March 2011

[Commentary] The rapidly increasing demand for smartphones and mobile bandwidth has prompted some analysts and regulators to warn of a looming wireless traffic jam — an irritant that some iPhone users in major cities have already experienced. Now, AT&T is proposing what it says is the fastest way to boost the capacity of its wireless network: buying T-Mobile.

The $39-billion purchase would eliminate one of the four largest U.S. mobile phone networks and leave just two companies — AT&T and Verizon Wireless — in control of more than 70% of the market. That's reason enough for regulators to take a skeptical view of the deal. Yet AT&T's technical arguments raise the possibility that the acquisition could do more for the burgeoning ranks of smartphone users than the companies are likely to do separately. There's little question that the deal would be good for AT&T. Combining the two companies would cut costs and increase revenue so much, analyst Craig Moffett of Bernstein Research recently wrote, that AT&T would effectively be acquiring T-Mobile's earnings for free. That's true in part because AT&T charges more for service than T-Mobile and would be expected to try to move T-Mobile customers into more expensive plans. Given the high stakes and complexity of the deal, regulators will probably spend more than a year poring over data and developing models for how the mobile phone market would behave if the takeover were approved. In the meantime, AT&T and Verizon will be rolling out higher-bandwidth 4G networks and phones in more markets, which could ease the capacity crunch — or exacerbate it, just as adding lanes on a highway inevitably draws more traffic. Regulators should watch what happens closely for signs that the ballyhooed spectrum crunch is or isn't near at hand. And lawmakers should get to work on the long-term challenge of freeing up more spectrum.

[Commentary] The question of how to enable America’s wireless future is an issue that should be settled on the facts. The facts, on which the Federal Communications Commission is basing its position, clearly suggest the broadcasters are hoarding spectrum. They are throwing “Hail Mary” passes, trying to do and say whatever they can to keep unused or underused spectrum to themselves. If we are forced to wait because some groups don't want to be paid for their unused spectrum, then we'll deprive American consumers of the fast-paced and cutting-edge innovation they have come to expect and love from our industry. That situation is unacceptable for the wireless industry, as it should be for anyone who cares about American competitiveness. That is why we’re so emphatic about this issue.

Google Inc. has agreed to settle Federal Trade Commission charges that it used deceptive tactics and violated its own privacy promises to consumers when it launched its social network, Google Buzz, in 2010. The agency alleges the practices violate the FTC Act. The proposed settlement bars the company from future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years. This is the first time an FTC settlement order has required a company to implement a comprehensive privacy program to protect the privacy of consumers’ information. In addition, this is the first time the FTC has alleged violations of the substantive privacy requirements of the U.S.-EU Safe Harbor Framework, which provides a method for U.S. companies to transfer personal data lawfully from the European Union to the United States.

The proposed settlement bars Google from misrepresenting the privacy or confidentiality of individuals’ information or misrepresenting compliance with the U.S.-E.U Safe Harbor or other privacy, security, or compliance programs. The settlement requires the company to obtain users’ consent before sharing their information with third parties if Google changes its products or services in a way that results in information sharing that is contrary to any privacy promises made when the user’s information was collected. The settlement further requires Google to establish and maintain a comprehensive privacy program, and it requires that for the next 20 years, the company have audits conducted by independent third parties every two years to assess its privacy and data protection practices.

The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning March 30, 2011 and continuing through May 2, 2011, after which the Commission will decide whether to make the proposed consent order final.

Sen John Kerry (D-MA) said the settlement underscores the need for legislation that outlines how businesses can use consumer information collected online.

Center for Democracy & Technology President Leslie Harris said: "The terms of this agreement are strong medicine for Google and will have a far-reaching effect on how industry develops and implements new technologies and services that make personal information public. We expect industry to quickly adopt the new requirement for opt-in consent before launching any new service that will publicly disclose personal information. This settlement sends the message that companies not only have to keep the promises they make to consumers, they must give users control over any technologies that make their information public."

Two key supporters of a public safety plan authored by the Federal Communications Commissions (FCC) have changed positions to support a White House proposal instead.

Former Gov. Tom Kean (R-NJ) and former Rep. Lee Hamilton (D-IN), the chairmen of the 9/11 Commission, switched their positions to back a spectrum plan offered by key senators and endorsed by the Obama Administration. Both Kean and Hamilton had been frequently invoked by those who want a D-Block auction rather than a direct allocation of airwaves to public safety agencies. If the FCC is to directly allocate airwaves to public safety, it needs a new law. Senate Commerce Chairman Jay Rockefeller (D-WV) has introduced legislation, as has House Homeland Security Chairman Pete King (R-NY). It's unclear whether the proposal can get support from House Republicans worried about cost.