of dedicated-purpose mobile devices like e-readers; the development of mobile application (“app”) stores and hundreds of thousands of mobile apps; and the evolution of new business models for mobile broadband providers, including usage-based pricing.

Moreover, most consumers have more choices for mobile broadband than for fixed broadband. Mobile broadband speeds, capacity, and penetration are typically much lower than for fixed broadband, though some providers have begun offering 4G service that will enable offerings with higher speeds and capacity and lower latency than previous generations of mobile service. In addition, existing mobile networks present operational constraints that fixed broadband networks do not typically encounter. This puts greater pressure on the concept of “reasonable network management” for mobile providers, and creates additional challenges in applying a broader set of rules to mobile at this time. Further, we recognize that there have been meaningful recent moves toward openness, including the introduction of open operating systems like Android. In addition, we anticipate soon seeing the effects on the market of the openness conditions we imposed on mobile providers that operate on upper 700 MHz C-Block spectrum, which includes Verizon Wireless, one of the largest mobile wireless carriers in the U.S. In light of these considerations, we conclude it is appropriate to take measured steps at this time to protect the openness of the Internet when accessed through mobile broadband.

Specialized Services
In the Open Internet NPRM, the Commission recognized that broadband providers offer services that share capacity with broadband Internet access service over providers’ last-mile facilities, and may develop and offer other such services in the future. These “specialized services,” such as some broadband providers’ existing facilities-based VoIP and Internet Protocol-video offerings, differ from broadband Internet access service and may drive additional private investment in broadband networks and provide consumers valued services, supplementing the benefits of the open Internet. At the same time, specialized services may raise concerns regarding bypassing open Internet protections, supplanting the open Internet, and enabling anticompetitive conduct. We note also that our rules define broadband Internet access service to encompass “any service that the Commission finds to be providing a functional equivalent of [broadband Internet access service], or that is used to evade the protections set forth in these rules.”

We will closely monitor the robustness and affordability of broadband Internet access services, with a particular focus on any signs that specialized services are in any way retarding the growth of or constricting capacity available for broadband Internet access service. We fully expect that broadband providers will increase capacity offered for broadband Internet access service if they expand network capacity to accommodate specialized services. We would be concerned if capacity for broadband Internet access service did not keep pace. We also expect broadband providers to disclose information about specialized services’ impact, if any, on last-mile capacity available for, and the performance of, broadband Internet access service. We may consider additional disclosure requirements in this area in our related proceeding regarding consumer transparency and disclosure. We would also be concerned by any marketing, advertising, or other messaging by broadband providers suggesting that one or more specialized services, taken alone or together, and not provided in accordance with our open Internet rules, is “Internet” service or a substitute for broadband Internet access service. Finally, we will monitor the potential for anticompetitive or otherwise harmful effects from specialized services, including from any arrangements a broadband provider may seek to enter into with third parties to offer such services. The Open Internet Advisory Committee will aid us in monitoring these issues.

Additional coverage:
FCC Braces for Fight (New York Times)
http://mediadecoder.blogs.nytimes.com/2010/12/21/f-c-c-approves-net-rule...
Internet Gets New Rules of the Road (WSJ)
http://online.wsj.com/article/SB1000142405274870358120457603351399066865...
FCC approves net-neutrality rules; criticism is immediate (WashPost)
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/21/AR201012...
US sets rules on web traffic management (Financial Times)
http://www.ft.com/cms/s/0/8b0dd674-0d50-11e0-82ff-00144feabdc0.html
Net neutrality vote irks many (USAToday)
http://www.usatoday.com/printedition/money/20101222/netneutrality22_st.a...
Net neutrality: Will the FCC's new Internet policy help consumers? (Christian Science Monitor)
http://www.csmonitor.com/USA/2010/1221/Net-neutrality-Will-the-FCC-s-new...
FCC: Yup, we're going to stop "paid prioritization" on the 'Net (ars technica)
http://arstechnica.com/tech-policy/news/2010/12/fcc-priority-access-deal...

Reaction to FCC's Network Neutrality Action (updated)

Here's a collection of statements in response to the Federal Communications Commission's adoption of open Internet/network neutrality rules on Dec 21.

FCC Chairman Julius Genachowski voted for the Order: "As we stand here now, the freedom and openness of the Internet are unprotected. No rules on the books to protect basic Internet values. No process for monitoring Internet openness as technology and business models evolve. No recourse for innovators, consumers, or speakers harmed by improper practices. And no predictability for Internet service providers, so that they can effectively manage and invest in broadband networks. That will change once we vote to approve this strong and balanced order. The vote on this order comes after many months of debate -- which has often produced more heat than light. Almost everyone says that they agree that the openness of the Internet is essential -- that openness has unleashed an enormous wave of innovation, economic growth, job creation, small business generation, and vibrant free expression. But despite a shared allegiance to the Internet as an open platform, there has been intense disagreement about the role of government in preserving Internet freedom and openness."

"In years to come," said FCC Commissioner Michael Copps who concurred with the Order, "I hope we can look back on this day as an important turning point in the struggle to ensure the continued openness of the Internet against powerful gatekeeper control. On numerous fronts in the Open Internet Order before us today, the Commission is taking strides forward. On others, I pray that our timidity will not undermine the spirit of the Order that we are adopting."

Voting against the Order, FCC Commissioner Robert McDowell said, "We agree that the Internet is, and should remain, open and freedom enhancing. It is, and always has been so, under existing law. Beyond that, we disagree. The contrasts between our perspectives could not be sharper.... Today, the Commission is choosing to ignore the recent past as it attempts the same act. In so doing, the FCC is not only defying a court, but it is circumventing the will of a large, bipartisan majority of Congress as well. More than 300 Members have warned the agency against exceeding its legal authority. The FCC is not Congress. We cannot make laws. Legislating is the sole domain of the directly elected representatives of the American people. Yet the majority is determined to ignore the growing chorus of voices emanating from Capitol Hill in what appears to some as an obsessive quest to regulate at all costs. Some are saying that, instead of acting as a "cop on the beat," the FCC looks more like a regulatory vigilante."

FCC Commissioner Mignon Clyburn approved the Order and said, "Left to my own devices, there are several issues I would have tackled differently. As such, I am approving in part and concurring in part to today's Order. While I appreciate the Chairman's recognition of some of my concerns, and the adjustments made in the Order to allay those concerns, there are several areas in the Order I would have strengthened so that more consumers would benefit from the protections we are adopting. First, I would have extended all of the fixed rules to mobile, so that those consumers who heavily or exclusively rely upon mobile broadband would be fully protected.... Second, I would have prohibited pay for priority arrangements altogether.... Third, an open Internet should be available to all end users-residential, enterprise, for-profit, or not.... Finally, earlier this year I stated my preference for the Commission's legal authority over broadband Internet access service. While the route taken here is not the one I originally preferred, I believe that it is appropriate for the Commission to act to protect an open Internet. I know there will be many lawyers studying the legal authority cited in this Order in the weeks, months and perhaps years ahead, and judicial review ultimately will determine the fate of this Order. I sincerely hope that the Commission's authority to protect consumers' access to an open Internet is upheld."

"Preserving the open Internet is non-negotiable," saif FCC Commissioner Meredith Baker who voted against the Order, "it is a bedrock principle shared by all in the Internet economy, a building block on which we can all agree. And, the Internet is open today. The evidentiary record in our proceeding has reaffirmed that government action is not necessary to preserve it. Yet the majority acts, and acts decisively, to adopt Net Neutrality rules, imposing the heavy hand of government into how broadband networks will be managed and operated. The data most certainly does not drive us to this result. In the final analysis, the Commission intervenes to regulate the Internet because it wants to, not because it needs to. I cannot support this decision. It is not a consumer-driven or engineering-focused decision. It is not motivated by a tangible competitive harm or market failure. The majority bypasses a market power analysis altogether, and acts on speculative harms alone. The majority is unable to identify a single ongoing practice of a single broadband provider that it finds problematic upon which to base this action. In the end, the Internet will be no more open tomorrow than it is today."

President Barack Obama: "Today’s decision will help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and defending free speech. Throughout this process, parties on all sides of this issue – from consumer groups to technology companies to broadband providers – came together to make their voices heard. This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation. As a candidate for President, I pledged to preserve the freedom and openness that have allowed the Internet to become a transformative and powerful platform for speech and expression. That’s a pledge I’ll continue to keep as President. As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact. I congratulate the FCC, its Chairman, Julius Genachowski, and Congressman Henry Waxman for their work achieving this important goal today."

"The Commission's framework constitutes a floor, not a ceiling, on basic protections. If the rule’s protections prove insufficient and consumers and innovation suffer, they will need to be strengthened, and I will vigorously support that effort," said House Commerce Committee Chairman Henry Waxman (D-CA).

House Republicans are promising a swift reaction to the Federal Communication Commission's net-neutrality rules that could get off the ground as soon as January. Incoming House Commerce Chairman Fred Upton (Mich.) said in a press conference on Tuesday that his committee is planning multiple hearings to beat back the regulations. Rep Upton said Congress must "use every resource available" to halt the regulations. "The FCC's hostile actions toward innovation, investment and job creation cannot be allowed to stand," he said. Rep. Greg Walden (R-OR) will take the lead on beating back the regulations as chairman of the Communications subcommittee, while the Trade and Oversight subcommittees will also play a role. Hearings are likely to focus on the impact of the rules, their legal underpinnings, and the process used to pass them, which opponents have described as opaque. They said they will explore every legislative vehicle to halt the regulations, including the Congressional Review Act, which allows Congress to repeal regulations. A budget amendment is another option.

Rep Bobby Rush (D-IL), a key Democrat on the House Communications Subcommittee, said he would fight any efforts by Republicans to overturn the open Internet rules. While he has concerns that the FCC excluded wireless broadband from its prohibition on "unreasonable" discrimination, the net neutrality order is a step in the right direction. Rules requiring greater transparency of broadband providers network management practices and barring the blocking of access to lawful content, applications and services would apply to wireless broadband. While he said he is still considering whether to push to extend all the rules to wireless, "one thing I am going to fight against are any efforts by Republicans to repeal the FCC's order," Rep Rush said, adding that any effort by Republicans to derail this process is off-targeted, ill conceived and needs to be resisted."

Rep Maxine Waters (D-CA) said that she was "very concerned" that the FCC's just-adopted network neutrality regulations are "insufficient and harmful to many American consumers," including creating a mobile digital divide. Her chief problem is that not all the rules apply to wireless broadband, a technology that is disproportionately used by African Americans and Latinos. "Although the new rules bar fixed broadband Internet providers from "unreasonable discrimination" against Web traffic, they exempt mobile broadband providers -- leaving millions without critical consumer protections and leading to a fractured Internet."

Senate Minority Leader Mitch McConnell (R-KY): "The Obama administration, which has already nationalized healthcare, the auto industry, insurance companies, banks and student loans, will move forward with what could be a first step in controlling how Americans use the Internet by establishing federal regulations on its use."

Senate Commerce Committee Chairman Jay Rockefeller (D-WV): "I am pleased that under the leadership of Chairman Julius Genachowski the FCC voted to move ahead today and address network neutrality. By and large, I believe that this effort, along with ongoing oversight and enforcement, will protect consumers and provide companies with the certainty they need to make investments in our growing digital economy. While many champions of the open Internet would have preferred a stricter decision — and I myself have real reservations about treating wireless broadband differently from wired broadband — I think today's decision is a meaningful step forward. This effort is undoubtedly better due to the hard work of Commissioner Copps, who has a long-standing commitment to network neutrality and deep and abiding interest in how communications technology can enhance our democratic discourse. I also wholeheartedly thank Commissioner Clyburn for her efforts to bring us to this decision today." Sen Kay Bailey Hutchison (R-TX), Ranking Member on the Senate Commerce Committee, said new regulations adopted by the Federal Communications Commission threaten the future economic growth of the Internet. Sen. Hutchison also said she will introduce a resolution of disapproval in an effort to halt the new rules.

Sen Al Franken (D-MN) said, "The good news is that, thanks to Commissioners Copps and Clyburn -- not to mention a nationwide network of net neutrality activists -- the proposal approved today is better than the original circulated by FCC Chairman Julius Genachowski.... The bad news is that, while it's no longer worse than nothing, the rule approved today is not nearly strong enough to protect consumers or preserve the free and open Internet. And with so much at stake, I cannot support it."

Public Knowledge called on its supporters to tweet that future openness battles had not been headed off because the FCC "punted" on the hard questions. "This was supposed to be an FCC that fought for you, instead it has forced you to fight for yourself. They created rules filled with loopholes and undefined terms," the group said.

Free Press called the vote a "squandered opportunity," saying the order contained loopholes that indicated it was done to appease bit networks rather than "millions of Americans who asked for real Net Neutrality."

But not all the network neutrality fan reaction was so negative.

"Dish Network applauds chairman Genachowski and commissioners Copps and Clyburn for adopting critically important net neutrality rules. The commission's order is a solid framework for protecting the open Internet," said Dish chairman and CEO Charlie Ergen in a statement.

Markham Ericson of the Open Internet Coalition, which had participated in some stakeholder talks about a compromise proposal, said that "today's vote, coupled with strong future enforcement, would provide a degree of certainty to all participants in the broadband marketplace and help foster an open wireline Internet online ecosystem." Ericson, however, also said the regulations should apply equally to wireless and wired broadband. The order only applies some of them to wireless, citing the nascent mobile broadband market and differences in network architecture.

Benton Foundation's Policy Counsel, Amina Fazlullah: "Today the Federal Communications Commission took a step towards protecting the free and open Internet. However, enforcement will be the true test of these rules' effectiveness: the FCC must continue to closely watch broadband industry practices and be prepared to swiftly and strictly enforce these important rules. We believe that there should be one set of Open Internet rules for both wireline and wireless Internet consumers. Today’s Internet consumers are already seamlessly moving between wired and wireless devices and the rules that protect consumers and the Internet should do the same. The Benton Foundation welcomes the FCC's action and urges it to quickly act to codify stronger protections for consumers in the mobile space."

The reaction from industry was mixed, too.

Tom Tauke, Verizon's chief lobbyist, said, "Although we share with the FCC the overarching goals of an open Internet, we are deeply concerned by today’s 3-2 decision. The FCC’s majority breaks with years of bipartisan communications policies that recognized that Internet innovation and investment – and the jobs they create – thrive without government intervention. There is no doubt that the policies put in place by the Clinton Administration and the Bush Administration to jumpstart innovation and the spread of broadband worked. As a result, America’s broadband and Internet marketplace is intensely competitive and an engine of economic growth, job creation and multi-billion dollar investment. Today’s decision, however, unnecessarily departs from these successful policies."

National Cable & Telecommunications Association President Kyle McSlarrow said that he agreed with the Republican commissioners--who voted against the rules--that they were unnecessary, but said since it had been clear there were three votes for rules that would have gone much farther, the association's goal had been rules that would avoid unintended consequences and that preserved investment and innovation. Comcast said the FCC's new network neutrality regulations appear to strike a "workable balance."

Paul Gallant, an analyst at MF Global, said the odds are steep if congressional Republicans want to repeal the Federal Communications Commission's new network neutrality regulations, which the agency approved over strong objections from GOP commissioners.

Why the FCC's network neutrality proposal is the right one for right now

[Commentary] Federal Communications Commission Chairman Julius Genachowski's network neutrality proposal builds on the work begun by past Republican Chairmen Michael Powell and Kevin Martin and accomplishes four key goals:

  1. Increases transparency for broadband consumers: The Open Internet framework ensures that consumers have the right to know how broadband networks are managed and serviced. The new measure implements sunshine regulations to ensure cable companies are transparent so that subscribers have the information to innovate. When problems arise they can be caught early, reducing the overall number of complaints to the FCC.
  2. Protects the right to send and receive Internet traffic: The Internet will continue to be a platform for free speech and democratic engagement under the new guidelines. Broadband providers will not have the power to block and censor access to legal content, applications and services. The new rules also bar broadband providers from favoring their content over their web rivals by providing quicker upload speeds and better quality.
  3. Provides a level playing field online: The Internet is a meritocracy – everyone begins on a level-playing field and the market decides which ideas succeed and fail. No single entity, be it public or private, should have the power to decide who succeeds and who fails. The proposed rules let the marketplace determine the most successful ideas.
  4. Encourages increased investment in broadband deployment: The framework also recognizes that the Internet is a two way street. Broadband companies must have the opportunity to invest in their networks so they can continue to compete. These Internet providers need flexibility to manage their networks and to deal with harmful traffic from unwanted users and heavy congestion.

We all benefit when the Internet is more accessible, transparent, and free. By adopting this bipartisan framework, the FCC will finally settle the question of whether consumers or broadband providers should determine the future of e-commerce. America has many strengths, and I believe primary among these is our ability to innovate. This set of common sense principles will unleash America's entrepreneurial spirit to compete in an increasingly competitive world.

A Network Neutrality Timeline: How We Got Here

A brief recap of the events and decisions leading up to the Federal Communications Commission's network neutrality vote:

2004: In February, then-FCC chairman Michael Powell gives a speech in Colorado called “Preserving Internet Freedom: Guiding Principles for the Industry,” outlining the idea of four Internet Freedoms in response to calls for some type of network neutrality.

2005: In February, Madison River, a telephone company, blocks Vonage VoIP services, creating one of the first cases of an ISP discriminating against IP traffic. The FCC later put a stop to the discrimination, and in August the commission proposed a set of four Open Internet Principles, which can be found here. As a policy statement they were a start, but they lacked teeth because they weren’t regulations. They said that consumers were entitled to access the lawful Internet content of their choice; to run applications and use services of their choice; connect their choice of legal devices that do not harm the network and that they are entitled to competition among network providers, application and service providers, and content providers.

2006: Congress attempts to pass the first of many network neutrality bills. In general, ISPs and hardware makers are against any legislation, while large Internet content providers and engineers are in favor, with eBay’s then-CEO Meg Whitman even sending out an email to eBay’s users asking them to contact their Congressmen in favor of network neutrality. The law didn’t pass.

2007: Another year, another net neutrality bill introduced in Congress. It failed. Meanwhile, users accused Comcast of blocking P2P files on its network — a problem in part because such files often include video that might be considered competitive with Comcast’s own pay TV service. The FCC investigates.

2008: Another net neutrality bill introduced in Congress. The FCC found Comcast was blocking P2P files on its network as part of its network management practice. The FCC under Chairman Kevin Martin censured Comcast for blocking such files and ordered it to implement and file a new and non discriminatory network management plan.

2009: Comcast sues the FCC in August, arguing that the FCC is not the boss of it. In September, FCC Chairma Julius Genachowski pulled the trigger on creating actual rules to cover network neutrality, with the surprise step of including wireless networks under the plan as well. The rules also added transparency as a principle to the original four.

2010: In April a court says that the FCC doesn’t have the authority to censure Comcast for violating the Open Internet Principles, creating a huge roadblock for Genachowski’s efforts to implement the net neutrality rules. Much floundering occurs throughout the summer with the FCC proposing a Third Way, Google and Verizon hopping in bed with their own suggested policy framework and Congress attempting a bill.

December 21, 2010 (Ho, Ho, Ho, Merry Net Neutrality)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, DECEMBER 21, 2010

See today's FCC meeting/network neutrality debate live at 10:30 (eastern) http://bit.ly/hoiCPq


NETWORK NEUTRALITY
   FCC's Copps, Clyburn will not block network neutrality order
   FCC’s New New Net Neutrality Compromise Is Better
   FCC chairman describes network neutrality rule as down the middle
   Hands off tomorrow's Internet
   The Network Neutrality Order: Possible Adequacy, But No Regulatory Certainty Any Time Soon
   Verizon Weighing Lawsuit Against FCC
   Public Interest Community Disappointed with FCC
   Yes, We’re Still Talking About Network Neutrality
   Internet Access Should Be Application-Agnostic
   Vote On Network Neutrality May Alter The Way We Listen Online
   The Most Important Free Speech Issue of Our Time
   All We Want For Christmas Is Internet Equality

MORE ON INTERNET/BROADBAND
   Is a UN Internet takeover looming? Not quite
   National Broadband Strategy Needs Another JFK
   E-Mail Gets an Instant Makeover

SPECTRUM/WIRELESS
   AT&T to Buy Qualcomm’s Spectrum for $1.93 Billion
   Will the FCC Approve Qualcomm’s Spectrum Sale To AT&T?

OWNERSHIP
   Put people first in Comcast-NBC merger
   Rep Waters: Diversity Conditions Should Be Enshrined in Comcast-NBCU Deal
   Consumers Union Submit Petitions Opposing NBC-Comcast Deal
   Comcast By The Numbers
   EarthLink to acquire One Communications
   Google's next Deal

TELEVISION
   2010 Local TV Revenues Expected to reach $18.5 Billion
   NCTA: FCC Terrestrial Exemption Decision is Arbitrary, Capricious
   The Misinformed: More Than Just Your Regular TV News Viewer?
   LPTVs Ask For Time, Flexibility To Make Digital Switch

CONTENT
   Copyright Royalty Board announces webcast royalty rates for 2011-2015
   Illegal file-sharers: friend of the struggling musician?
   Is Phone Company's Plan to Turn Music Pirates Into Paying Customers "Game Changing"?
   E-Mail Gets an Instant Makeover

JOURNALISM
   Afghan War Just a Slice of US Coverage
   The Misinformed: More Than Just Your Regular TV News Viewer?
   Economy Remains Atop the News Agenda

GOVERNMENT & COMMUNICATIONS
   Social media presence tests agency records management

BUDGET
   Congress seeks government funding through March 4

HEALTH
   Blumenthal to set aggressive pace for health data exchange

PRIVACY
   Google Argues Street View Cars Did Not Violate Privacy Laws
   Cellphone Marketers Plan Rules on Privacy
   Movement to enable Web surfers to avoid tracking

STORIES FROM ABROAD
   India Leader Offers to Testify in Scandal Inquiry
   Product Placement to Be Allowed in UK TV Programs
   Brussels clears News Corp bid for BSkyB

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NETWORK NEUTRALITY

COPPS WILL NOT BLOCK NET NEUTRALITY ORDER
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Federal Communications Commission members Michael Copps and Mignon Clyburn indicated Dec 20 that they will vote to approve Chairman Julius Genachowski's network neutrality order, a proposal they had fought hard to improve.
FCC Commissioner Copps on the proposed network neutrality order: "These past three weeks have been devoted on my part to intensive discussions about ensuring the continued openness of the Internet and putting consumers, not Big Phone and Big Cable, in maximum control of their online experiences. I have been fighting for nearly a decade to make sure the Internet doesn't travel down the same road of special interest consolidation and gate-keeper control that other media and telecommunications industries — radio, television, film and cable — have traveled. What an historic tragedy it would be to let that fate befall the dynamism of the Internet. The item we will vote on tomorrow is not the one I would have crafted. But I believe we have been able to make the current iteration better than what was originally circulated. If vigilantly and vigorously implemented by the Commission — and if upheld by the courts — it could represent an important milestone in the ongoing struggle to safeguard the awesome opportunity-creating power of the open Internet. While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward. I do thank the Chairman for his engagement, and I owe a special debt of gratitude to Commissioner Mignon Clyburn for her thoughtful and creative work to improve this item."
FCC Commissioner Clyburn on the proposed network neutrality order: "The open Internet is a crucial American marketplace, and I believe that it is appropriate for the FCC to safeguard it by adopting an Order that will establish clear rules to protect consumers' access. The Commission has worked tirelessly to offer a set of guidelines that, while not as strong as they could be, will nonetheless protect consumers as they explore, learn, and innovate online. As such, I plan to vote to approve in part and concur in part the Open Internet Order during the FCC's open meeting tomorrow. I appreciate the hard work of my colleagues, and I am especially grateful for the commitment and dedication of Commissioner Copps, who has worked many years on behalf of consumers to ensure an open Internet. I also want to thank the many stakeholders who have worked diligently on these issues and took the time to call, write, and visit me to convey their concerns. I am also grateful to Chairman Genachowski, his staff, and the many others at the Commission who worked around-the-clock on this proceeding. As a Commissioner whose task is to safeguard consumers and the public interest, I will continue to watch the growth of the Internet and will applaud industry advances and milestones. I will also seek out and facilitate any collaboration between myself, my colleagues, corporate stakeholders, and public interest representatives, as there can be no better path forward than that which is achieved through consensus."
benton.org/node/46888 | Hill, The | B&C | Bruce Gottlieb | FCC Commissioner Clyburn | B&C | National Journal | Washington Post | paidContent.org | AP
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COMPROMISE IS BETTER
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
The Federal Communications Commission will adopt a network neutrality order on Dec 21, but it will not publish the full text of those rules until a few days after its open meeting. The proposal has been tweaked since outlined by FCC Chairman Julius Genachowski three weeks ago. The rules will make the distinction that broadband is an access service as opposed to an information service. This is a subtle distinction, presumably designed to keep the FCC clear that it’s trying to regulate access to the web as opposed to the web itself. The FCC also will endeavor to apply that same standard — that broadband is the service that allows someone to go wherever they want on the web — to future forms of access. By regulating the access, the FCC hopes to address loopholes in the wireline net neutrality rules that will prevent Internet service providers from using their own managed services offered to subscribers to circumvent the idea of an open Internet. It’s also where the FCC will address issues of paid prioritization where an ISP might charge companies like Google for faster delivery of its content to the ISP’s end subscribers. Other protections in the order are a “robust transparency requirements for wireline and wireless networks,” and a rule preventing both wireless and wireline carriers from blocking websites. On the wireless side, the focus will be on preventing mobile operators from blocking services that compete with their own voice or video services, while the wireline rules seek to prevent the blocking of all lawful content. There will be a prohibition against “unreasonable discrimination” on wireline networks as well. And since rules are only as good as their enforcement, the FCC is proposing that complaints on network neutrality issues will go through a faster decision-making period it calls the “Rocket Docket.” Complaints that are allowed to go through this process and be decided in 105 to 130 days after being accepted. The FCC will also have the power to set fines and order parties to stop violations of these rules.
benton.org/node/46894 | GigaOm
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GENACHOWSKI DEFENDS OPEN INTERNET ORDER
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Federal Communications Commission Chairman Julius Genachowski released excerpts of prepared remarks in advance of the agency's vote on network neutrality rules set for Dec 21. In the remarks, Chairman Genachowski talks about how his proposal falls in the middle of a contentious debate over regulating Internet access: "We’re adopting a framework that will increase certainty for businesses, investors, and entrepreneurs. We’re taking an approach that will help foster a cycle of massive investment, innovation and consumer demand both at the edge and in the core of our broadband networks. Our action will strengthen the Internet job-creation engine. This framework will advance our goal of having America’s broadband networks be the freest and fastest in the world… And so today we are adopting, for the first time, broadly applicable rules requiring transparency for mobile broadband providers, and prohibiting them from blocking websites and certain competitive applications."
benton.org/node/46915 | Washington Post | The Hill | B&C
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HANDS OFF TOMORROW'S INTERNET
[SOURCE: Washington Post, AUTHOR: FCC Commissioner Meredith Baker]
[Commentary] Network neutrality rules to be adopted today by the Federal Communications Commission will give government, for the first time, a substantive role in how the Internet will be operated and managed, how broadband services will be priced and structured, and potentially how broadband networks will be financed. By replacing market forces and technological solutions with bureaucratic oversight, we may see an Internet future not quite as bright as we need, with less investment, less innovation and more congestion. Discouragingly, the FCC is intervening to regulate the Internet because it wants to, not because it needs to. Preserving the openness and freedom of the Internet is non-negotiable; it is a bedrock principle shared by all in the Internet economy. No government action is necessary to preserve it. Acting only on speculative concerns about network operators and contrary to a decade of industry practice, the FCC is moving forward aggressively without real evidence of systemic competitive harms to cure, markets to fix or consumers to help. One of my principal misgivings about the FCC's approach is that it fails to confront in a forthright manner the substantial risk that this action may distort the future of the Internet. The FCC is focused on how broadband networks are managed and operated today. I am worried about the Internet of tomorrow. Efforts to ensure that all Americans have access to broadband service would be put at risk. Efforts to get the third of American households that do not subscribe to online broadband service to do so will be challenged. Affordability concerns will be magnified by forcing more of the network investment cost onto consumers. And consumers and entrepreneurs will be affected if network upgrades and improvements are delayed or forgone, as will their ability to create or use the next great application or service. I keep returning to what should be a threshold question: Why does the FCC plan to intervene in a rushed manner, days before the year's end, in the one sector of the economy that is working so well to create consumer choice, jobs and entrepreneurial opportunity? Until we can answer that, I hope my colleagues will stand down and allow Congress to take the lead on these issues. The Internet will be open on Wednesday with or without our action; we have the time to do it right.
benton.org/node/46914 | Washington Post
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NET NEUTRALITY ORDER OFFERS NO CERTAINTY
[SOURCE: Public Knowledge, AUTHOR: Harold Feld]
[Commentary] So after a year of process, what has the Federal Communications Commission (FCC) accomplished on network neutrality? On every single important and controversial question on what an “open Internet” actually means, — such as whether companies can create “fast lanes” for “prioritized” content or what exactly wireless providers can and cannot do — the actual language of the rules is silent, ambiguous, or even at odds with the text of the implementing Order. The only way to find out what protections consumers actually have will be through a series of adjudications at the FCC. So yes, it’s a step forward – but hardly more than an incremental step beyond the Internet Policy Statement adopted by the previous Republican FCC. After such an enormous build up and tumultuous process, it is unsurprising that supporters of an open Internet are bitterly disappointed — particularly given the uncertainty over how the rules will be enforced. Certainly the transparency provisions and adoption of the “rocket docket” procedures to process complaint are positive things. But FCC Chairman Julius Genachowski’s claim that the Order will bring certainty deserves a healthy dose of skepticism. Instead of using this long and painful process to define what carries can and can't do and what rights consumers can expect, the FCC has created the opportunity to undergo a long and painful process of enforcement to define the rules.
benton.org/node/46912 | Public Knowledge
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EXPECT VERIZON LAWSUIT
[SOURCE: National Journal, AUTHOR: David Hatch]
Apparently, Verizon, the nation's second largest telecommunications carrier, may seek to overturn the historic open Internet rules to be approved by the Federal Communications Commission Dec 21. Sources said the option is on the table, but cautioned that no final decision has been made. The company will review the details of the new network neutrality rules set for adoption by the agency's three Democratic regulators to gauge its next move. Unlike the nation's largest telecom provider, AT&T, which met extensively with agency officials to discuss the regulatory proceeding and endorsed FCC Chairman Julius Genachowski's Dec. 1 announcement of new Internet restrictions, Verizon has largely stayed on the sidelines and issued no endorsement. FCC watchers expect legal challenges both from entities that think the proposal goes too far and those that complain it's too weak.
benton.org/node/46911 | National Journal
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REACTION TO FCC
[SOURCE: Benton Foundation, AUTHOR: ]
Network neutrality advocates reacted with great disappointment to the news that the Federal Communications Commission would approve an Open Internet order on December 21.
benton.org/node/46886 | Public Knowledge | Free Press | Consumers Union | Media Access Project
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ACCESS SHOULD BE APPLICATION AGNOSTIC
[SOURCE: The Huffington Post, AUTHOR: Brad Burnham]
[Commentary] The Federal Communications Commission can balance the interests of web services innovators and consumers with those of telephone and cable companies without changing the substance of the proposed network neutrality rule simply by defining application-specific discrimination as unreasonable. Barbara van Schewick, a professor at the Stanford Law School, says the correct approach is, "A non-discrimination rule that would ban all application-specific discrimination (i.e. discrimination based on applications or classes of applications), but would allow application-agnostic discrimination." The brilliance of this approach is that it offers cable and telephone companies great flexibility to package and price their services and to manage their networks without harming investment and innovation in web services. If a user wants more packets or less latency, an access provider should be able to sell that to them. But for that access service to meet the test of being application-agnostic, the choice of when to use these services and for which applications must be left to the user. Similarly, if a user consumes a disproportionate share of packets at certain times of day, a network provider should be able to temporarily reduce that user's throughput to avoid degrading the experience of others. These actions would not threaten a free and open Internet because they are targeted at a consumer's use of network capacity, not a specific application. On the other hand, if access providers throttled only the bandwidth available to BitTorrent to deal with congestion, that would clearly be application-specific discrimination. Blocking or throttling video would be discrimination against a class of applications. This approach works equally well for wireless. If an older wireless network does not have the capacity to handle lots of packets at peak times, it can reasonably limit the number of packets available to users. When congestion is eased it can open up the pipe again. This is reasonable network management that does not distort the competitive market for web services. Blocking or discriminating against a specific web service like Skype or against a whole class of web services like streaming video would be prohibited under this framework. If it is not possible to solve all network management problems on older wireless networks in an application-agnostic way, there could be an exception; but the presumption should be that network management would be as application-agnostic as possible. [Burnham is a technology entrepreneur]
benton.org/node/46882 | Huffington Post, The
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NETWORK NEUTRALITY AND MUSIC
[SOURCE: National Public Radio, AUTHOR: Laura Sydell]
A look at how the Federal Communications Commission's network neutrality rules could impact online music. Casey Rae Hunter of the Future of Music Coalition, a Washington, D.C.-based nonprofit, says there has been an explosion of independent musicians who can now reach their fans without a label or radio. "In the old days, they would still have to navigate this pretty complex system of bottlenecks and gatekeepers to reach the fan," Hunter says. "The Internet means that you can develop and cultivate these sort of one-on-one relationships." But Hunter says this freewheeling environment is threatened, and that many Internet service providers, or ISPs — such as Comcast, Verizon and AT&T — would like to have more control over the Internet service they provide to homes. George Ou, of the free-market-leaning think tank Digital Society, on the other hand, says the wealthier companies like Netflix, Google's YouTube and Apple's iTunes already pay more to get faster service from the ISPs. "The Internet right now has multiple tiers," Ou says. "It's based on fee-based performance where, if you pay more, you get more." Ou says that if the FCC steps in with network neutrality rules, as some public interest groups want, it would harm today's Internet. "They're saying that we want to preserve the Internet, but in fact, what they're going to do is change the Internet such that services like YouTube and Netflix won't work."
benton.org/node/46881 | National Public Radio
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MORE ON INTERNET/BROADBAND

UN NOT TAKING OVER INTERNET
[SOURCE: ars technica, AUTHOR: Nate Anderson]
Perhaps you saw or heard the headlines last Friday or over the weekend: the United Nations could take over the Internet! (Or, as the Drudge Report put it, "UN PLANS INTERNET REGULATION.") This, you may not be surprised to learn, isn't quite accurate. A UN working group is currently talking about what, if anything, it could do to improve the operation of its Internet Governance Forum (IGF), a group devoted to dialogue but possessing no decision-making powers. In May 2010, the UN's Commission on Science and Technology (CSTD) decided that the IGF could be improved after its initial five-year run. It called for a new working group that would "seek, compile and review inputs from all Member States and all other stakeholders on improvements to the Internet Governance Forum (IGF)." No problem there, really, but when CSTD actually assembled the working group in early December, only governments were on the list. The fear here is clear (try saying that three times fast): an IGF overhaul committee made up only of governments might get some very government-friendly ideas, such as that IGF should get more power and should serve as a forum for deciding on issues like Internet crime and security, without the involvement of ISPs, Internet companies, and nonprofit civil society groups.
benton.org/node/46829 | Ars Technica
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NBP NEEDS A JFK
[SOURCE: Fighting the Next Good Fight, AUTHOR: Craig Settles]
[Commentary] Where are broadband’s 31 words to move a nation? Where's the brief mission statement that paint a clear endpoint and produce a common understanding that in turn unite folks in Congress, private industry, urban and rural counties, academia, etc.? Broadband needs a President John Kennedy to convey a grand but concrete, comprehendible vision that can be summed up succinctly. The Broadband Plan contains many of the necessary ingredients, but a leader has to distill those ingredients, and then champion a mission that appears to exceed our grasp. Mainstream America sees a lot of goals and recommendations in the Plan, but they don't see a moon landing. They see stops along the way, a few conflicting paths, several possible landing pads.
benton.org/node/46843 | Fighting the Next Good Fight
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SPECTRUM/WIRELESS

AT&T BUYING SPECTRUM
[SOURCE: Bloomberg, AUTHOR: Greg Bensinger, Brett Pulley]
AT&T, the second-largest U.S. mobile-phone carrier, agreed to buy wireless spectrum from Qualcomm for $1.93 billion as customers increasingly use bandwidth-hogging services such as video downloads. The spectrum, in the lower 700 megahertz frequency band, covers 300 million people in the US. AT&T gets about 12 MHz spectrum of Lower 700 MHz D and E block spectrum in ­ New York, San Francisco, Boston, Los Angeles and Philadelphia and 6 MHz of Lower 700 MHz D block spectrum in rest of the country. Chipmaker Qualcomm had acquired the spectrum for its mobile-TV service, which it plans to shut down in March. AT&T is upgrading its third-generation network to allow for higher speeds while it works on building out its fourth- generation network to debut next year. Larger rival Verizon Wireless turned on 4G service earlier this month.
benton.org/node/46835 | Bloomberg | Multichannel News
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WILL FCC APPROVE SPECTRUM DEAL?
[SOURCE: GigaOm, AUTHOR: Om Malik]
[Commentary] If recent history is any indicator, Federal Communications Commission approval for the AT&T-Qualcomm spectrum deal may not come easy. The FCC has become especially queasy about AT&T and Verizon’s spectrum assets, noting in its Wireless Competition report that spectrum assets were becoming more concentrated. AT&T can slow down the deployment of that spectrum at a time when the market needs it the most. In addition, FCC was pretty clear about not allowing Harbinger, a hedge fund behind LightSquared network to sell some of its spectrum assets. That is a clear indication on the part of the FCC to take a hard look at spectrum sales to large carriers, especially those that include repurposing of spectrum.
benton.org/node/46834 | GigaOm
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OWNERSHIP

COMCAST-NBC MERGER
[SOURCE: Bangor Daily News, AUTHOR: Cynthia Dill]
[Commentary] There is a lot of debate about the “message” sent by voters to Washington in the last election. While everyone has their personal opinions, one message that stood out was “put people first.” Americans of all party affiliations are sick of special interests driving our national agenda. Fortunately, our government has a unique chance to demonstrate that it gets the message. Comcast, the nation’s largest cable company, is trying to buy NBC-Universal to create the most powerful media company in American history. Before this dangerous deal can be completed, federal regulators have a chance to stand up for the people. They should take the opportunity to do so. The 2010 election cycle showed how corporations are able to exploit that loophole to pour hundreds of millions of dollars into election advertising. Comcast’s lobbying and contribution spree is part and parcel of this same phenomenon of corporations seeking to bend government to their will. And it is that corporate and special interest power that the American people are rebelling against. The Comcast-NBCU merger is a raw deal, and consumers know it. It puts too much power in the hands of one company. It is bad for our wallets, our TV dial, our Internet and our country. The people are asking policymakers to put the public interest first. Saying no to the Comcast merger, as proposed, would send a powerful message that Washington finally is hearing us. And in doing so, help protect the kind of competitive, diverse media that our democracy requires. [Dill (D-Cape Elizabeth) represents District 121 in the Maine House of Representatives and is the Digital Democracy project director for Common Cause.]
benton.org/node/46854 | Bangor Daily News
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WATERS ON COMCAST-NBC
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Rep Maxine Waters (D-CA) has suggested something of a distrust-but-verify approach to enforcing the memoranda of understanding (MOUs) Comcast has signed with Asian American, Hispanic and more recently African American groups in an effort to win approval of its deal with NBCU. In a letter to Federal Communications Commission Chairman Julius Genachowski, Rep Waters, who has long registered her concerns with the deal's impact on diversity, said many of the proposed conditions "appear to be a series of vague goals and nominal gestures -- lacking specificity and binding authority on the applicants." While Rep Waters said the civic organizations that struck the deals -- they included the NAACP and the Urban League -- likely were negotiating in good faith (she did not include Comcast in that list), "absent further action by the Commission, I am afraid that these commitments will result in yet another set of broken promises between communities of color and large corporations." For one thing, Rep Waters wants Comcast to file the MOUs as amendments to their agreement.
benton.org/node/46853 | Broadcasting&Cable
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GOOGLE'S NEXT DEAL
[SOURCE: New York Times, AUTHOR: Editorial staff]
[Commentary] Antitrust regulators face a tough decision on whether to allow Google to buy ITA Software, a company that organizes online flight information. Once it gets into that business, Google may well figure out brilliant new ways to help travelers organize and book vacations online. But Google’s dominance of online search — which allows it to steer users to certain Web sites and away from others — raises a real concern about the potential consequences of the deal. Google cannot abuse its dominance in search to shut out the competition. What would happen to the $80 billion-a-year online travel business if Google’s rivals were relegated to the nether reaches of its search results and it came to dominate the search for online tickets, too? Regulators must consider that if Google extends its dominance to the business of steering online customers to airlines and travel agencies, it would be in a position to charge more for this service. Without strong competitors to keep it in check, it might offer preferential placement to some airlines or agencies for a fee, or not list offers from companies that didn't pay up. This could lead to higher costs for agencies, airlines and passengers.
benton.org/node/46910 | New York Times
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TELEVISION

LOCAL AD REVENUE
[SOURCE: TVNewsCheck, AUTHOR: ]
Politics and automobiles gave the over-the-air local television industry a much needed revenue injection in 2010, leading BIA/Kelsey, adviser to companies in the local media space, to raise its estimate for the year to $18.5 billion, a 17 percent increase from 2009. In the fourth edition of the quarterly Investing In Television Market Report, BIA/Kelsey also forecasts an 8% decrease in local television revenues in 2011, a more pronounced decline due to this year's unusually robust political campaign season.
benton.org/node/46849 | TVNewsCheck
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LOW POWER TV AND THE SWITCH TO DIGITAL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Fifteen low power television stations told the Federal Communications Commission that they need more time to make the transition to digital, and want the flexibility to experiment with delivering a combined broadcast and broadband service. The FCC has proposed requiring low-power TV stations to make the digital transition by 2012. That is so it can begin auctioning off broadcast spectrum for wireless broadband per the national broadband plan. LPTV stations were not required to make the DTV transition back in 2009 along with full-power stations, in part because of the economic burden it would put on the stations. The stations said that the 2012 shut-off date would require them to "expend strained resources" -- as much as $200,000 if they have to move to a new channel -- to make the DTV switch or lose their spectrum, and at a time when it was not yet clear whether they would be getting any money out of proposed incentive spectrum auctions. They want the FCC to wait until it has reclaimed and reallocated spectrum to mandate the conversion to ensure there will be spectrum left over for them. The stations also say they should have the flexibility to use their spectrum to deliver both broadcast and broadband service.
benton.org/node/46832 | Broadcasting&Cable
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CONTENT

COPYRIGHT ROYALTY BOARD ANNOUNCEMENT
[SOURCE: CommLawBlog, AUTHOR: Kevin Goldberg]
The Copyright Royalty Board (CRB) has announced the rates and terms that will apply to your operations for the period January 1, 2011-December 31, 2015. In getting this decision out as quickly as it did, the CRB has managed to do two things this time around that it failed to do in the ratemaking proceeding for 2006-2010. First, it managed to crank out a final result in a timely fashion. (By way of contrast, the decision setting the rates for 2006-2010 (“Webcasting II”) wasn't published in the Federal Register until May, 2007, at which point it had to be applied retroactively to the preceding 16 months or so.) And second, the CRB appears to have achieved relative consensus. (Again by way of contrast, Webcasting II resulted in both a two-year court challenge and an attempted legislative response).
benton.org/node/46826 | CommLawBlog
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ARE FILE SHARERS MUSICIANS' FRIEND?
[SOURCE: ars technica, AUTHOR: Matthew Lasar]
Here's the bad news, musicians. Illegitimate file downloading has definitely hurt the legal sale of your content, a recent academic paper confirms. This is particularly true for very popular music groups. But there's also good news -- at least for smaller bands. The widespread dissemination of MP3 files over the Internet has encouraged a "broader awareness" of lower-profile musicians, something that may have paid off for them through more concert ticket sales. "File-sharing may increase awareness of smaller, more obscure artists and their music by making the music available from more sources and at a much lower cost (or for free in the case of illegal file-sharing)," three scholars conclude. This has probably translated into more interest and boosted demand for their live concert appearances.
benton.org/node/46831 | Ars Technica
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CRICKET'S MUSIC SERVICE
[SOURCE: Fast Company, AUTHOR: EB Boyd]
The customers of wireless provider Cricket Communications tend to skew toward the lower end of the income scale. Many have neither computers nor credit cards. Which means they've been left out of the iTunes revolution. As a result, some have taken to obtaining their music via file-sharing sites, often illegally, cobbling together an acquisition system that involves downloading tracks onto computers belonging to friends, libraries, or schools, then transferring the music to their phones. It’s not an ideal experience for the users. And it’s the opposite of ideal for the music industry. Which is why Cricket figured that if they could integrate a music service with their prepaid cellphone plans, they might be able to bring some of those pirates into the music-paying fold. And, of course, expand their own customer base in the process. Cricket is unveiling the fruits of those efforts at the Consumer Electronics Show in January. The new “Muve Music” service will be bundled into Cricket’s high-end wireless plan. For a flat $55 monthly fee, subscribers won't only get unlimited voice, text, and messaging, they'll also get unlimited access to the catalogs of Universal, Sony, Warner, and EMI.
benton.org/node/46830 | Fast Company
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JOURNALISM

COVERAGE OF THE WAR
[SOURCE: New York Times, AUTHOR: Brian Stelter]
The grueling war in Afghanistan, where a day rarely goes by without an allied casualty, is like a faint heartbeat, accounting for just 4 percent of the nation’s news coverage in major outlets through early December, according to a study by the Project for Excellence in Journalism, an arm of the Pew Research Center. That is down slightly from last year, when the war accounted for 5 percent. The low levels of coverage reflect the limitations on news-gathering budgets and, some say, low levels of interest in the war among the public. About a quarter of Americans follow news about Afghanistan closely, according to recent surveys by the Pew Research Center for the People and the Press.
benton.org/node/46862 | New York Times
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BUDGET

TEMPORARY SPENDING BILL
[SOURCE: Reuters, AUTHOR: Richard Cowan]
The Senate will try to pass a bill this week keeping the government operating through March 4, when the next Congress would have to work out spending priorities for the rest of the fiscal year, Senate Majority Leader Harry Reid said. A Senate vote to pass the temporary funding bill is likely on Dec 21, Sen Reid said, when existing funds to operate the government expire. The House of Representatives would then have to sign off on the measure and send it to President Barack Obama for his expected approval. Under the bill, most federal government programs would be funded at last year's levels through March 4. The new Congress will be seated on January 5, with Republicans taking over control of the House. If this latest spending bill is enacted, Republicans will have a much greater say in spending priorities as they write legislation to fund the government from March 4 until October 1.
benton.org/node/46877 | Reuters
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PRIVACY

GOOGLE'S COURT ARGUMENTS
[SOURCE: MediaPost, AUTHOR: Wendy Davis]
Arguing that it broke no laws, Google is asking a judge to dismiss a potential class-action lawsuit stemming from the company's collection of data sent over WiFi networks. "It is not unlawful under the Wiretap Act to receive information from networks that are configured so that communications sent over them are "readily accessible to the general public," Google says in papers filed late last week with the U.S. District Court James Ware in San Jose (CA). The lawsuit stems from Google's admission earlier this year that its Street View cars collected payload data -- including URLs, passwords and emails -- sent over unencrypted WiFi networks. Google apologized for the interception and said it intended to destroy the data. Nonetheless, the company's acknowledgment triggered investigations abroad and in the U.S. about whether Google violated privacy laws, including the federal wiretap law.
benton.org/node/46827 | MediaPost
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CELLPHONE PRIVACY
[SOURCE: Wall Street Journal, AUTHOR: Scott Thurm]
Facing growing public concern about privacy breaches, a lobby representing mobile-phone advertisers and publishers called for guidelines to better protect smartphone users from intrusive tracking technologies. The Mobile Marketing Association said Dec 20 it would begin work on a "comprehensive set of mobile privacy guidelines" to help marketers and phone users navigate the rapidly changing landscape. "We need to create consistency so marketers know how to act and consumers know what to expect," said Greg Stuart, global chief executive of the MMA, which represents publishers, advertisers, developers of smartphone "apps" and telecom companies.
benton.org/node/46908 | Wall Street Journal
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AVOIDING WEB TRACKING
[SOURCE: San Francisco Chronicle, AUTHOR: James Temple]
As debate rages over the Federal Trade Commission's proposed privacy system for online consumers, a number of organizations are developing technological means of enabling surfers to exercise greater control over the information collected about their Internet behavior. The regulatory plan and new tools come at a point of growing distress over the amount of data that marketing and tracking companies often surreptitiously collect about online activity, and the increasingly sophisticated technology they have for doing so. "Today, there's basically no practical choice that the average Internet user can make that would give them privacy online," said Peter Eckersley, a senior staff technologist for the Electronic Frontier Foundation, a privacy advocacy group in San Francisco. The efforts to change that fall into two main approaches, each with its own strengths and weakness from a user privacy perspective - and very different consequences for the online businesses that depend on advertising revenue.
benton.org/node/46907 | San Francisco Chronicle
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---

Sincerely,
Headlines

FCC chairman describes network neutrality rule as down the middle

Federal Communications Commission Chairman Julius Genachowski released excerpts of prepared remarks in advance of the agency's vote on network neutrality rules set for Dec 21. In the remarks, Chairman Genachowski talks about how his proposal falls in the middle of a contentious debate over regulating Internet access:

"We’re adopting a framework that will increase certainty for businesses, investors, and entrepreneurs. We’re taking an approach that will help foster a cycle of massive investment, innovation and consumer demand both at the edge and in the core of our broadband networks. Our action will strengthen the Internet job-creation engine. This framework will advance our goal of having America’s broadband networks be the freest and fastest in the world… And so today we are adopting, for the first time, broadly applicable rules requiring transparency for mobile broadband providers, and prohibiting them from blocking websites and certain competitive applications."

Hands off tomorrow's Internet

[Commentary] Network neutrality rules to be adopted today by the Federal Communications Commission will give government, for the first time, a substantive role in how the Internet will be operated and managed, how broadband services will be priced and structured, and potentially how broadband networks will be financed.

By replacing market forces and technological solutions with bureaucratic oversight, we may see an Internet future not quite as bright as we need, with less investment, less innovation and more congestion. Discouragingly, the FCC is intervening to regulate the Internet because it wants to, not because it needs to. Preserving the openness and freedom of the Internet is non-negotiable; it is a bedrock principle shared by all in the Internet economy. No government action is necessary to preserve it.

Acting only on speculative concerns about network operators and contrary to a decade of industry practice, the FCC is moving forward aggressively without real evidence of systemic competitive harms to cure, markets to fix or consumers to help. One of my principal misgivings about the FCC's approach is that it fails to confront in a forthright manner the substantial risk that this action may distort the future of the Internet. The FCC is focused on how broadband networks are managed and operated today. I am worried about the Internet of tomorrow. Efforts to ensure that all Americans have access to broadband service would be put at risk. Efforts to get the third of American households that do not subscribe to online broadband service to do so will be challenged. Affordability concerns will be magnified by forcing more of the network investment cost onto consumers. And consumers and entrepreneurs will be affected if network upgrades and improvements are delayed or forgone, as will their ability to create or use the next great application or service.

I keep returning to what should be a threshold question: Why does the FCC plan to intervene in a rushed manner, days before the year's end, in the one sector of the economy that is working so well to create consumer choice, jobs and entrepreneurial opportunity? Until we can answer that, I hope my colleagues will stand down and allow Congress to take the lead on these issues. The Internet will be open on Wednesday with or without our action; we have the time to do it right.

The Network Neutrality Order: Possible Adequacy, But No Regulatory Certainty Any Time Soon

[Commentary] So after a year of process, what has the Federal Communications Commission (FCC) accomplished on network neutrality?

On every single important and controversial question on what an “open Internet” actually means, — such as whether companies can create “fast lanes” for “prioritized” content or what exactly wireless providers can and cannot do — the actual language of the rules is silent, ambiguous, or even at odds with the text of the implementing Order. The only way to find out what protections consumers actually have will be through a series of adjudications at the FCC. So yes, it’s a step forward – but hardly more than an incremental step beyond the Internet Policy Statement adopted by the previous Republican FCC.

After such an enormous build up and tumultuous process, it is unsurprising that supporters of an open Internet are bitterly disappointed — particularly given the uncertainty over how the rules will be enforced. Certainly the transparency provisions and adoption of the “rocket docket” procedures to process complaint are positive things. But FCC Chairman Julius Genachowski’s claim that the Order will bring certainty deserves a healthy dose of skepticism. Instead of using this long and painful process to define what carries can and can't do and what rights consumers can expect, the FCC has created the opportunity to undergo a long and painful process of enforcement to define the rules.

Verizon Weighing Lawsuit Against FCC

Apparently, Verizon, the nation's second largest telecommunications carrier, may seek to overturn the historic open Internet rules to be approved by the Federal Communications Commission Dec 21.

Sources said the option is on the table, but cautioned that no final decision has been made. The company will review the details of the new network neutrality rules set for adoption by the agency's three Democratic regulators to gauge its next move. Unlike the nation's largest telecom provider, AT&T, which met extensively with agency officials to discuss the regulatory proceeding and endorsed FCC Chairman Julius Genachowski's Dec. 1 announcement of new Internet restrictions, Verizon has largely stayed on the sidelines and issued no endorsement. FCC watchers expect legal challenges both from entities that think the proposal goes too far and those that complain it's too weak.

Google's next Deal

[Commentary] Antitrust regulators face a tough decision on whether to allow Google to buy ITA Software, a company that organizes online flight information.

Once it gets into that business, Google may well figure out brilliant new ways to help travelers organize and book vacations online. But Google’s dominance of online search — which allows it to steer users to certain Web sites and away from others — raises a real concern about the potential consequences of the deal. Google cannot abuse its dominance in search to shut out the competition. What would happen to the $80 billion-a-year online travel business if Google’s rivals were relegated to the nether reaches of its search results and it came to dominate the search for online tickets, too?

Regulators must consider that if Google extends its dominance to the business of steering online customers to airlines and travel agencies, it would be in a position to charge more for this service. Without strong competitors to keep it in check, it might offer preferential placement to some airlines or agencies for a fee, or not list offers from companies that didn't pay up. This could lead to higher costs for agencies, airlines and passengers.

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