April 2012

Maryland bans employers from asking for Facebook passwords

Maryland became the first state in the nation to ban employers from requesting access to the social media accounts of employees and job applicants. The state’s General Assembly passed legislation that would prohibit employers from requiring or seeking user names, passwords or any other means of accessing personal Internet sites such as Facebook as a condition of employment.

The bill has its genesis in a controversy that began when Maryland Corrections Officer Robert Collins returned to work following a leave of absence taken after the death of his mother. While completing a re-certification process needed to return to duty, Collins was asked for his personal Facebook password, ostensibly to check for known gang activity. He refused, and obtained the assistance of the Maryland chapter of the American Civil Liberties Union, which quickly filed a lawsuit, bringing the case onto the national stage.

Sen Grassley not satisfied with FCC documents, will keep hold on nominees

Sen. Chuck Grassley (R-Iowa) has no plans to lift his hold on President Obama's two nominees to the Federal Communications Commission (FCC) despite receiving a trove of the agency's documents, a spokeswoman for the senator said. She claimed that all of the documents had been previously released in response to a Freedom of Information Act request. "Therefore, Sen. Grassley’s hold on the FCC nominees will continue until the FCC demonstrates its commitment to comply with the House committee’s request and produce new, internal documents," the spokeswoman said. But an FCC official said the release does contain new, internal documents. "Thousands of pages submitted to the committee contain confidential information that is not in the public domain," the official said.

AT&T to sell most of Yellow Pages business to private equity firm Cerberus for $950 Million

AT&T agreed to sell a majority stake in its Yellow Pages business to the private-equity firm Cerberus Capital for $950 million. The sale is part of AT&T’s strategy to jettison shrinking parts of its business so it can focus on segments that are growing, particularly its wireless business.

Revenue from the Yellow Pages unit has shrunk 30 percent in two years, as consumers continue to shun phone books in favor of the Web. Phone books were once a cash cow, generating reliable profits as businesses paid for ads that were right under consumer’s finger tips as they were looking for local stores and services. Even with the steep revenue decline, AT&T’s Yellow Pages unit has been profitable before impairment charges for the last three years. Profitable but shrinking businesses generally sit poorly with public companies who want to show shareholders that they’re growing. Private-equity firms don’t have to please public shareholders and are happy to make money from dwindling assets. Sanford Bernstein analyst Craig Moffett said the sale price was low relative to Yellow Pages’ earnings, but the deal is still a sensible one for AT&T, in terms of its strategy.

ACA Seeks FCC Help to Encrypt Basic

The American Cable Association last week told the Federal Communications Commission that half of the respondents to an ACA poll said they would not encrypt basic service if it meant having to do so under the FCC's proposal. In discussions with FCC officials last week, Ross Lieberman, ACA VP of government affairs, brought along a survey of 107 members that indicated half of the operators currently operating digital systems or planning to convert would not be able to afford to encrypt under the FCC's proposal. ACA has argued in earlier filings that among the problems are the cost of boxes to smaller operators, who must provide free boxes to some households per FCC conditions.

TV Sets Are Connected to the Internet In 38% of Homes

Nearly two fifths (38%) of all households have at least one television set connected to the Internet, up from 30% last year, and 24% two years ago, according to a new study from Leichtman Research Group (LRG) reports.

The TVs could be sets with their own connection or could be connected via a video game system, a Blu-ray player, an Apple TV or Roku set-top box. These findings are based on a survey of 1,251 households nationwide that was primarily conducted in February of 2012 and are part of a new LRG study, "Emerging Video Services VI." In another sign of the growing importance of video games in delivering video into the homes, video game systems were the primary connection, with 28% of all households owning a video game system connected to the Internet. Just 4% of all households are connected solely via an Internet-enabled TV set, and Apple TV or Roku set-tops are the only connected devices in 1% of all households.

FCC Recertifies Boston to Regulate Comcast Rates

The Federal Communications Commission’s has recertified Boston to regulate basic rates of cable provider Comcast, a decision that comes only weeks before the National Cable & Telecommunications Association plans to hold its annual convention there.

But Comcast can stay that decision by seeking rate relief on alternate grounds, which it is expected to do. "Comcast faces real competition every day in Boston from DirecTV, Dish Network, and RCN," said the company in a statement. "With the amount of competition in the city, we expect to easily meet the so-called ‘Competing Provider' test, and we plan to refile as soon as possible as provided under the FCC Order. Importantly, Boston cannot re-regulate until the Commission acts on that filing. With the level of competition in the city, prices should be set by market forces, not by regulation." The city had petitioned the FCC to revoke its finding of effective competition made back in 2001, saying the situation had changed. The FCC agreed. It said that because overbuilder RCN passed less than a third 32.1% of the Boston market and had no plans to expand were decisive in determining that there was not effective competition from that overbuilder.

FCC Releases Tentative Agenda for April Open Meeting

Federal Communications Commission Chairman Julius Genachowski announced that the following items will be on the tentative agenda for the next open meeting scheduled for Friday, April 27, 2012:

Billing for Unauthorized Charges (“Cramming”) Report and Order and Further Notice of Proposed Rulemaking: The Commission will consider a Report and Order and Further Notice of Proposed Rulemaking that protects consumers by adopting and proposing additional rules to help consumers prevent and detect the unlawful and fraudulent placement of unauthorized charges on their telephone bills.
Noncommercial Educational Station Fundraising for Third-Party Non-Profit Organizations Notice of Proposed Rulemaking: The Commission will consider a Notice of Proposed Rulemaking inviting comment on whether to allow noncommercial educational broadcast stations to conduct on-air fundraising activities that interrupt regular programming for the benefit of third-party non-profit organizations.
Enhanced Disclosure Requirements for Television Stations Report and Order: The Commission will consider a Report and Order that increases transparency and improves public access to community-relevant information by moving the television broadcast station public file from paper to the internet.
Innovation in the Television Bands Report and Order: The Commission will consider a Report and Order establishing a regulatory framework for channel sharing among television licensees in connection with an incentive auction of spectrum.
Universal Service Fund Contributions Notice of Proposed Rulemaking: The Commission will consider a Further Notice of Proposed Rulemaking seeking comment on proposals to reform and modernize how Universal Service Fund contributions are assessed and recovered.

Google Plots Web Domain-Buying Spree

This week marks a major step toward a dramatically expanded internet, but only a few brands -- including Google and Deloitte -- say they'll take advantage of it.

On April 12, the Internet Corporation for Assigned Names and Numbers will stop accepting applications for a new round of generic top-level domains, or gTLDs, the part of a web address that appears to the right of the period ("com" and "org" are among 22 current top-level domains). The application process is expected to result in hundreds, if not thousands, of new gTLDs, which will likely start going live sometime next year. But of the major marketers contacted by Ad Age, only a few said they're planning to apply for new gTLDs. A few said they weren't planning on it. The majority refused to comment, mostly likely not wanting to tip off competitors to their intentions while the application window is still open. A Google spokesperson said the company will indeed apply for several top-level domains. "We plan to apply for Google's trademarked TLDs, as well as a handful of new ones," the spokeswoman said in an emailed statement. "We want to help make this a smooth experience for web users -- one that promotes innovation and competition on the internet." Google refused to provide more details, but it's likely that ".Google" and ".YouTube" will be among the trademark TLDs the company applies for.

T-Mobile, Leap Swap Spectrum

T-Mobile USA and Leap wireless plan on exchanging spectrum in several markets in the US to better improve the potential coverage. The spectrum swap also includes T-Mobile, Cool Inlet/VS GSM VII PCS, a joint venture in which T-Mobile has a non-controlling majority stake, as well as Savary Island Wireless, which Leap has a non-controlling majority stake in. By realigning their spectrum holdings, the carriers can build a network with better coverage, and potentially, better service. T-Mobile said the agreement would allow it to enhance its 4G user experience and modernize its network for future its planned LTE deployment.

The deal means Leap, which operates a prepaid wireless service under the Cricket brand, would get additional spectrum in Phoenix, Houston, Galveston, and Bryan College Station, Texas. Leap and Savary Island are also assigning T-Mobile and Cook spectrum in various markets in Alabama, Illinois, Missouri, Minnesota, and Wisconsin. T-Mobile, Leap, and Cook Inlet will also exchange spectrum within markets in Philadelphia, Wilmington (DE), Atlantic City, and other markets in Texas and New Mexico. Leap and Cook Inlet will swap spectrum between each other in Texas.

Twelfth Quarterly Status Report to Congress Regarding BTOP

The National Telecommunications and Information Administration sent Congress a quarterly report on the status of the Broadband Technology Opportunities Program (BTOP).

This report focuses on the program’s activities from October 1 to December 31, 2011. BTOP grant recipients collectively exceeded all performance goals established for FY11. Based on these positive results, NTIA established strong targets for FY12, taking into account progress made through FY11 and expected grant recipient performance through September 2012. Through December 2011, the Program has delivered significant progress in areas, such as new fiber-optic infrastructure construction, the opening of new PCCs, and thousands of new broadband subscribers now experiencing the benefits of the high-speed Internet service. Recipients’ quarterly progress reports, which were made public at the beginning of March 2012, provide a more granular depiction of these results.

BTOP recipients reached a significant milestone in late December 2011, surpassing $1 billion in total drawdowns. The first quarter of FY12 also featured a significant increase in overall project spending as BTOP recipients approached the midpoint of their period of performance. During the past quarter, recipients spent more than $415 million of Federal grant funds, matched by recipient funds of more than $145 million. Cumulatively, Federal outlays for the Program totaled $1.2 billion, while total recipient matching contributions exceeded $537 million. Federal outlays increased nearly 55 percent from the previous quarter, and matching funds contributed increased by more than 37 percent.

Benton

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