March 2013

TELECOM

FCC ACTS ON USTELECOM FORBEARANCE PETITION
[SOURCE: Federal Communications Commission, AUTHOR: ]
In this order, the Federal Communications Commission addresses portions of a petition for forbearance filed by the United States Telecom Association (USTelecom). The USTelecom Petition seeks forbearance from 17 different categories of FCC rules, which USTelecom argues are “legacy telecommunications regulations” that are unnecessary and outdated. The FCC address three of those categories here: Traffic Damage Claim Rules; Rules Governing Extension of Unsecured Credit for Interstate and Foreign Communications Services to Candidates for Federal Office; and Rules Governing Furnishing of Facilities to Foreign Governments for International Communications.
The FCC concludes that forbearance from these rules, in the limited circumstances discussed In this Order, furthers the Act’s and FCC’s goals of eliminating unnecessary and outdated legacy regulations that do not reflect today’s marketplace. USTelecom’s request regarding the remaining categories of rules is pending and under active consideration by the FCC, and will be addressed at
a later time.
benton.org/node/146677 | Federal Communications Commission | Commissioner McDowell | Commissioner Pai
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SERVICE TO ALL AMERICANS
[SOURCE: Public Knowledge, AUTHOR: Jodie Griffin]
[Commentary] The debate around the technological transition of our phone system to an IP-based network is now well underway at the Federal Communications Commission (FCC) and among state and local regulators across the country. Public Knowledge has argued that we must guide this transition according to five fundamental principles: service to all Americans, interconnection and competition, consumer protection, network reliability, and public safety. These principles lie at the heart of the reliability, efficiency, and consumer-friendly aspects of the phone network that we often take for granted. This post is going to focus on the first principle I listed: service to all Americans. First and foremost, the benefits of the phone network must reach all Americans – regardless of “race, color, religion, national origin, or sex.” In the U.S., we have long held to the conviction that the phone network should reach everyone. The U.S. can’t become the first industrialized nation to retreat from the goal of making basic voice service available to 100% of our population. Even if we haven’t met this goal yet, it is crucial that our actual goal continues to be complete coverage for everyone in the country.
benton.org/node/146676 | Public Knowledge
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AT&T’S PLAN
[SOURCE: Wired, AUTHOR: Derek Turner]
[Commentary] AT&T has a sneaky plan. It wants to exploit a loophole in the Federal Communications Commission (FCC)’s rules to kill what remains of the public telecommunications network — and all of the consumer protections that go with it. It’s the final step in AT&T’s decade-long effort to end all telecommunications regulation, and the simplicity of the plan highlights a dysfunction unique to the American regulatory system. AT&T and other big telecom carriers want to replace the portions of their networks that still use circuit-switching technology with equipment that uses Internet Protocol (IP) to route voice and data traffic. But because the FCC previously decided that it has no direct authority over communications networks that use IP, this otherwise routine technological upgrade could lead to a state of total deregulation. We are already living with the consequences of the FCC IP decision: an uncompetitive broadband market. Our broadband providers enjoy the kinds of high profit margins that would make a 19th-century robber baron blush. And our ability to use these networks to communicate openly and freely is under constant assault. Meanwhile, consumers in other countries not only have better access, but they pay far less for far better services. But there are large portions of the public telecom network that don’t use IP, and that are still subject to varying degrees of regulatory oversight — including traditional landlines, alarm circuits, and many of the “special access” connections that carry voice and data traffic from cellular towers.
benton.org/node/146674 | Wired
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WIRELESS/SPECTRUM

OPPOSITION TO T-MOBILE/METROPCS
[SOURCE: Wall Street Journal, AUTHOR: Thomas Gryta]
MetroPCS Communications Inc.'s largest shareholder, hedge fund Paulson & Co., plans to vote its 9.9% stake against the planned acquisition of the wireless carrier by Deutsche Telekom AG's T-Mobile USA. In a letter to the MetroPCS board, manager John Paulson argued the deal's structure is unfair to shareholders and that the company could get a more attractive alternative offer, but added that the fund could support a restructured deal. Paulson joins another hedge fund, P. Schoenfeld, which has reported a stake of about 2.3%, in opposing the deal. P. Schoenfeld has filed a proxy to solicit other investors to join its position, but it remains unclear if the opposition can get enough support to affect the deal. A MetroPCS spokesman said Thursday that the board continues to back the current offer. A spokesman for T-Mobile reiterated a prior statement by Deutsche Telekom that it is committed to the terms of the merger and "will enforce its rights under the definitive agreement with MetroPCS."
benton.org/node/146701 | Wall Street Journal
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FCC TO INVESTIGATE UNLOCKING PHONES
[SOURCE: Tech Crunch, AUTHOR: Gregory Ferenstein]
Following an online uproar over a law banning the unlocking of cell phones, the Federal Communications Commission will investigate whether the ban is harmful to economic competitiveness and if the executive branch has any authority to change the law. The “ban raises competition concerns; it raises innovation concerns,” said FCC Chairman Julius Genachowski. Chairman Genachowski isn’t sure what authority he has, but if he finds any, given the tone of the conversation, it’s likely he will exert his influence to reverse the decision. “It’s something that we will look at at the FCC to see if we can and should enable consumers to use unlocked phones.”
benton.org/node/146697 | Tech Crunch
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PRIVACY

DO-NOT-TRACK BILL
[SOURCE: US Senate Commerce Committee, AUTHOR: Press release]
Senate Commerce Committee Chairman John D. (Jay) Rockefeller IV (D-WV) and Senator Richard Blumenthal (D-CT) introduced the Do-Not-Track Online Act of 2013, which would give consumers the ability to control their personal information and allow them to prevent online companies from collecting and using that information for profit. “Online companies are collecting massive amounts of information, often without consumers’ knowledge or consent,” said Chairman Rockefeller. “Consumers should be empowered to make their own decision about whether their information can be tracked and used online. Industry stood at the White House and made a public pledge to honor do-not-track requests, but has since failed to live up to that commitment. My bill gives consumers the opportunity to simply say ‘no thank you’ to anyone and everyone collecting their online information. Period.” The bill would preserve the ability of online companies to conduct their business and continue to deliver content and services to consumers. The Do-Not-Track Online Act of 2013 would:
Create a universal legal obligation for all online companies to honor consumer choice when consumers do not want anyone to collect information about their online activities;
Allow the Federal Trade Commission to pursue enforcement action against any company that does not honor this request by consumers;
If consumers ask not to be tracked, allow companies to collect only the information that is necessary for the website or online service to function and be effective, but then place a legal obligation on the online company to destroy or anonymize the information once it is no longer needed.
benton.org/node/146671 | US Senate Commerce Committee | The Hill | NYTimes
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COLLECTION AND USE OF DATA RULES
[SOURCE: New York Times, AUTHOR: Steve Lohr]
A new report, “Unlocking the Value of Personal Data: From Collection to Usage,” from World Economic Forum’s Personal Data project argues:
Personal data is a valuable asset that ought to be put to work.
Fluid data markets will benefit economies, societies and individuals.
Privacy rules should focus on how data is used rather than on the widespread collection of personal data.
The modern digital world, with its explosion of data, has made the traditional approach to privacy based on “notice and consent” typically between two parties — a marketer and a consumer — obsolete, in the view of the report’s authors.
benton.org/node/146629 | New York Times
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CYBERSECURITY

WHITE HOUSE DELIBERATING ACTIONS TO RETALIATE
[SOURCE: The Hill, AUTHOR: Jennifer Martinez]
The White House is debating what actions will be taken to retaliate against individuals and countries that launch cyberattacks against the United States. White House Cybersecurity Coordinator Michael Daniel said officials might consider financial sanctions, visa restrictions and military action as tools to use against foreign hackers who target U.S. networks. However, the U.S. is still weighing when a cyber-incident will prompt a response from the federal government. "It's really a question that we're still debating and debating vigorously, and we need to debate within the government and as a society," Daniel said during a speech at the RSA cybersecurity conference. "What I can say is that once we decide a federal response is warranted though, there's still a broad spectrum of actions we could take." The State Department could also leverage its diplomatic powers to push countries to crack down on hacking activities from within their borders, Daniel said.
benton.org/node/146665 | Hill, The
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CHINESE UNIVERSITIES AND CYBER-SPYING
[SOURCE: USAToday, AUTHOR: Dan Vergano]
A burgeoning Chinese effort to build academic and civilian expertise in computer espionage has ties to the nation's military, the journal Science reports. In the past five years, China has opened 10 university computer security academies that specialize in cyber-research. Chinese universities publish computer espionage research in the open scientific literature — including one 2009 report "outlining how to mount an effective attack on the U.S. power grid." Such schools have hosted hiring fairs for People's Liberation Army units, which have been linked to hundreds of hacking successes against U.S. industries and government agencies recently by outside analysts.
benton.org/node/146663 | USAToday
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TELEVISION/RADIO

SPONSORED PROGRAMMING REQUIREMENTS
[SOURCE: Government Accountability Office, AUTHOR: Mark Goldstein]
The Federal Communications Commission is responsible for ensuring that the public knows when and by whom it is being persuaded. Requirements direct broadcasters to disclose when a group or individual has paid to broadcast commercial or political programming. Political advertising must also comply with requirements overseen by the Federal Election Commission. Recognition of sponsored programming has become increasingly difficult because of new technologies and increased access to sponsored programming such as video news releases. GAO (1) describes requirements for sponsorship identification and federal election disclaimers and stakeholders' views of the requirements and (2) assesses how and to what extent FCC and FEC address complaints. To conduct the work, GAO reviewed relevant laws, guidance, and enforcement procedures, and interviewed agency officials and stakeholders about enforcement processes and actions. The GAO recommends that the FCC should, among other things, update its sponsorship identification guidance and consider providing additional examples relevant to more modern issues and communicate the resolution of an investigation to the target of the investigation when a letter of inquiry has been sent, and develop goals for resolving all sponsorship identification cases within a specified time frame. [GAO-13-237]
benton.org/node/146614 | Government Accountability Office
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THE MEDIA HOUSE OF CARDS AND NETFLIX’S BIG DISRUPTION
[SOURCE: Fast Company, AUTHOR: Rick Liebling]
[Commentary] Right now we are witnessing firsthand the efforts of a disruptive company as Netflix looks to explode the way we watch quality scripted programming. On February 1st Netflix made available all 13 episodes of its new program, House of Cards and the resulting discussion amongst the media, and the consumption habits of Netflix subscribers, has been fascinating. Netflix CEO Reed Hastings has a vision for TV that ought to scare studio heads as much as Netflix’s first business--direct-by-mail DVDs--scared Blockbuster. So, what is Netflix’s plan for disruption? The streaming TV network wants to turn into the HBO of Internet TV and as media critic Michael Wolff notes: It has formally "broken channel power." There are in fact two entrenched systems that Netflix is looking to disrupt--first, the current prison of waiting. A week for a new episode, months (or years) for a new season. Reed Hastings, the CEO of Netflix, has a name for this prison and what it does to the people trapped inside it: managed dissatisfaction. Hastings is smashing this prison by allowing you to watch what you want, on whichever device you want, when you want, and crucially in whatever volume you want. Watch one episode a week or two or three or all 13. He’s also looking to give fans of HBO-type shows the thing they have been crying out for, a cord-cutting option. One of the big questions in the media industry is when and if we’ll be able to get HBO without having to pay for all the other dreck on cable. Netflix is trying to provide that option.
[Liebling is Creative Culturalist at Y&R New York. He advises clients on how to engage in culture in order to better understand consumer behavior.]
benton.org/node/146651 | Fast Company
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A LA CARTE CABLE
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran, William Launder]
What happens when the "bundle" begins to unravel? The question is taking on intense importance for the cable-TV business, which for decades has forced customers to subscribe to groups, or bundles, of channels—whether they wanted them or not. Now pay-TV executives—as well as its customers—are openly pondering a world where the bundle no longer reigns, even though such a scenario could be years away. "People should be able to build what they want and get what they want," said Bartees Cox, a spokesman for consumer group Public Knowledge. "Without the 'take it or leave it' requirements of bundled programming packages at a wholesale level, cable companies could tailor smaller and lower-priced packages that could offer flexibility and have great appeal to specific interests and audiences," said Charlie Schueler, spokesman for Cablevision. Giving consumers the right to pick and choose could be costly for the big entertainment companies. While some pay-TV executives say that full "a la carte'" could be overwhelming for viewers, others say that such an offering would be "the dream" but not practical, considering the reality of relationships with entertainment companies.
benton.org/node/146703 | Wall Street Journal
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CONTENT

COMCAST AND CONTENT PIRATES
[SOURCE: Multichannel News, AUTHOR: Todd Spangler]
Comcast will persistently nag subscribers suspected of illegally trading copyrighted material but -- unlike some other Internet service providers -- the cable operator says it will not throttle back connection speeds or block access to the Internet. Comcast and four other major U.S. broadband providers -- Time Warner Cable, AT&T, Verizon Communications and Cablevision Systems -- have begun alerting subscribers suspected of illegally sharing or downloading copyrighted content over peer-to-peer networks, under the media industry-led “six strikes” program. Comcast provided details of how it will carry out the Center for Copyright Information’s Copyright Alert System. In the first two instances, Comcast's Xfinity Internet users suspected of copyright infringement will receive “information-focused alerts” via both in-browser alerts and emails, Susan Jin Davis, Comcast Cable’s vice president of strategic services for communications and data services, wrote in a blog post. Alerts 3 and 4 will be more strongly worded “warning-focused alerts.” With the fifth suspected offense, Comcast will step up to “mitigation-focused alerts,” which will include a persistent in-browser alert that requires a customer to call the Comcast Security Assurance (CSA) team. Comcast will remove the persistent alert only after a user reviews information about copyright infringement; if subscribers who believe they have received alerts file for an independent review of the charges within 14 days of the fifth alert (which requires paying a $35 fee), Comcast will remove the in-browser alerts until the appeal is completed.
benton.org/node/146625 | Multichannel News
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OWNERSHIP

LIFT CROSS-OWNERSHIP BAN
[SOURCE: Crain’s Chicago Business, AUTHOR: Joe Cahill]
[Commentary] Newspapers may not be the radioactive investments they were a few years ago, but they're still not attracting droves of buyers. Still, regulators at the Federal Communications Commission insist on limiting the pool of potential newspaper acquirers. The FCC does this through the so-called “cross-ownership” ban that prohibits the owner of a broadcast television station from owning a newspaper in the same market. While the FCC is moving to loosen the ban, even the proposed revision will keep some major players from bidding for newspapers. This is a potential problem for Tribune Co., which confirmed that it's shopping its nine newspapers, including the Chicago Tribune. Recently released from Chapter 11, the company has decided to focus on its television properties, which include WGN-TV/Channel 9 here in Chicago. While a number of parties are said to be interested in the papers, one of the biggest potential buyers might have trouble completing a deal under the cross-ownership ban. News Corp.'s Rupert Murdoch, owner of Dow Jones & Co. and the Fox broadcasting network, would love to get his hands on the Tribune papers. But his ownership of the Fox outlet in Los Angeles might disqualify him as a purchaser of Tribune's Los Angeles Times. Some argue the cross-ownership ban promotes local news coverage and minority ownership of broadcast stations. They note that both have declined as the broadcast industry consolidated over the past quarter-century. If this is the goal, I don't see how it justifies limiting who can own a print newspaper. In fact, it can have the opposite effect on local news coverage by weakening the newspapers that provide so much of it. It's time for the cross-ownership ban to go the way of the teletype machine.
benton.org/node/146696 | Crain’s Chicago Business
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POLICYMAKERS

EDITH RAMIREZ TO HEAD FTC
[SOURCE: Politico, AUTHOR: Alex Byers, Tony Romm]
President Barack Obama intends to designate Edith Ramirez as chairwoman of the Federal Trade Commission. Ramirez, who joined the FTC as a commissioner in 2010, will replace the agency’s outgoing leader, Jon Leibowitz, a White House official told POLITICO. Her new role will still leave an opening for a third Democratic commission member. The source declined to specify when Commissioner Ramirez officially will be designated chairwoman or who the president might nominate for her current spot. Ultimately, that forthcoming selection would require Senate approval. While at the agency, Commissioner Ramirez has largely tracked closely with her fellow Democrats. Ramirez, for example, joined in FTC reports calling for Do Not Track technology, and she backed the majority conclusion of a two-year antitrust probe of Google — though the commissioner did raise questions about the form in which the FTC obtained some of its concessions. Commissioner Ramirez does boast notable political ties to the Obama administration. Back in 2008, she served as the campaign’s director of Latino outreach, and in 2012 Ramirez donated to the president’s reelection effort. Both Ramirez and the president worked together on the Harvard Law Review in the early 1990s.
benton.org/node/146631 | Politico | USAToday | Washington Post | The Hill | FTC
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STORIES FROM ABROAD

UK INTERNET USE
[SOURCE: Financial Times, AUTHOR: Norma Cohen]
More than two-thirds of British adults use the Internet every day, twice the proportion who did so just six years ago, with usage highest among the youngest age group. Figures from the Office for National Statistics show that 33 million adults accessed the Internet daily in 2012, up from 16 million in 2006. Use of the Internet for telephone or video calls has also risen much faster than expected, with 32 percent of adults using it for that purpose in 2012, four times the 8 percent rate forecast in 2007. Use of mobile devices to access the internet to access the Internet is also rising sharply, with 51 percent of adults using portable or hand-held devices, up from 24 percent just two years ago. These devices are most popular with the youngest adults – 87 percent of 16 to 24-year-olds reported they use a mobile phone or smart book for online access.
benton.org/node/146691 | Financial Times
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EUROPE’S TELCOS PRESS DEALS
[SOURCE: Wall Street Journal, AUTHOR: Sam Schechner, Frances Robinson]
Europe's largest telecommunications operators are in a standoff with antitrust officials over how to consolidate their hypercompetitive industry. At a conference this week in Barcelona, European officials met behind closed doors with a group of CEOs from companies including Vodafone Group, Deutsche Telekom AG, Telefónica SA and France Télécom. According to people who were present, the CEOs made their case for less regulation and more consolidation—particularly within individual countries. Operators argued in the meeting that Europe's fragmented market, a patchwork of 27 countries each with its own telecom regulator, has created an unsustainable situation of shrinking consumer prices and revenue even as usage of their networks skyrockets. They contend that without the creation of a single telecom market under a singular regulator with harmonized frequencies, Europe will increasingly lag behind other parts of the globe in modernizing its telecom infrastructure, and some companies could fail.
benton.org/node/146689 | Wall Street Journal
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BSKYB-TELEFONICA
[SOURCE: Financial Times, AUTHOR: Andrea Felsted, Miles Johnson]
British Sky Broadcasting is to acquire Telefónica UK’s broadband business for £180 million less than a month after rival Virgin Media was bought in a $23 billion deal. BSkyB, which is about 40 percent owned by Rupert Murdoch’s News Corp, said the purchase would make it the second-largest provider in the UK broadband market, building on its existing position as the UK’s fastest-growing broadband and telephony business. The purchase follows the acquisition of Virgin Media by John Malone’s Liberty Global last month in a cash and shares deal, marking the first entry into the UK cable market by the US group. As well as the £180 million price tag, another £20m may be payable depending on the successful delivery and completion of the customer migration process by Telefónica UK. The deal also includes 02’s fixed-line telephone business.
benton.org/node/146688 | Financial Times
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Daily Digest

Analysis

March 2013

The sequester will hurt tech nationally

Three reasons why ceiling for rights fees is nowhere in sight

Don’t Touch That Dial! Low-Power Radio Is About to Make FM Hot Again

You Don’t Want Super-High-Speed Internet, Says Time Warner Cable

Las Vegas says plans for Wi-Fi moving forward

As It Turns Out, Kids Get Copyright

How Can Luddite Adults Help Digital-Savvy Teens?

To battle Kindle, German booksellers partner with Deutsche Telekom on new e-reader

Weekly Digest

BTOP-BIP Brouhaha

March 1, 2013 (In Like a Lion)