June 2013

The DC Circuit Court of Appeals named the three judge panel that will hear Verizon's challenge to the Federal Communications Commission's network neutrality rules. The judges, who were selected randomly, are Clinton appointees Judith Rogers and David Tatel and Reagan appointee Laurence Silberman, a senior judge on the court. The oral argument is set for September 9.

Judge Tatel wrote the 2010 opinion which struck down the FCC's previous attempt to enforce the principle of net neutrality against Comcast. In that case, Judge Tatel warned that if the court accepted the FCC's arguments, "it would virtually free the Commission from its congressional tether." "I'd say that bodes rather ill for the FCC," said Berin Szoka, president of the libertarian think tank TechFreedom and an opponent of the rules. But Andy Schwartzman, a media lawyer who favors the rules, said the panel is "pretty good" for the FCC. He admitted that Judge Tatel had some "harsh words" for the FCC in the Comcast decision, but he said the judge left room for the agency to try a different legal approach. Schwartzman argued that all three judges are likely to follow a recent Supreme Court decision in City of Arlington v. FCC, which held that courts should defer to regulatory agencies when the law is ambiguous. "All three of them are of a mindset that is likely to give deference to the government," Schwartzman said. "I could compose a number of panels that would be much less favorable to the commission." He said that Judge Silberman, while a conservative, is a "straight shooter" and a relative moderate on the court.

The Federal Communications Commission announced authorization to release additional funds from the $300 million Mobility Fund Phase I auction, which is designed to support the build out of 3G and 4G networks in rural markets.

T-Mobile won approximately $23 million in funding and U.S. Cellular received approximately $34.5 million. One third of this funding was authorized for release by the FCC from the Universal Service Fund. The mobility auction, which was a reverse auction, pegged $300 million in funding for wireless network construction in both 3G and 4G variants. The reverse auction awarded funding to the carrier that offered to do the build-out with the smallest level of monetary support. This recent FCC action also awarded $1.8 million to Hardy Cellular of West Virginia and $1.4 million to Powertel/Memphis Inc. Winning bidders had to provide the FCC with a “letter of credit (LOC) and Bankruptcy Code opinion letter from [their] legal counsel,” to gain access to the funding. Construction of 3G networks must be complete within a two year window, with 4G networks gaining one additional year for a total of three to complete.

In an ongoing effort to ensure that its guidance for online advertisers stays current with changes in digital media, the Federal Trade Commission’s consumer protection staff sent letters to search engine companies to update guidance published in 2002 on distinguishing paid search results and other forms of advertising from natural search results.

The letters note that in recent years, paid search results have become less distinguishable as advertising, and the FTC is urging the search industry to make sure the distinction is clear. The letters are the latest example of the FTC’s work to update its guidance for digital advertisers, which also includes recent updates to the Dot Com Disclosures and Endorsements and Testimonials Guides. The letters also respond to requests from industry and consumer organizations to update the 2002 guidance. According to both the FTC staff’s original search engine guidance and the updated guidance, failing to clearly and prominently distinguish advertising from natural search results could be a deceptive practice. The updated guidance emphasizes the need for visual cues, labels, or other techniques to effectively distinguish advertisements, in order to avoid misleading consumers, and it makes recommendations for ensuring that disclosures commonly used to identify advertising are noticeable and understandable to consumers. The letters note that the principles of the original guidance still apply, even as search and the business of search continue to evolve. The letters observe that social media, mobile apps, voice assistants on mobile devices, and specialized search results that are integrated into general search results offer consumers new ways of getting information. The guidance advises that regardless of the precise form that search takes now or in the future, paid search results and other forms of advertising should be clearly distinguishable from natural search results.

The updated guidance has been sent to the general-purpose search engines AOL, Ask.com, Bing, Blekko, DuckDuckGo, Google, and Yahoo!, as well as 17 of the most heavily trafficked search engines that specialize in the areas of shopping, travel, and local business, and that display advertisements to consumers.

Apparently, the Wall Street Journal and Dow Jones Newswires are set to undergo "a limited restructuring" effort that will result in the creation of new positions and the elimination of others through buyouts.

"The animating idea behind integration has always been a cohesive news organization, one that eliminates duplication and better deploys our joint reporting and editing resources to areas of coverage where we can have most impact," Gerard Baker, the Editor-in-Chief of Dow Jones and Managing Editor of The Wall Street Journal, wrote. "This week, we will begin putting more editorial heft behind this strategy... We will post at least a dozen new positions immediately, and more jobs will be posted in weeks and months to come. At the same time, and in the process of integrating our resources, we will be undertaking a limited restructuring around the world that will result in some consolidation of positions. And as the end of the fiscal year approaches, as is usual practice, some of our colleagues are taking buyout packages."