April 2012

FCC pulls plug on LightSquared’s cellular project, angering investor Philip Falcone

Wall Street guru Philip Falcone placed a $14 billion bet on what he thought was a sure thing. Two years ago, his company had the blessing of the Federal Communications Commission to use satellites to bring cellular service to the farthest reaches of the country, a high priority for President Obama.

On April 5, the FCC has put the project on ice, all but killing it. And Falcone, acknowledging for the first time that his business is near bankruptcy, on Thursday pointed an angry finger at Washington. In a scathing critique of inside-the-Beltway politics, Falcone in an interview accused the FCC of bowing to special interests that could have been hurt by the innovation, robbing consumers of a cheaper alternative to AT&T and Verizon Wireless. Falcone and other business groups see the fall of Reston-based LightSquared as a cautionary tale of what can happen when a business bets on Washington.

(April 5)

Viacom vs. YouTube, Round 2

[Commentary] A federal appeals court has given Viacom a second chance to prove its copyright infringement claims against Google's YouTube, reviving a high-stakes battle between entertainment companies and Internet entrepreneurs over "user-generated content" sites.

The decision by the 2nd Circuit Court of Appeals was a partial win for both sides, but it left a few important issues unsettled as it tried to strike the right balance between competing interests. The appeals panel seemed to be trying to set narrower safe harbors, in response to copyright holders' complaints that the lower court's ruling upset the balance Congress had struck. In doing so, however, the 2nd Circuit raised new uncertainties about what sites must do to remain on the right side of the law. It's safe to expect more litigation as the courts struggle to apply notions of knowledge, control and responsibility to the increasingly decentralized and automated world of the Internet.

(April 6)

Consumer Reports, Times polls find broad data privacy concerns

Most consumers are "very concerned" about Internet firms selling information about them without their permission, according to a Consumer Reports survey.

The poll found that 71% of consumers were very concerned about online data collection, while 65% were worried about the way smartphone apps could access their personal contacts, photos, location and other data without their permission. The report came on the heels of a Times poll that found similar levels of concern. The USC Dornsife/Times survey, published Sunday, found that 82% of Californians were very or somewhat concerned about Internet and smartphone firms collecting their information. The USC/Times poll also found that when consumers were asked to rate how much they trusted some of the best-known tech firms, the scores were low. On a scale of zero to 10, with 10 being absolute trust, no firm scored higher than a 4.6 -- that was Apple. Google received a 3.8, while LinkedIn scored 3.0. YouTube was rated 2.8, Facebook scored 2.7, and Twitter earned a 2.4. (April 3)

Bans on streaming at work target bandwidth-eating sites

With employees hogging the Internet networks at work with heavy video and audio files unrelated to their jobs, more companies are shutting off streaming sites or limiting access.

Cincinnati-based Procter & Gamble is the latest mega-employer to confirm that it has shut down access to Pandora and Netflix for its 129,000 employees. Other sites required for business — YouTube and Facebook — aren't blocked for now, but P&G warned workers about using the Internet for personal reasons, according to The Cincinnati Enquirer, which reported on the change. Other companies, such as GE Aviation, Cintas, Kraft subsidiary Cadbury and Major League Baseball, have also blocked or limited access to bandwidth-sucking sites. The bandwidth constraint faced by Corporate America is unfolding nationwide at an unprecedented rate as websites and apps are embedding larger files and more employees bring their own devices — phones and tablets — to work. (April 3)

GOP senators ask FCC to relent on political ad rule

Six senators with strong links to the Tea Party movement want the Federal Communications Commission to nix a proposed rule that would make it easier for the public to know who pays for political ads and how much they cost.

The letter, which was sent to FCC Chairman Julius Genachowski, would require broadcasters to upload documents showing rates offered to political advertisers and records of who bought ads when, and for how much. Stations are already required to place this information in "public inspection files" that anyone can review in person. But the FCC rule change would require the information to be submitted online. The senators -- including frequent FCC critic Sen. Jim DeMint (R-SC) and Tea Party favorites Sens. Rand Paul (R-KY), Pat Toomey (R-PA), Roy Blunt (R-MO), Mike Lee (R-Utah) and John Boozman (R-AR) -- call the requirement to post the data online "excessive and unnecessary" when it is already available to anyone making an appointment. Citing "heavy compliance costs," they ask Genachowski to reconsider the proposal.

(April 6)

Lawmakers ask FCC to protect rural broadband from new rule

A bipartisan group of 44 representatives and 21 senators signed letters from each body to Federal Communications Commission Chairman Julius Genachowski asking the commission avoid proposed rule changes that could imperil the deployment of high speed Internet in rural areas.

The House's letter was circulated by Rep. Blaine Luetkemeyer (R-MO) and signed 43 members who represent mostly rural districts. Rep Luetkemeyer and colleagues reminded Chairman Genachowski that the increase in build-out of rural broadband has been "a major source of jobs." But unless the commission provides "more certainty to broadband providers" by avoiding a recently announced proposed rulemaking, it could harm both consumers and the rural economy.

(April 5)

T-Mobile accuses competitor Verizon of exaggerating need for more airwaves

T-Mobile questioned Verizon's need for more airwaves in a blog post and urged the Federal Communications Commission (FCC) to block the company's planned deal with a coalition of cable companies.

T-Mobile, the smallest of the four national carriers, accused Verizon of exaggerating its need for the additional airwaves. "These deals are anything but routine and, if granted, would unduly tip the scales in favor of the largest wireless carrier at a critical juncture in the mobile broadband industry," wrote Steve Sharkey, T-Mobile's vice president of government affairs. Verizon's analysis of spectrum efficiency is based on dividing its total number of subscribers by its nationwide average amount of spectrum. But Sharkey argued that because spectrum holdings can vary between markets, a nationwide average is "pointless." He said it is unfair for Verizon to include spectrum in T-Mobile's total that the company will acquire as a result of the breakup of its deal with AT&T because the FCC still has to approve that transfer. Sharkey also argued that the spectrum Verizon already has is superior to T-Mobile's spectrum. A majority of Verizon's spectrum is below 1 GHz, but all of T-Mobile's is above 1 GHz.

(April 4)

Sen Franken, consumer groups urge Obama to push for new online privacy rules

Sen. Al Franken (D-MN) and a host of public interest groups -- including the American Civil Liberties Union (ACLU), the Center for Digital Democracy and Consumer Watchdog -- urged the Obama Administration to fight for new measures to regulate how Web companies handle users' private data.

The groups, along with dozens of other organizations and companies, submitted comments to the National Telecommunications and Information Administration (NTIA), a Commerce Department agency that will lead discussions about how to better protect consumers' privacy online. The groups say voluntary guidelines won't be enough to protect privacy. Consumer Watchdog urged the Commerce Department to propose its own privacy legislation and push Congress to pass it. The ACLU said legislation should "remain the central focus" of privacy protections. (April 3)

Media Access Project to close its doors

The Media Access Project (MAP), a long-running public interest law firm that advocates for the free flow of information, will suspend operations on May 1.

The firm’s board of directors reached the decision after evaluating "the difficult funding environment facing MAP and other progressive public interest groups.” MAP was founded in 1973, and since then has played a role in almost every FCC proceeding on media ownership. The group helped to initiate proceedings to create low-power FM radio stations, and took part in the fight for an “open Internet,” often working alongside groups founded and staffed by MAP veterans. Groups that have worked alongside MAP were saddened by the news. MAP founder Andy Schwartzman said MAP was forced to close because it simply ran out of money. He said he’s proud of MAP’s 33-year history, and singled out two accomplishments of the group: a successful campaign to maintain the FCC’s more restrictive media ownership rules, and a court victory that lead to the creation of low-power FM community radio stations. "Community radio is really vibrant," Schwartzman said, with hundreds of stations now broadcasting and more on the way as a result of more licenses being issued by the FCC. Schwartzman said his “proudest achievement” is the network of MAP alumni that has remained in the media and telecommunications industries. "We have worked very hard to train people, and to make sure they stay in public interest," he said.

(April 3)

The Education of Google's Larry Page

Larry Page is surrounded. On one side, Google’s chief executive officer confronts Facebook, the social networking phenom that is about to go public. On his other side is Apple, which has moved the playing field off the desktop computer -- Google’s fiefdom -- and onto smartphones and tablets. Thus Page, who became CEO of Google a year ago, has the task of steering the company he co-founded through territory defined by two rivals while fending off accusations that his brainchild has become yet another lumbering monopolist or, worse, a follower. (April 4)

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