April 2013

INTERNET/BROADBAND

INTERNET FREEDOM BILL
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The House Communications and Technology Subcommittee approved a bill to support Internet freedom despite Democrats' concern that it could undermine existing laws and regulations. Rep. Greg Walden (R-OR), the subcommittee's chairman, insisted the measure is only a statement of policy and would not repeal any existing rules. "As a matter of law, a statement of policy does not impose statutorily mandated responsibilities on an agency," Chairman Walden said. The bill would make it formal U.S. policy to "promote a global Internet free from government control and to preserve and advance the successful multi-stakeholder model that governs the Internet." But the Democrats expressed concern that a person or company could use the law as a basis to sue to overturn regulations, such as the Federal Communications Commission's network neutrality rules, which require Internet providers to treat Web traffic equally. After assurances from Republicans that they would work to revise the bill before a full committee vote, Democrats agreed not to derail the markup with a slew of amendments. The subcommittee approved the bill on a voice vote, with the Democrats dissenting.
benton.org/node/149484 | Hill, The | House Commerce Committee
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GOGO CASS DISMISSED
[SOURCE: GigaOm, AUTHOR: Jeff John Roberts]
A federal judge threw out an anti-trust case brought by airlines passengers who accuse internet provider GoGo of illegally raising the price of in-flight service to rates as high as $17.95. In a decision issued in San Francisco, US District Judge Edward Chen ruled that GoGo, despite supplying 85% of all internet-equipped airplanes in the US, does not have a monopoly. The company’s customers include Alaska Airlines, American Airlines, Delta, US Airways, and Virgin America. In throwing out the case, Chen accepted GoGo’s argument that it doesn’t have dominant market share because it covers only 16% of all US airplanes, and it’s possible for the remaining planes, which do not offer Internet, to sign up with a competing service provider. The Internet contracts are sold on airplane-by-airplane basis, and not across entire airlines. The passengers sued GoGo in October, claiming that competitor Row44 charges only $5 for an entire flight of internet service but that airlines can’t drop GoGo because of ten-year contracts that lock them in. They also argue that GoGo’s internet technology is inferior because it relies on ground-to-air tower transmission rather than the satellite service offered by Row44 and Jet Blue’s ViaSat service.
benton.org/node/149451 | GigaOm
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THE GIGABIT FUTURE
[SOURCE: Washington Post, AUTHOR: Dominic Basulto]
The gigabit future is going to bring about an Internet that is at least three times faster than anything available today, and that could be good news for innovators everywhere. This goes well beyond being able to stream more movies, download more music and play more games. Technology innovators could fully realize entirely new uses for a faster Internet — ideas that are only in their infancy today, impacting areas ranging from health care and infrastructure to online learning. Faster Internet speeds create new opportunities for upstart companies to break up legacy business models in other industries. Take Aereo, for example, which is taking live television signals and delivering them over the Web, further blurring the line between traditional and Internet TV. Thanks to a bit of technological wizardry, the company is able to offer things you might expect from your cable company, such as the ability to record live TV for later viewing — all without a cable subscription or even a television. The whole TV-over-the-Internet concept works because members of what Nielsen Co. has dubbed the "Zero TV" generation think of shows as just another form of online video. It’s hard not to see how faster connectivity speeds would give new momentum to the “Zero TV” movement and open up new opportunities for gigabit broadband providers. The big caveat in a gigabit future, though, is that it’s expensive to build out all the necessary fiber connections.
benton.org/node/149449 | Washington Post
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CYBERSECURITY

CISPA PRIVACY CONCERNS
[SOURCE: Los Angeles Times, AUTHOR: Chris O'Brien]
The Obama Administration indicated it's not likely to support the Cyber Intelligence Sharing and Protection Act of 2013 (CISPA), a cybersecurity bill approved by the U.S. House Intelligence Committee this week. While stopping short of an outright veto threat that many privacy activists may have wanted, the statement made clear that the Administration does not believe the bill in its current form does enough to safeguard personal information. "We continue to believe that information sharing improvements are essential to effective legislation, but they must include privacy and civil liberties protections, reinforce the roles of civilian and intelligence agencies, and include targeted liability protections," Caitlin Hayden, a National Security Council spokeswoman, said in a statement. "We believe the adopted committee amendments reflect a good-faith effort to incorporate some of the Administration's important substantive concerns, but we do not believe these changes have addressed some outstanding fundamental priorities."
benton.org/node/149481 | Los Angeles Times
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TECHNET OK WITH CISPA
[SOURCE: The Hill, AUTHOR: Jennifer Martinez]
TechNet, a trade association that represents Google, Yahoo, Cisco and Oracle has come out in support of a controversial cybersecurity bill that is slated to be voted on in the House next week. In a letter sent to the leaders of the House Intelligence panel, TechNet CEO Rey Ramsey said the cybersecurity bill addresses the need for industry and government to be able to send and receive information about cyber threats to one another in real time. He also commended the Intelligence panel leaders for taking steps to address privacy concerns with their bill, the Cyber Intelligence Sharing and Protection Act (CISPA), but also said the trade group looked forward to continuing talks on "further privacy protections." Several high-profile tech executives sit on TechNet's executive council, including Yahoo CEO Marissa Mayer, Google Executive Chairman Eric Schmidt, Oracle President Safra Catz and venture capitalist John Doerr.
benton.org/node/149502 | Hill, The
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WIRELESS/SPECTRUM

FCC BUDGT AIDS WIRELESS BROADBAND
[SOURCE: Wall Street Journal, AUTHOR: Sarah Portlock]
Two programs funded under the 2014 budget show the Obama Administration is moving forward with plans to free up more airwaves for wireless broadband as Americans’ demand for wireless devices grows. Next year, the Federal Communications Commission plans to begin the process of auctioning television airwaves that have been voluntarily relinquished by station owners. The Administration’s 2014 budget allocates $500 million for broadcasters as they rework their infrastructure during that process. Wireless carriers are expected to be the major bidders at the auction, which hasn’t been scheduled yet, so they can provide customers with better service for smartphones, tablets and other devices. The budget also provides $7.5 million in funding for a spectrum-monitoring program at the National Telecommunications and Information Administration, which oversees spectrum used by federal agencies and is within the Commerce Department. Under the program, NTIA would study usage patterns in 10 major metropolitan areas. The goal, according to the budget document, is to find ways to potentially repurpose some of the airwaves currently used by government agencies or the military for commercial uses.
benton.org/node/149492 | Wall Street Journal
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OWNERSHIP

VERIZON WIRELESS IN LIMBO
[SOURCE: Financial Times, AUTHOR: Daniel Thomas, Anousha Sakoui, David Gelles, Vanessa Houlder]
The stalemate between Verizon and Vodafone and over the future of Verizon Wireless, their joint US venture has led to increasingly ambitious proposals, but none yet has established a solution for an intractable $40 billion tax problem. The considerable capital gains tax bill from the sale of the UK group’s 45 per cent stake in Verizon Wireless has led to talk of various indirect solutions, not least the suggestion that Verizon could instead buy Vodafone outright with US rival AT&T to carve out the business. While current plans have been denied by Verizon, the problem still remains how it can coax Vodafone into a deal for the biggest US wireless operator by subscribers knowing that the UK telecoms group would be saddled with a bill for as much as $40 billion, according to analyst estimates. Moreover the current “cellco structure” gives Vodafone tax-free, dollar denominated cash dividends from Verizon Wireless, that last year amounted to £2.4 billion making it more valuable in its present form than in a sale to Verizon, says Robin Bienenstock, analyst at Bernstein. She describes the tax hurdle as “insurmountable” unless Verizon is willing to pay a “prohibitively expensive 12 times ebitda or higher” price to cover these costs.
benton.org/node/149535 | Financial Times
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SINCLAIR BUYS FISHER
[SOURCE: TVNewsCheck, AUTHOR: ]
Sinclair Broadcast Group and Fisher Communications have entered into a definitive merger agreement whereby Sinclair will acquire Fisher in a merger transaction valued at approximately $373.3 million. Under the terms of the agreement, Fisher shareholders will receive $41 in cash for each share of Fisher common stock they own. The transaction represents a 44% premium to the closing price of Fisher common stock on Jan. 9, 2013, the final trading day prior to Fisher announcing a review of strategic alternatives. Fisher owns 20 television stations in eight markets, reaching 3.9% of U.S. TV households, and three radio stations in the Seattle market. Additionally, Fisher previously entered into an agreement to provide certain operating services for three TV stations, including two simulcasts, pending regulatory approval.
benton.org/node/149462 | TVNewsCheck | B&C
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SINCLAIR
[SOURCE: TVNewsCheck, AUTHOR: Price Colman]
Wells Fargo analyst Marci Ryvicker queried how much more Sinclair could grow, given that it now reaches about 34% of U.S. television households and the Federal Communications Commission caps coverage by a single station group at 39%. "How much more can you do in M&A?" Ryvicker asked. "We think we can do a lot more," David Smith, Sinclair president-CEO, responded. Smith noted that while the company's press release on the sale puts Sinclair's coverage of television households at roughly 34%, the actual number is less than 20%. The difference comes from the FCC counting UHF stations as having effectively half the coverage of VHF stations. UHF stations comprise much of Sinclair's holdings. Thus the lower actual coverage number, according to Smith. "We could double and still not be at 39 percent," he said.
benton.org/node/149510 | TVNewsCheck
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TELEVISION

FCC AND INDECENCY
[SOURCE: Variety, AUTHOR: Ted Johnson]
Just as he is about to exit, Federal Communications Commission Chairman Julius Genachowski is setting up a question that will be left to his successor: Just how should the agency deal with a backlog of indecency complaints. Given the propensity for watchdog groups to complain that the agency is too lax, and broadcasters to sue the FCC for being too vague, it’s doubtful that any new policy will be anything other than a can of worms. The FCC is facing two vacancies, and the opening of public comment on a new indecency policy is likely to only increase the pressure from parents orgs and politicians for President Obama’s nominees to commit to a zealous approach to objectionable content. A few of the comments to the FCC so far amplify the stations’ standpoint, that the networks shouldn’t be singled out, since so many media options proliferate.
benton.org/node/149530 | Variety
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ELECTIONS AND MEDIA

DISCLOSURE RULES
[SOURCE: Center for Public Integrity, AUTHOR: Michael Beckel]
Sen. Ted Cruz (R-TX) and a dozen of his Republican colleagues have asked the Federal Communications Commission to resist implementing new rules targeting the makers of political advertisements in the absence of Congress passing new disclosure legislation. “Political issues should be left to Congress," the senators wrote in a letter dated April 10. "If [the FCC] were to attempt to establish through rulemaking what Congress has declined to act upon, it would seriously undermine the integrity of the Commission and imperil its independence." The new letter, which was also signed by Senate Minority Leader Mitch McConnell (R-KY) calls the yet-to-be-passed DISCLOSE Act "one of the most politically charged, partisan issues in recent Congresses." It criticizes the legislation for raising "grave Constitutional concerns for speech protected by the First Amendment." The letter also admonishes the FCC not to become an arm of the Democratic Party.
benton.org/node/149446 | Center for Public Integrity
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ACCESSIBILITY

ACCESSIBILITY ORDER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has adopted an order that would give broadcasters two years to translate emergency crawls into audio for the blind and sight-impaired, and for cable operators to pass those along to their viewers as well. Some in the industry had sought a three-year phase-in, while accessibility advocates had wanted a year. The FCC split the difference. The FCC did not apply the mandate to over-the-top providers or TV Everywhere delivery of video content, but did issue a Notice of Further Proposed Rulemaking asking whether it should do so.
benton.org/node/149464 | Broadcasting&Cable | see the Order
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AGENDA

FCC MEETING AGENDA
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Federal Communications Commission will hold an Open Meeting on Thursday, April 18, 2013. The FCC will consider:
A Second Report and Order to streamline the foreign ownership policies and procedures that apply to common carrier radio licensees and certain aeronautical radio licensees under section 310(b) of the Act, significantly reducing regulatory burdens while ensuring the Commission continues to receive the necessary information to protect the public interest.
A Notice of Proposed Rulemaking and Notice of Inquiry on expanding direct access to telephone numbers to promote competition and innovation by IP-based providers, while protecting consumers and the reliability of phone calls. It will also consider an Order to allow a limited trial of direct access to numbers for VoIP providers.
In addition, the FCC’s Consumer & Governmental Affairs Bureau will provide a status report of participating carriers' compliance with CTIA's revision to its Code of Conduct for Wireless Service. CTIA member wireless carriers must provide their subscribers with four specified types of alerts to allow consumers to avoid unexpected charges for wireless usage exceeding their plan limits, and for additional charges for international roaming by April 17, 2013.
benton.org/node/149497 | Federal Communications Commission
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POLICYMAKERS

SUPPORT FOR WHEELER
[SOURCE: The Hill, AUTHOR: Brendan Sasso, Jennifer Martinez]
Former government officials and public interest advocates came out in support of nominating Tom Wheeler to chair the Federal Communications Commission (FCC) in a letter to President Barack Obama. The letter is an important vote of confidence in Wheeler, a front-runner for the job who has come under fire in recent weeks for his past career as an industry lobbyist. Professor Susan Crawford, a liberal favorite, signed the letter, along with attorney Andy Schwartzman and former officials including Phil Weiser, Sonal Shah, Phil Verveer, Larry Irving, Terry Kramer, Kevin Werback and Paul de Sa. They wrote that Wheeler "will have an open mind and an intelligent take on the challenges that will confront the new Chairman."
benton.org/node/149511 | Hill, The
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LOBBYING

JOE GREEN
[SOURCE: Los Angeles Times, AUTHOR: Jessica Guynn]
Joe Green, Mark Zuckerberg's Harvard roommate, is famous for having turned down an offer to move to Silicon Valley to join Facebook. Instead Green finished his college degree and worked for 2004 Democratic presidential nominee John Kerry, missing out on a once-in-a-lifetime payday. Now he's reuniting with his college pal on a project that straddles two worlds for which he has great affinity: technology and politics. Green, 29, is the founder and president of Fwd.us, a new political advocacy group funded by Zuckerberg and other prominent Silicon Valley executives to press for immigration reform and other technology industry causes. The group is the result of months of conversations between Zuckerberg and Green on how the technology industry can have a meaningful impact on the causes it cares about.
benton.org/node/149513 | Los Angeles Times
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TECH AND IMMIGRATION REFORM
[SOURCE: Washington Post, AUTHOR: Hayley Tsukayama]
Facebook chief executive Mark Zuckerberg launched a new organization, called Fwd.us, to advocate for immigration reform in the United States. The group has laid out its priorities for immigration reform: Secure the U.S. border; modify the guest worker program to increase the number of visas for skilled workers; develop a “simple and effective” system to verify employment; create a clear path for immigrants to become U.S. citizens; and reform the legal immigration system. Why do they care? Immigration reform is an issue near and dear to the tech industry, which has repeatedly complained that the current system restricts U.S. companies’ ability to recruit and retain high-quality engineering and programming talent. Tech industry groups have thrown support behind congressional legislation that would boost the number of H-1B visas — visas given to highly skilled workers — issued each year and that would grant permanent residency status to students who earn graduate degrees in science, technology, engineering and mathematics (STEM) fields.
benton.org/node/149468 | Washington Post
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ISSUES WITH FWD.US
[SOURCE: GigaOm, AUTHOR: Om Malik]
[Commentary] There is a disconnect in understanding the real world that exists beyond the browser or the mobile phone. We don’t do empathy and human interactions very well in the Valley, especially companies whose raison d’être is social and people. You know, like Facebook. The problem with Fwd.us is that many of those leaders live in a bubble that is of their own making and have little interaction with the real world. The fact is that any immigration reform needs to dovetail with the domestic reality of the 21st century America. In order to change the world and wanting new policies, there needs to be a deeper understanding of the world around us. Any immigration debate has to start with the education and re-education of the American workforce. With the coming connected age and continued proliferation of technology into our physical world, we are beginning to see disruption and massive displacement on a large scale. We don’t have the mechanisms in place to train people for this quantified society, where data looks to become the ultimate arbiter. How can we have any talk of immigration and a knowledge economy that doesn’t acknowledge that there is a silent desperation outside of Silicon Valley and New York and Washington, DC?
benton.org/node/149514 | GigaOm
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STORIES FROM ABROAD

GOOGLE SETTLEMENT OFFER
[SOURCE: Bloomberg, AUTHOR: Stephanie Bodoni, Sara Forden]
Google submitted a formal set of remedies to the European Union that will soon be shown to rivals and customers as part of settlement talks to end a two- year probe into claims its search results discriminate against competitors. The EU’s goal is to “secure legally binding commitments” from Google as part of the settlement negotiations, EU Competition Commissioner Joaquin Almunia told reporters in Washington. European users should have the “widest possible choice in search,” he said. A settlement would allow the Mountain View, California-based company to avoid possible fines for abusing its dominance. “Google has a lot more market power in Europe than in the U.S., more than 90 percent,” Almunia said. “To avoid abuse we need to guarantee that users of the search engine have a choice and that search results have the highest possible quality.”
benton.org/node/149459 | Bloomberg
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ATTACK ON OPEN SOURCE
[SOURCE: ars technica, AUTHOR: Timothy Lee]
[Commentary] Fairsearch -- an anti-Google group that counts Microsoft, Oracle, Nokia, and about a dozen other Google competitors as members -- filed a formal complaint with the European Commission about the search giant's "predatory distribution of Android at below cost." Apparently, Fairsearch believes that it's "predatory" for a company to gain market share by giving its software away for free. The argument should alarm anyone who benefits from free software—which is to say everyone who uses the Internet. Apparently, Fairsearch believes that it's "predatory" for a company to gain market share by giving its software away for free. That stance would have sweeping implications for the software industry because so many software companies distribute software for free. Competition laws are supposed to benefit consumers, not a company's competitors. It's easy to see how Microsoft and Nokia might have been harmed by Google's decision to price its mobile operating system at zero. But there's no reason to think the strategy is harmful to consumers. To the contrary, consumers benefit greatly from the low price and broad selection of Android handsets. And despite those low prices, Android faces competition from mobile operating systems made by Apple, Microsoft, Research in Motion, Mozilla, and others.
benton.org/node/149454 | Ars Technica
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GOOGLE SUED
[SOURCE: Bloomberg, AUTHOR: Lindsay Fortado]
Google was sued in London by a U.K. Internet company for promoting its own maps over those of competitors in what it claimed was “Google’s cynical manipulation of search results.” Streetmap, a provider of Internet maps, filed a complaint in London March 15, according to court records. Google’s actions have made its products “harder to find,” the U.K.-based company alleged. It’s at least the second such lawsuit filed against Google since June. Streetmap said its complaint mirrors an antitrust probe by the European Union into whether Google favors its own services over competitors in search results.
benton.org/node/149457 | Bloomberg
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SLIM AND MEXICAN TV
[SOURCE: Bloomberg, AUTHOR: Crayton Harrison]
Billionaire Carlos Slim is preparing an aggressive push into Mexico’s television market to take advantage of new telecommunications legislation, even as the changes threaten his dominance in the phone business. While Slim’s wireless carrier, America Movil SAB, is one of the chief targets of a bill to create more competition in Mexico, proposals to give consumers more options in cable and satellite TV will benefit the company, Chief Financial Officer Carlos Garcia-Moreno said last month. The bill is under Senate review after passing the lower house of Congress in March. The law offers Slim his best chance in years to get a license to offer pay-TV services over satellite and cable, said Pablo Vallejo, an analyst at Corporativo GBM SAB. Slim, the world’s richest person, is amassing media assets, including Mexican soccer teams and the rights to air the Olympics, to lure customers with exclusive programming.
benton.org/node/149524 | Bloomberg
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Analysis

April 2013

‘Free’ apps probed in UK over charging children

April 12, 2013 (Internet governance bill advances)

Why I have issues with Mark Zuckerberg’s FWD.us

Mark Zuckerberg's political wingman: Fwd.us founder Joe Green

Liberals, former officials back Wheeler for FCC chief

Sinclair Shows No Sign of Slowing Down

This App Is Expanding 311 To Create A Robust Community-Engagement Platform For Philadelphia

Tech group representing Google, Yahoo backs CISPA

If Netflix Were on TV, It Might Be the Biggest Network on Cable. But About That New Show …

MetroPCS’s Largest Shareholder Paulson Backs Sweetened Bid