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April 2011

Breach Brings Scrutiny

A data breach at a little-known entity that affected companies from J.P. Morgan Chase & Co. to TiVo Inc. is shining a light on the outsourcing of email marketing campaigns, a practice that has grown steadily over the past decade as consumers become less responsive to commercial pitches.

Epsilon Data Management LLC, a division of Alliance Data Systems Corp., said last week that hackers had accessed names and email addresses in its systems. In the days that followed, more than 40 companies -- including J.P. Morgan Chase, TiVo and others -- have said that their customers were among the victims. The companies had hired Epsilon to manage marketing campaigns. When retailers such as Best Buy Co. and Target Corp. email promotions to customers, the likely buyers are often identified by and the messages are sent by firms such as Epsilon. Managing bulk mailings can be time-consuming and the technology to sort through customer information to come up with targeted promotions is often changing too quickly for businesses to do it on their own, experts say. Companies like Epsilon know not to send a promotion for a winter coat to someone who lives in Miami, for example, or an email boasting low rates for mortgage refinances to people who don't own their homes. "We may receive an email from the same retailer but they would be completely different," said Dave Frankland, an analyst at Forrester Research. "Managing that across millions of customers is really complex." In addition to coming up with pitches customers are more likely to respond to, third parties like Epsilon also help ensure that an email isn't caught in a spam filter. Normally, 20% of legitimate email never reaches an inbox, according to Return Path Inc., which helps its clients deliver emails. Epsilon works with the largest email providers like Yahoo Inc., Google Inc., and Microsoft Corp. to ensure that the messages it sends to people who have elected to receive them get through. Epsilon said it sends more than 40 billion emails a year and that it has over 2,500 customers. Epsilon's revenue increased 27% from a year ago to $180 million in the quarter ended Dec. 31, according to Alliance, which acquired Epsilon in 2004 for about $300 million. Epsilon said about 2% of its clients were affected by the breach.

FCC Order on MSS Spectrum

On April 6 the Federal Communications Commission released a report and Order on Fixed and Mobile Services in the Mobile Satellite Service Bands at 1525-1559 MHz and 1626.5-1660.5 MHz, 1610-1626.5 MHz and 2483.5-2500 MHz, and 2000-2020 MHz and 2180-2200 MHz. In the order, the FCC acts on the proposals contained in the July 15, 2010, MSS NPRM, which built on the recommendations of the National Broadband Plan.

First, the FCC adds co-primary Fixed and Mobile allocations to the MSS 2 GHz band, consistent with the International Table of Allocations. This action will lay the groundwork for more flexible use of the band, including for terrestrial broadband services, in the future.

Second, in order to create greater predictability and regulatory parity with bands licensed for terrestrial mobile broadband service, the FCC extends its existing secondary market "spectrum manager" spectrum leasing policies, procedures, and rules that currently apply to wireless terrestrial services to the use of MSS/ATC spectrum for the provision of terrestrial services.

FCC Proposes Rules Changes to Improve Wireless Coverage Through the Use of Signal Boosters

On April 5 the Federal Communications Commission adopted a Notice of Proposed Rulemaking (NPRM) to facilitate the development and deployment of well-designed signal boosters, which hold great potential to empower consumers in rural and underserved areas to improve their wireless coverage in their homes, at their jobs, and when they travel by car, recreational vehicle, or boat.

Although by one measure, 99.6 percent of the nation's population is served by one or more mobile voice providers, and more than 98 percent of the nation's population can now receive "advanced" or "3G" wireless services, coverage gaps exist within and at the fringes of those service areas and continue to pose a problem for residents, businesses, public institutions, visitors, and public safety first responders, particularly in rural areas. Signal boosters are part of the solution to addressing coverage gaps in rural areas. Signal boosters can also mitigate service gaps in difficult-to-serve in-building environments such as in office buildings where people work, in health care facilities where doctors and other health care personnel need reliable communications, and on educational campuses where students want access to cutting edge wireless service offerings. In addition, signal boosters can provide public safety benefits, for example, by enabling the public to connect to 911 in areas where wireless coverage is deficient or where an adequate communications signal is blocked or shielded.
The regulatory framework for signal boosters proposed in this Notice of Proposed Rulemaking (NPRM) is one element in a set of initiatives designed to promote deployment of mobile voice and broadband services in the United States. Well-designed, properly operating, and properly installed signal boosters have the potential to improve consumers' wireless network coverage without harming commercial, private, and public safety wireless network performance.

Malfunctioning, poorly designed, or improperly installed signal boosters, however, may harm consumers by blocking calls, including E-911 and other emergency calls, and decreasing network coverage and capacity. The regulatory framework proposed in this NPRM seeks to create appropriate incentives for carriers and manufacturers to collaboratively develop robust signal boosters that do not harm wireless networks. This, in turn, will enable consumers to improve their cell phone coverage as they deem necessary. The public interest is best served by ensuring that consumers have access to well-designed boosters that do not harm wireless networks.

The NPRM proposes a new regulatory framework authorizing individuals and entities to operate "consumer signal boosters" provided the devices comply with: (1) all applicable technical and radiofrequency (RF) exposure rules, and (2) a set of parameters aimed at preventing and controlling interference and rapidly resolving interference problems should they occur. We also propose revisions to the rules governing signal boosters used for private land mobile services.

FCC Adopts New Rules and Proposes Changes to Video Relay Service

As part of its ongoing efforts to ensure that the video relay service (VRS) continues to provide a crucial telecommunications link for people who are deaf and hard-of-hearing, the Federal Communications Commission adopted rules designed to eliminate the waste, fraud and abuse that has plagued the VRS program and had threatened its ability to continue serving Americans who use it and its long-term viability.

In an accompanying Further Notice of Proposed Rulemaking (FNPRM), the Commission asked for public comment on proposed modifications to the current FCC certification procedures used to determine which companies may provide Internet-based telecommunications relay service (TRS).

VRS enables persons who use American Sign Language (ASL) to communicate with other individuals who do not know ASL through a broadband connection using a video link. A communications assistant (CA) interprets (relays) the conversation back and forth between the parties in sign language and voice.
The FCC's actions are intended to eliminate illegitimate payments from the TRS Fund to providers, ensure that only qualified providers of service are permitted to receive compensation from the Fund, and enable the Commission to improve its oversight of provider operations to achieve better compliance with the TRS rules. The FCC's efforts to rid the TRS program of fraud and abuse demonstrate its commitment to ensuring that VRS remains a valuable communication tool for Americans who use it to communicate with friends, family and colleagues on a daily basis.

FCC Names New Administrator Of Interstate TRS Fund

The Federal Communications Commission has awarded Rolka Loube Saltzer Associates, LLC, (RLSA) of Harrisburg (PA) a contract to administer the Interstate Telecommunications Relay Service (TRS) Fund, a Fund used to support communication service for persons who have hearing or speech disabilities or who are deaf-blind. Since July 26, 1993, the FCC has required that each common carrier providing voice transmission services also provide TRS throughout their service areas.

The contract specifies the oversight and administrative duties that RLSA will be assuming, which include protecting the integrity of the TRS Fund as well as overseeing the distribution of funds under the FCC's newly established national equipment distribution program for people who are deaf-blind. The latter is required by the new Twenty-first Century Communications and Video Accessibility Act, signed into law on October 8, 2010.

TRS is a telephone transmission service that allows persons who have hearing or speech disabilities or are deaf-blind, to place and receive telephone calls. TRS is available in all 50 states, the District of Columbia, and some of the U.S. territories for local and long distance calls.

There is no cost of TRS to the TRS user. The costs of intrastate TRS are supported either through state telephone rate adjustments, or surcharges on local telephone bills. The costs of interstate TRS are supported by contributions made to the TRS Fund by all telecommunications and VoIP service providers. TRS providers are then compensated for the costs of providing interstate TRS, including TRS provided over the Internet, from the TRS Fund on a minutes-of-use basis.

As Administrator of the TRS Fund, RLSA will oversee the collection and disbursement of funds, which shall include reviewing all monthly submissions from TRS providers seeking compensation to ensure there are no irregularities, discrepancies or violations of the Commission's TRS rules, and that there are no indications of potential fraud. RLSA will also establish and implement internal controls and procedures for the disbursement of funds, subject to Commission approval.

RLSA will withhold payment to TRS providers that fail to demonstrate full compliance with all relevant Commission rules governing the provision of TRS, fail to provide adequate documentation or justification for compensation in response to requests for such documentation by the FCC, or engage in potential waste, fraud, or abuse.

FCC Established National Deaf-Blind Equipment Distribution Program

On April 6, 2011, the Federal Communications Commission established a National Deaf-Blind Equipment Distribution Program (NDBEDP) to enable low-income individuals who are deaf-blind to access 21st Century communications services. The pilot program will help ensure that qualified individuals have access to the Internet, and advanced communications, including interexchange services and advanced telecommunications and information services.

This action implements a provision of the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA). The CVAA allocated $10 million annually from the Interstate Telecommunications Relay Service (TRS) Fund for this nationwide equipment distribution effort. The FCC concluded that the best approach would be to establish a two-year pilot program, with the option of extending this for a third year, so that the FCC can assess the most efficient and effective method of administering the NDBEDP on a permanent basis. Under the NDBEDP pilot program, the FCC will certify and provide funding to one entity in each state to distribute equipment to low-income individuals who are deaf-blind.

The FCC will make the full amount of the authorized funding, $10 million, available for each year of the pilot program. Of this amount, the FCC will set aside up to $500,000 per year for national outreach efforts. Each state will initially receive a minimum initial funding allocation of $50,000, with the balance of the available funds allocated in proportion to each state's population. Certified programs will have to submit documentation to support claims for reimbursement for NDBEDP equipment and related services, up to each state's funding allocation. Certified programs must submit reports on their activities and expenses every six months, disclose potential conflicts of interest, and conduct annual independent audits.

The FCC adopted the following rules and policies for the NDBEDP pilot program:

  • Certified Programs: Entities must apply for certification to receive funding support under the NDBEDP pilot program within 60 days of the effective date of the rules. The Commission will certify only one entity for each state.
  • Consumer Eligibility: "Individuals who are deaf-blind," as defined in the Helen Keller National Center Act, are eligible to apply for equipment. Because of the unusually high medical and disability-related costs incurred by these individuals, the Order sets a low-income eligibility threshold of 400% of the Federal Poverty Guidelines.
  • Equipment: The Order permits distribution of specialized and off-the-shelf equipment, separately or in combination, as long as it meets the needs of the deaf-blind individual and makes communications services covered under the CVAA accessible. The reasonable costs of the equipment distributed, warranties, maintenance, repairs, and refurbishing will be covered.
  • Related Services: The reasonable costs of state and local outreach efforts, individual assessments of a deaf-blind person's communications equipment needs, equipment installation, and individualized training of consumers on how to use the equipment will also be covered under the NDBEDP.

Miraculous makeover: using the new FCC.gov

The Federal Communications Commission unveiled a new beta version of its website (beta.fcc.gov) that doesn't just respond to concerns. It puts fcc.gov on the road to becoming one of the best government communications sites -- anywhere.

First, there's the attractive and economic blue design. Instead of trying to stuff every conceivable department and category into the home page, like the current site does, beta.fcc offers four initial categories: "The FCC," "Our Work," "Tools and Data," and "Business and Legal," that more easily take users to everywhere else in the portal. That's the key to this beta's success.

Here are some of the best features of the new site:

  • Take action: Anyone who goes to beta.fcc will quickly notice a prominent subhead on the top right side of the page titled "Take Action." From there you'll be directed to a page where you can file public comments with the FCC on a wide variety of issues.
  • Understanding FCC jargon: The new site now offers an encyclopedia! In beta form it seems to be a compendium of terms about telecommunications related issues -- e.g., "roaming," and "retransmission consent" -- plus a glossary about the FCC itself.
  • Finding important issues: "Business and Legal" section easily takes you to the mergers page. The "Our Work" section takes you to broadband, spectrum, and public safety pages. And lo and behold, the "The FCC" menu actually takes you to a page that explains what the FCC does.

Comcast to FCC: Keep Hulu info secret

Comcast has asked the Federal Communications Commission to put a “top secret” stamp on its deal with Hulu.

According to a letter placed in the FCC’s public file, the company contends that a document it will soon file with the FCC detailing its deal with the Internet site that shows NBC and other network programming is too sensitive for the public to see. “This document is entitled to enhanced confidential treatment because of its commercial sensitivity and the competitive harm that would result from its public disclosure,” Comcast attorneys wrote. “The information in the Hulu LLC Agreement would give third parties a detailed understanding of Hulu’s decision making process which could, in turn, allow them to make informed judgments about how Hulu might react in future negotiations or to predict Hulu’s future strategic decision making.” Comcast wants the information treated under the same confidential order that covered its merger with NBC-Universal. The FCC and other federal agencies often keep proprietary information confidential.

Glenn Beck to End Daily Fox News Program

Glenn Beck will end his daily Fox News Channel program later this year. His departure was jointly announced in a statement on Wednesday by Fox and Beck’s company, Mercury Radio Arts. Fox News and Mercury Radio Arts, which have clashed over the making of the program, will “work together to develop and produce a variety of television projects for air on the Fox News Channel as well as content for other platforms including Fox News’ digital properties,” the companies said in the statement. The joint statement did not specify an end date for Beck’s show, called “Glenn Beck,” which has been telecast at 5 p.m. on Fox News since early 2009. Asked if Fox News had a rough end date for the program, a spokeswoman referred back to the statement. Beck’s contract with Fox ends in December.

April 13, 2011 (Privacy Bill of Rights; Spectrum Hearing)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, APRIL 13, 2011

Find Headlines online at http://benton.org/headlines

For stories from April 5 see http://benton.org/node/55159


PRIVACY
   Commercial Privacy Bill of Rights - press release
   Data thieves target e-mail addresses [links to web]

INTERNET/BROADBAND
   North Carolina misses the municipal broadband benefits Kansas City gets with Google - analysis
   Let’s Keep the Community in Community Broadband - op-ed [links to web]
   Don't Ignore Urban Communities in the Broadband Infrastructure Mix - analysis
   Vermont Senate advances bill to ease broadband [links to web]
   FCC Finds MagicJack Can't Collect Access Charges From AT&T - analysis [links to web]

WIRELESS
   Recap: Using Spectrum to Advance Public Safety, Promote Broadband, Create Jobs, and Reduce the Deficit
   AT&T Synergy Claims Should Be Taken With Grain of Salt - analysis
   News Flash! FCC Identifies Market Failures in Wireless Marketplace - analysis
   Consumers Union Warns Congress About AT&T Deal
   AT&T, T-Mobile file merger application
   How iPhone and Android Are Changing the Network - analysis
   Only AT&T could trumpet $500 per gigabyte as a price cut - analysis [links to web]

TELEVISION
   FCC's Genachowski at NAB Show 2011
   Smith To FCC: Voluntary Does Not Mean Forced Repacking
   Gordon Smith: Free TV Doesn't Mean For Cable
   CBS Chief Says Industry Needs To Battle Together [links to web]
   Commissioner Clyburn on watch for market failure in retransmission negotiations
   Cable’s Real Challenge Is Not Cord Cutters, But ‘Cord Nevers’ - analysis [links to web]
   PBS Testing Mobile DTV For Emergency Alert Overhaul
   FCC Grants Sale of ACME Stations, Denies TWC Petitions

CONTENT
   Freelancer to file class-action suit against HuffPost and AOL over compensation [links to web]
   Bing-powered share of searches reaches 30 percent in March 2011 - press release [links to web]
   Google Has Largest Share of US Searches as Microsoft Gains, Yahoo Slips [links to web]
   Cinemas in threat over TV screenings [links to web]
   Digital Families: More Ethnic, More Media Diversity [links to web]

HEALTH
   HHS community-college program sees first graduating class [links to web]

EDUCATION
   FCC Commissioner Clyburn Education Technology Policy Summit 2011
   Apple's iPad: Kindergartners getting tablet computers in Maine [links to web]

FCC REFORM
   Rep Stearns calls for overhaul of ‘byzantine’ FCC processes

GOVERNMENT & COMMUNICATIONS/GOVERNMENT PERFORMANCE
   Transparency websites hit by budget ax [links to web]
   Information Technology: Continued Improvements in Investment Oversight and Management Can Yield Billions in Savings - research [links to web]
   Kundra Says His Office Has Saved Taxpayers $3 Billion
   Senate panel questions security of Google government apps [links to web]

RESEARCH
   US Lagging in Using Technology, Study Shows

MORE ONLINE
   Rebels Hijack Gadhafi's Phone Network [links to web]
   FCC's Baker Finds Herself Playing 'This Is Your Life' [links to web]
   David Byrne Makes Example Out Of Copyright Scofflaw Charlie Crist [links to web]
   Cisco to fold Flip video-camera business [links to web]
   Social Media is Too Engaging for Its Own Good - op-ed [links to web]
   Budget Issues Top the News Agenda - research [links to web]
   Level 3 would move up the value chain with Global Crossing buy - analysis [links to web]

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PRIVACY

COMMERCIAL PRIVACY BILL OF RIGHTS
[SOURCE: US Senate, AUTHOR: Sen John Kerry (D-MA), Sen John McCain (R-AZ)]
Sens John Kerry (D-MA) and John McCain (R-AZ) introduced a Commercial Privacy Bill of Rights to establish a baseline code of conduct for how personally identifiable information and information that can uniquely identify an individual or networked device are used, stored, and distributed. This legislation would increase consumer trust in the market and generating additional activity as a result as well as protecting people from unscrupulous actors in the market by creating a set of basic rights to which all Americans are entitled. These privacy rights include:
The right to security and accountability: Collectors of information must implement security measures to protect the information they collect and maintain.
The right to notice, consent, access, and correction of information: Collectors of information must provide clear notice to individuals on the collection practices and the purpose for such collection. Additionally, the collector must provide the ability for an individual to opt-out of any information collection that is unauthorized by the Act and provide affirmative consent (opt-in) for the collection of sensitive personally identifiable information. Respecting companies existing relationships with customers and the ability to develop a relationship with a potential customers, the bill would require robust and clear notice to an individual of his or her ability to opt-out of the collection of information for the purpose of transferring it to third parties for behavioral advertising. It would also require collectors to provide individuals either the ability to access and correct their information, or to request cessation of its use and distribution.
The right to data minimization, constraints on distribution, and data integrity: Collectors of information would be required to collect only as much information as necessary to process or enforce a transaction or deliver a service, but allow for the collection and use of information for research and development to improve the transaction or service and retain it for only a reasonable period of time. Collectors must bind third parties by contract to ensure that any individual information transferred to the third party by the collector will only be used or maintained in accordance with the bill’s requirements. The bill requires the collector to attempt to establish and maintain reasonable procedures to ensure that information is accurate.
Other key elements of the Kerry-McCain Commercial Privacy Bill of Rights include:
Enforcement: The bill would direct State Attorneys General and the Federal Trade Commission (FTC) to enforce the bill’s provisions, but not allow simultaneous enforcement by both a State Attorney General and the FTC. Additionally, the bill would prevent private rights of action.
Voluntary Safe Harbor Programs: The bill allows the FTC to approve nongovernmental organizations to oversee safe harbor programs that would be voluntary for participants to join, but would have to achieve protections as rigorous or more so as those enumerated in the bill. The incentive for enrolling in a safe harbor program is that a participant could design or customize procedures for compliance and the ability to be exempt from some requirements of the bill.
Role of Department of Commerce: The Act directs the Department of Commerce to convene stakeholders for the development of applications for safe harbor programs to be submitted to the FTC. It would also have a research component for privacy enhancement as well as improved information sharing.
benton.org/node/55209 | US Senate | read the bill -- 44 pages | see a summary of the bill | The Hill | B&C | Consumers Union | Reuters | ars technica
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INTERNET/BROADBAND

NC, KANSAS CITY AND MUNI BROADBAND
[SOURCE: Fierce, AUTHOR: Samantha Bookman]
The excitement around Google's selection of Kansas City, Kansas as the first city in which the search engine giant will build out a 100 Gbps open access network has perhaps overshadowed the latest dust-up in North Carolina over legislation that would prevent cities in that state from doing anything similar to what Kansas City is about to do.
It's the endgame in a years-long series of legislative moves to disallow municipal-owned broadband networks from being established in North Carolina cities. Past bills did not make it through the state legislature, but HR. 129, aka the "Level Playing Field/Local Government Competition" bill introduced by Republican Rep. Marilyn Avila was approved 81-37 by the state's House of Representatives in late March and is currently being debated at the state Senate level.
Municipal broadband doesn't have to prove itself as a viable option for high-speed networking, any more than incumbent telcos and cablecos have to prove themselves. It's managed by, paid for by, and ultimately owned by the residents and taxpayers of the community it serves. And while failure in the face of competition from private providers or due to a shaky economic climate is a possibility, the advantages of a community-owned and managed high speed network--lower subscription rates, higher broadband speeds, and a resultant economic boost for local businesses-- outweigh the disadvantages.
benton.org/node/55214 | Fierce
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DON'T IGNORE URBAN COMMUNITIES
[SOURCE: Fighting the Next Good Fight, AUTHOR: Craig Settles]
[Commentary] Conventional wisdom that appears to be driving broadband policymakers, media coverage and funding is that rural areas need infrastructure and urban areas just need to figure out how to get more people using (buying) the infrastructure that exists. Hmm, maybe not. Plenty of urban areas, similar to their rural kith and kin, need new, better infrastructure. Incumbents like to tell us that low-income communities are well covered by broadband because there are retail stores all over town where people can buy a cell phone and service. Cable service is “available” everywhere because TV ads blanket metro areas. This argument only holds water if you don't look close enough to realize that bucket’s full of holes. If a business in the poorest parts of town want highspeed service, it’s going to cost more because the nearest available wireline is so far away. As cabling deteriorates or becomes obsolete, incumbents aren't making the ‘hood a priority for upgrades because they regard it as a poor investment opportunity. And they aren't giving residents price breaks either. As one person said, “you can put free computers in houses, but if Internet access is $90/month and I clear $20K/year, adoption won't happen.”
benton.org/node/55216 | Fighting the Next Good Fight
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WIRELESS

HEARING RECAP
[SOURCE: House of Representatives Commerce Committee]
On April 12, the House Commerce Committee's Communications and Technology Subcommittee held a hearing entitled “Using Spectrum to Advance Public Safety, Promote Broadband, Create Jobs, and Reduce the Deficit." Subcommittee Chairman Greg Walden (R-OR) said: "We’re here today for a broad overview on how spectrum can help expand broadband availability, advance public safety, help broadcasters further innovate, create jobs, and reduce the deficit. Spectrum is a critical input for broadcast television, wireless voice and broadband services, and public safety communications. As a former radio broadcaster and licensed HAM radio operator, spectrum is a medium with which I am somewhat familiar. These critical uses of spectrum have shaped the way Americans live, work, and stay connected to their families and the world.... Today we begin discussing how we will get the next wave of spectrum deployed. There is growing consensus we need between an additional 100 MHz and 300 MHz in the short term -- say 5 to 10 years -- to meet the exploding consumer and economic demand for wireless broadband. Given the staggering growth in smartphone sales, app store sales, and demand for streaming video content, it is no surprise that the FCC’s National Broadband Plan and the President of the United States are calling for an additional 500 MHz of spectrum to be allocated for wireless broadband use in the next five years. There are a variety of options that could be used in combination to start addressing this need."
House Commerce Committee Chairman Fred Upton (R-MI) said: "One thing we will consider is the spectrum allocated to the federal government and whether those spectrum bands can be better allocated to both the government and commercial sectors. There is already legislation designed to help relocate government users and provide them with better communications resources, to be paid for with auction proceeds from spectrum they clear. And, there may be ways to make that legislation work even better."
Rep. Ed Markey (D-MA) emerged as a champion of broadcasting, at least when it came to providing emergency communications. He pressed the Federal Communications Commission's chief of the Office of Engineering and Technology, Julius Knapp, on what percentage of spectrum the government needs could be freed up by being more efficient with the spectrum already allocated. "A significant percentage," asked Markey. "A fair percentage," said Knapp, who, pressed by Rep Markey said it was probably somewhere between 10% and 50%, a range proposed by Rep Markey that Knapp said was probably about right. "Good," said Rep Markey. "We can get a big part of this problem solved just by ensuring there is more efficient use of the spectrum." Markey also pointed to public interest principles the FCC needed to abide by.
Then turning to another "Good," broadcast witness Robert Good, chief engineer at WGAL-TV, Markey asked whether if the spectrum reallocation and auction process was voluntary, if broadcasters were compensated, and if interference were not created for other stations who did not wish to participate, whether broadcasters were open-minded to reallocation. Good said that only if broadcasters were held harmless, by which he meant that "coverage areas are the same." Rep Markey asked whether that was something that could be worked out among engineers of common sense and good will. Good could not get there given the issue of repacking. "I am not confident we can achieve that type of coverage given that scenario."
The most pointed questions about the impact of the FCC spectrum reclamation plan on broadcasters came from Rep John Dingell (D-MI), famous for requiring one-word answers, though he allowed some leeway. Once he had determined that Knapp had helped draft the National Broadband Plan, he asked whether the FCC had failed to take into account the channel reservations of the Canadians, which are protected by treaty, in cities like Detroit. Knapp said that the plan had acknowledged that, and that the FCC has taken that into account and was talking to the Canadians. Dingell said that he understood that in order to get the 120 MHZ from broadcasters would, if the Canadian allocations were preserved, that would leave no available U.S. broadcast channels. Knapp said he did not believe that would be the case. But he also conceded that the FCC would not know exactly what channels would be available. "The repacking will depend on what stations participate in the incentive auction," Knapp said, "and we don't know which those will be."
benton.org/node/55282 | House of Representatives Commerce Committee | Majority Committee Staff | read witness statements | B&C
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A GRAIN OF SALT
[SOURCE: Wall Street Journal, AUTHOR: Martin Peers]
Merger activity is heating up, and with it talk of “synergies.” But what happens to those promises once a company has completed an acquisition? Take AT&T. The telecom giant has claimed synergies from buying T-Mobile USA will more than offset the $39 billion purchase price. But AT&T has made similar promises alongside previous acquisitions, and it isn't clear it has achieved them. When AT&T announced the $67 billion purchase of BellSouth in March 2006, it said the deal would generate synergies with an annual run rate of $2 billion by 2008, rising to $3 billion in 2010. That was mainly from cost savings in areas like advertising and staffing. The deal closed at the end of 2006. AT&T’s filings show that its total earnings before interest, taxes, depreciation and amortization, or Ebitda, rose by about $2.5 billion between 2006, assuming the combination had been in effect all year, and 2008. That means if the synergies were achieved, profits from the organic business were barely up. As it has done with the T-Mobile acquisition, AT&T also promised the BellSouth deal would save money on capital expenditures. It estimated annual savings of $400 million to $500 million in capital expenditures by 2009, off a base of the combined companies’ 2005 capital-expenditure spending of $17.9 billion, about 15% of revenue. It is hard to see where those savings showed up. AT&T’s capital expenditures averaged $18.4 billion between 2007 and 2010, still about 15% of revenue. And it would have been higher if not for a big dip during the 2009 economic downturn. Indeed, last year it was $19.53 billion, 15.7% of revenue, and AT&T has projected it will be in the “low to mid-$19 billion range” this year.
benton.org/node/55277 | Wall Street Journal
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FCC IDENTIFIES WIRELESS MARKETPLACE FAILURES
[SOURCE: Public Knowledge, AUTHOR: Rob Frieden]
[Commentary] The Federal Communications Commission's recent Second Report and Order on data roaming obligations of facilities-based operators offers two fascinating insights, only one of which will receive much attention. Scholars and practitioners alike will concentrate on the FCC’s use of Title III spectrum management as the basis for mandating data roaming negotiations, backed up by formal complaint resolution. Analysts will marvel at how the Commission has managed to impose an interconnection regime without convincingly addressing how information service providers lawfully bear such duties. Additionally the Commission does not fully explain how the duty to negotiate on commercially reasonable terms and conditions does not constitute common carriage and a “duty to deal.” This document is very, very important, because the FCC clearly identifies instances where the nature and type of wireless competition is inadequate to guarantee data roaming agreements between the major national carriers, such as AT&T and Verizon, and just about any other carrier. Only AT&T and Verizon opposed a data roaming obligation, because, as noted by the Commission, these carriers have refused to deal and market consolidation “has reduced the number of potential roaming partners for some of the smaller, regional and rural providers” while also reducing the need for AT&T and Verizon to secure reciprocal roaming agreements. Such candor coming from an agency that never saw a wireless merger it could not approve and has never disputed industry claims regarding how tirelessly they have to compete.
benton.org/node/55248 | Public Knowledge
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CU WARNING ON AT&T|T-MOBILE
[SOURCE: New York Times, AUTHOR: Jenna Wortham]
Consumers Union sent a letter on to members of Congress warning of the potential impact of AT&T’s proposed acquisition of T-Mobile. “It is critical to look at the effect this merger would have on consumers’ pocketbooks, choice and service,” said Parul P. Desai, policy counsel for Consumers Union, in a statement about the move. “Ultimately, it does not appear to be in their favor.” The group said its main concern is the pricing differences between AT&T and T-Mobile wireless plans. The group found that T-Mobile plans were more affordable, charging from $15 to $50 less each month than comparable offerings from AT&T. On average, the group found, AT&T charged $200 more per year than T-Mobile for similar plans. “We are concerned that T-Mobile’s departure from the wireless market would eliminate a relatively low-cost carrier as an option that many consumers need access to in order to afford quality wireless service,” Desai said. In addition, on average, people tended to be less satisfied with AT&T’s customer service than T-Mobile’s, the group found.
benton.org/node/55242 | New York Times | The Hill | press release
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AT&T FILES APPLICATION AT DEPT OF JUSTICE
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
On April 8, AT&T filed its application for an antitrust review of its proposed acquisition of T-Mobile at the Justice Department. The company said it aims for April 21 to file its applications for a public interest regulatory review at the Federal Communications Commission. Experts say the reviews could take one year to 18 months. The merger appears to be a clear horizontal deal that initially looks hard to pass. Justice has approved Google’s purchase of ITA and Comcast’s joint venture with NBC Universal, but those were so-called vertical mergers without significant overlapping businesses. A source at the FCC said the merger will be an uphill battle for AT&T. But James Cicconi, AT&T’s executive vice president of external affairs, is arguing that the deal will still leave plenty of competition and that a market-by-market analysis performed by Justice will prove it.
benton.org/node/55240 | Washington Post
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SMARTPHONES CHANGING THE NETWORK
[SOURCE: GigaOm, AUTHOR: Om Malik]
“The iPhone is doing to the mobile world, what the browser did to the wireline world,” said Pradeep Sindhu, co-founder of Juniper Networks. The iPhone and Android-based smartphones are changing everything, including how his company thinks about network infrastructure and how it will refine the network architecture in the future. Many who are developing apps and services for mobile devices don't pay much attention to the innards of the networks themselves, barring moments when our network behaves like me running up a hill. We should be paying attention to all the underlying networking technologies, mostly because it helps us think about what these front-end services can do. Sindhu explains that today the “networks” are the enabling technology, instead of super fast, energy hogging microprocessors. As the performance of the network increases, so does the performance of everything connected to that network, and by extension, the apps built on those device platform.
benton.org/node/55223 | GigaOm
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TELEVISION

GENACHOWSKI AT NAB
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairman Julius Genachowski]
Speaking at the National Association of Broadcasters' annual convention, Federal Communications Commission Chairman Julius Genachowski focused on how much technology is changing the broadcasting industry and our economy; how these changes require that we update our communications and spectrum policies; and how one of the most important tools the FCC needs is the ability to conduct voluntary incentive auctions -- an incentive-based mechanism to use market forces to free up new spectrum to meet rapidly growing consumer demand and fuel our economy. He stressed that incentive auctions will be voluntary, but also said, "voluntary can't mean undermining the potential effectiveness of an auction by giving every broadcaster a new and unprecedented right to keep their exact channel location. This would not only be unprecedented, it would give any one broadcaster veto power over the success of the auction -- and be neither good policy for the country, nor fair to the other participants."
benton.org/node/55226 | Federal Communications Commission | Washington Post | B&C - repack | B&C - retransmission | TVNewsCheck
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SMITH: NO FORCED REPACKING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
At the National Association of Broadcasters convention in Las Vegas, NAB Chairman Gordon Smith said broadcasters are in the battle of their lives against forces of "new media" painting them as stuck in the Howdy Doody era, and government overreaching for the next broadband app. he said that forcibly repacking stations was not his idea of a voluntary spectrum reclamation plan. Broadcasters have embraced the digital future, he said, suggesting that they now faced a concerted effort to squeeze the life out of a service that is forward-thinking and ready to be a partner in the broadband future. He said the $15 billion broadcasters spent transitioning from analog to digital -- and giving up 25% of spectrum in the process--was in order to remain relevant in a digital age, but now less than two years later, wireless companies want another 40%. "Hey, we already gave at the office," he said.
benton.org/node/55228 | Broadcasting&Cable | read the speech | TVNewsCheck
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FREE TV, BUT NOT FOR CABLE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
At the National Association of Broadcasters convention in Las Vegas, NAB Chairman Gordon Smith took aim at cable operators in defense of retransmission payments. He called their channels "cable stations," and said they get paid for their content, and should get paid. But so should broadcasters, he said, drawing the parallel. "Stations deserve the right to negotiate for compensation of their programming. And we know that the system works, because thousands of agreements have been successfully negotiated over the years, with a success rate of over 99 percent." "Some pay-TV companies, however, want to pay nothing or only a pittance for local stations' signals - even though local content and network programming offered by broadcasters are the ones viewers watch most." Smith said that when he is talking about free TV, he means free to viewers, "not to multi-billion dollar corporations that sell subscriptions on the backs of our content."
benton.org/node/55229 | Broadcasting&Cable | read the speech
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CLYBURN ON RETRANSMISSION
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Federal Communications Commission member Mignon Clyburn told the American Cable Association that she is on the lookout for market failure when it comes to retransmission consent negotiations. These negotiations set the fees pay-TV providers must pay to broadcasters to play their content. Fee disputes can lead to TV blackouts. Commissioner Clyburn said: "I fully understand the intent of the retrans rules, and that market forces should be allowed to work. But I am on the lookout for the consumers in this country, and if the market isn't working, we need to consider taking appropriate steps. We'll carefully look through the comments and replies that come in as a result of questions we asked last month, and I'll continue to work with your D.C. team on your concerns. While I can't stop all of you all from working with NASA to build a time machine set back to 1992 so you can improve the retrans language before the Cable Act passes, I hope you'll trust me to keep your interests in mind as we move forward."
benton.org/node/55236 | Hill, The | B&C
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PBS TESTING EMERGENCY ALERT
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
PBS will start testing a mobile DTV-based emergency alert system later this year, the noncom service announced in Las Vegas Tuesday, calling it "the first major overhaul of the nation's aging Emergency Alert System (EAS) since the Cold War." The alerts could be delivered to "cell phones, tablets, laptops and netbooks, as well as in-car navigation systems." PBS said it will work with FEMA, the FCC, and other agencies in creating the pilot project. Broadcasters have been arguing that they need to keep their spectrum options open when it comes to new services like mobile DTV.
benton.org/node/55231 | Broadcasting&Cable
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FCC APPROVES STATION BUY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has approved the sale of two ACME stations in Wisconsin and Ohio to LIN and to an owner whose station is being run by LIN. The FCC April 8 approved the sale of CW affiliates WCWF(DT) Green Bay-Appleton (WI) and WBDT(DT) Dayton (OH) to LIN. The first to LIN under a failing station waiver -- LIN has already been operating it under a shared services agreement -- and the second to WBDT Television, LLC, which LIN has also been running under a shared services agreement and where LIN already own WDTN. TWC had argued, in part, that the deals should not go through because the resulting duopoly and combination of ownership and management would give LIN too much leverage in retrans agreements, since LIN had signaled it planned to combine retrans negotiations for the paired stations. In addition, WCWF and WBDT had previously been must-carry stations. The FCC concluded that WCWF had met the FCC definition of failing station, and that bargaining collectively for the station's retrans payments did not violate FCC rules. It also concluded that the WBDT sale broke no FCC rules, and that TWC's claims of potential harm from the combined negotiation as speculative. "Despite its claims to the contrary, it is apparent that TWC's real concern is its desire for reformation of the must-carry and retransmission consent process."
benton.org/node/55233 | Broadcasting&Cable
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EDUCATION

CLYBURN AT ED TECH SUMMIT
[SOURCE: Federal Communications Commission, AUTHOR: FCC Commissioner Mignon Clyburn]
Federal Communications Commission member Mignon Clyburn spoke at the Education Technology Policy Summit, focusing her remarks on broadband and the overhauling of the universal Service Fund. She noted the FCC's work to update the E-rate program which provides discounts on telecommunications services for schools and libraries. "No matter how successful policies to promote broadband adoption at home may be," she said, "we must continue to help schools and libraries be successful digital anchor institutions. The Internet is too powerful a tool not to be promoted and improved in our nation’s classrooms and libraries. All of you have seen the wonders of this technology become a larger part of each child’s daily curriculum. Teachers have integrated their lectures with content from the Internet. Students are using the Internet to supplement their education in the classroom. Students and teachers don't rely solely on their textbooks anymore. Through the Internet, children who would never have the opportunity to travel to another city, much less another country, can experience the sights and sounds and learn about distant places.
In addition, digital connections have the potential to save local schools time and money. Through distance learning, schools can offer classes where they don't have enough students to justify hiring a teacher. Accordingly, school districts can aggregate their resources to meet their collective needs. Teachers and parents can more easily communicate with one another through email and websites. The work you do every day supports these functions, and I am certain so much more. I applaud your efforts and ask that you continue to help us at the FCC find new and more efficient ways to increase educational success throughout the country."
benton.org/node/55255 | Federal Communications Commission
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FCC REFORM

STEARNS CRITICIZES FCC PROCESSES
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Rep Cliff Stearns (R-FL) called for major reforms at the Federal Communications Commission, saying the agency is ruled by "Byzantine regulatory processes" and is in dire need of an overhaul to increase transparency and streamline interactions with industry. "Secrecy breeds both inefficiency and distrust," he said. "The FCC already has both." Rep Stearns said FCC processes haven't kept pace with technological change and stand to hamper innovation. He said the public comment period on FCC proposals should come after proposals are released so stakeholders can be better informed about what they are commenting on. The FCC’s comment periods now come before proposals are unveiled to the public. He also called on the FCC to address the backlog in licensing requests. The FCC is "widely expected to change its mind between decision and regulation," Rep Stearns said. He endorsed legislation from Communications subcommittee ranking member Anna Eshoo (D-CA) that would allow two commissioners to meet privately, subject to certain disclosure rules. Such meetings are not barred for transparency reasons.
benton.org/node/55234 | Hill, The
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GOVERNMENT & COMMUNICATIONS/GOVERNMENT PERFORMANCE

KUNDRA POINTS TO $3B SAVINGS
[SOURCE: nextgov, AUTHOR: Joseph Marks]
The federal chief information officer told a Senate panel that the Obama Administration's drive to make government IT projects more responsive to changes in technology and more reliant on private sector infrastructure had saved about $3 billion in its first five months. Since introducing President Obama's 25-point implementation plan for reforming federal IT in December, CIO Vivek Kundra's office has reviewed 50 of the government's most troubled IT projects, canceling four and fundamentally reforming 11 others, Kundra told members of the Senate Homeland Security Committee's panel on federal financial management. "The government needs to operate much more like a nimble startup," Kundra said, "instead of investing billions of dollars in multi-year procurements," that are often outdated by the time they're implemented. The 25-point plan requires IT project managers to show significant gains for their agencies within six months. If not, they need to shut down or retool the projects.
benton.org/node/55205 | nextgov
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RESEARCH

US LAGGING IN TECH USE
[SOURCE: New York Times, AUTHOR: John Markoff]
The United States continues to lag other nations in its use of computing and communications technology, according to an annual study issued by the World Economic Forum. For the second consecutive year, the United States finished fifth in the study’s comparison of 138 countries that make up 98.8 percent of the world’s total gross domestic product. Sweden was first, followed by Singapore, Finland and Switzerland. These rankings, for 2010, are based on an index of 71 economic and social indicators, as diverse as new patents, mobile phone subscriptions and availability of venture capital.
The study showed the rapid progress of the so-called Asian Tigers, whose governments have invested heavily in technology. Besides Singapore, Taiwan was ranked 6th, South Korea 10th and Hong Kong 12th. Japan was 19th. China ranked 36th and India 48th, falling five places from 2009. Rounding out the large developing BRIC countries — Brazil, Russia, India and China — Brazil was 56th and Russia 77th. The country making the most progress in 2010 was Indonesia, which jumped 14 places to 53rd — in part because of high educational standards and in part because of the importance the government has placed on information and communications technology. Among Western nations, Canada was 8th, Norway 9th, Germany 13th, Britain 15th and France 20th. The two lowest countries were Burundi and Chad. The United States was uneven on many measures that affect economic competitiveness. For example, it ranked 76th in the rate of mobile phone subscriptions, 48th in low-cost access to business phone lines and 24th in percentage of households with a personal computer — behind Bahrain, Singapore and Brunei, among others. Professor Dutta said the United States ranked 52nd in math and science education.
benton.org/node/55279 | New York Times
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