October 2013

AGENDA

NOW THAT UNCLE SAM IS BACK, WHAT'S NEXT FOR THE FCC, FTC?
[SOURCE: AdWeek, AUTHOR: Katy Bachman]
Within minutes of President Barack Obama signing the deal that reopens the government through Jan. 15 and raises the debt ceiling to Feb. 7, the Federal Communications Commission's website came back online. The Federal Trade Commission took a little longer to get back up to speed. Its website came back online around 9:15 a.m. So what's next? For a while longer, the FCC and FTC will chug along and tackle the backlogs that mounted up during the 16- day shutdown with less than five commissioners. The FCC was already forced to postpone its Oct. 22 monthly meeting because of the shutdown. There is also plenty of fretting that the auction of wireless spectrum could also suffer a delay, pushing it to 2015. With less time to prepare, many wonder if the FTC will decide to delay upcoming workshops on the Internet of things (Nov. 19) and native advertising (Dec. 4), a new issue for the agency. Now more than ever, the advertising lobby will need to keep up the work to preserve the advertising tax deduction. The next big date is Dec. 13 when the Congressional negotiating committee is supposed to issue budget recommendations for funding the government beyond Jan. 15.
benton.org/node/162604 | AdWeek
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FCC SUSPENDS FILING DEADLINES THROUGH OCT. 21
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has reopened for business, including its website, which was shuttered during the government deadline. However, it has suspended all filing deadlines other than network outage reports until further notice. The FCC signaled before the shutdown that those filings would be due the business day after the government re-opened, which would have been Oct. 18. The FCC also noted that it would offer further guidance "soon" but recommended that nobody file any submissions seeking additional relief until then.
benton.org/node/162602 | Broadcasting&Cable
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POLICYMAKERS

TED CRUZ BLOCKS OBAMA'S FCC NOMINEE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Sen. Ted Cruz (R-TX) is blocking the confirmation of Tom Wheeler, President Barack Obama's nominee for chairman of the Federal Communications Commission. A spokesman for Sen. Cruz said the senator has placed a hold on the nomination until Wheeler clarifies whether he would require more disclosure about the donors behind political TV ads. "The senator is holding the nominee until he gets answers to his questions regarding Wheeler’s views on whether the FCC has the authority or intent to implement the requirements of the failed Congressional DISCLOSE Act," said Sean Rushton, a spokesman for Sen. Cruz. FCC regulations require TV broadcasters and cable providers to identify the "true sponsor" of all ads. Some Democrats, including House Minority Leader Nancy Pelosi (D-CA) and Sen. Bill Nelson (D-FL), have urged the FCC to use that power to require that political groups advertising on TV reveal their major donors. But Sen. Cruz argues the Democrats are trying to use the FCC to implement the goals of the Disclose Act -- which would have required political groups to reveal more information about their donors. He and other Republicans claim the bill would have chilled political speech.
benton.org/node/162711 | Hill, The
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INTERNET/BROADBAND

GOOGLE FIBER NOW DELAYING PLANNED DEPLOYMENT IN OVERLAND PARK
[SOURCE: eWeek, AUTHOR: Todd Weiss]
Google Fiber Gigabit Internet and cable television service in Overland Park (KS) has now been put on hold indefinitely by Google, a month after city leaders on Sept. 16 delayed an imminent contract agreement and raised a last-minute liability concern with the pending deal. At the city's council meeting on Oct. 15, two local attorneys working with Google told the city's leaders that the company was now putting a hold on its plans for Google Fiber in the area and asked the city to approve a continuance for the existing proposal. No Google Fiber representatives attended the meeting. Rob Walch, an Overland Park resident who attended both council meetings said he doesn't blame Google for the dispute, which he said was raised at the last minute in September by the city's leaders after some nine months of negotiations between the parties. "Overland Park made it really, really hard for Google, and Google has a lot of other cities and towns to work with. Google had to make an example of somebody. Clearly, Google wanted to and did deliver a strong message to Overland Park and all other cities tonight." The apparent demise of the Google Fiber plans for the city, at least for now, is a painful loss for residents and businesses, said Walch. "Overland Park will be surrounded by cities [that have] Google Fiber, and this could hurt economically for a long time," he said.
benton.org/node/162672 | eWeek
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TELECOM

GEORGIA’S ANTI-’OBAMAPHONE’ RULE JUST HURTS POOR PEOPLE
[SOURCE: Washington Post, AUTHOR: Brian Fung]
[Commentary] The controversy over what critics have derisively called the "Obamaphone" program is back. In an attempt to take on fraudulent subscribers in the nation's Lifeline program — a service dating to the Reagan administration that gives poor people access to government-subsidized phone lines — Georgia plans to start charging low-income Americans $5 a month for the privilege of getting what residents of other states get for free. The new rule could wind up punishing more poor people than criminals. Georgia's state public services commissioner, Doug Everett, justifies the rule by saying that there are more free phones floating about in his state than there are people who are eligible for the Lifeline program. According to his estimates, there were at one point roughly a million Lifeline phones active in Georgia, representing more than one phone per qualifying American. "A hundred and twenty-five percent of the total number of poor people had Lifeline phones," Everett said. Later, he suggested that up to 50 percent of phones distributed under the program may have been fraudulent. Running the numbers another way, however, yields slightly different results. The eligibility cutoff for Lifeline is 135 percent of the federal poverty line. That description fits nearly 30 percent of Georgia's population. As of the 2010 Census, Georgia had 9.7 million residents, meaning just under 3 million may have been eligible for an Obamaphone. For Everett's math to stand up, the number of eligible poor in Georgia would have to have been around 880,000 -- or 733,000 according to Everett's 50-percent estimate. It seems like the program is charging a majority of low-income residents what they already can't afford -- just to catch a minority of cheaters.
benton.org/node/162716 | Washington Post
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WHY YOUR PHONE BILL KEEPS INCREASING -- AND THE INFORMATION YOU NEED TO STOP THE BLEEDING
[SOURCE: Forbes, AUTHOR: Elise Ackerman]
You may be under the impression that the relationship between the telecommunications industry and its regulators is tough-minded and adversarial. The truth, however, is the relationship between the regulators and the regulated can sometimes get downright cozy. There’s empathy. Understanding. And a soft-hearted desire to lend a helping hand when a corporate behemoth hits a rocky patch by increasing prices on consumers and businesses. To see how this works, let’s look at the relationship between Verizon’s New York subsidiary and the New York State Public Service Commission. There’s a long and mind-numbing history of Verizon requesting and receiving rate increases. You might have expected state regulators to deny Verizon’s tariff revision request with the Federal Communications Commission in July 2006. Instead, the commission offered a compromise. In order to justify allowing a ten-percent rate increase for services to businesses, the commission cited Verizon’s reportedly precarious financial health. The practice of relying on Verizon’s assertions about the critical condition of its New York business to justify rate increases for both residential and business customers would become a hallmark of the commission’s response to a stream of Verizon requests to increase its charges. An investigation into the circumstances surrounding the deterioration of Fire Island’s phone system after Hurricane Sandy could cause real problems for Verizon. In a filing with the commission, public interest groups in New York assert that Verizon was contriving to transfer customers from the wireline to the wireless division by asking the New York Public Service Commission to provide terms under which the company could discontinue landline service to the resort community, when the company proposed to replace the copper wireline with a wireless service called Voice Link. Bruce Kushnick, Executive Director of New Networks, an advocacy group that has just published a new report on the issues of cross subsidies between Verizon’s wireline and wireless businesses, said Verizon could do more to counter the civic groups’ allegations of “systematic and long-term diversion of monies needed for copper system maintenance to the FIOS system” by releasing the data of its expenditures for wireline maintenance and records that showed the source of funding for wireless network buildouts. “But Verizon isn’t going to release the data,” Kushnick predicted. “My feeling is if we had this data, it could lead to a divestiture”—the wireline company would separate from the wireless company once and for all. For the public, a divestiture could put the kibosh on rate increases and lead to lower bills overall. But the chances of that happening, realistically, seem slim.
benton.org/node/162688 | Forbes
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VERIZON RILES BOSTON MAYOR WITH FIOS COMMERCIAL AS IT HUNTS REGULATORY RELIEF IN MASS.
[SOURCE: Fierce, AUTHOR: Jim Barthold]
Verizon wants Massachusetts lawmakers to see it as a tech company with a phone service, but it might have a hard time proving its case thanks to a commercial that touts its biggest technology play, FiOS, in a city where it's unavailable, Boston. In a commercial titled, "Here's the Truth about FiOS in Massachusetts," Boston native Donnie Wahlberg stands before landmarks like the Hancock Tower and Trinity Church and touts the benefits of the high-speed Internet and TV service. The problem, according to a story in the Boston Globe, is that "you can't get (FiOS) anywhere in Boston." The ad's timing isn't the best as the carrier lobbies the commonwealth's energy and telecommunications committee to ease up on laws and regulations designed in the monopoly era that apply only to Verizon. Bill 411 would remove restrictions that are specific to Verizon in areas where there is competition from companies such as Comcast. Verizon's hope is that when lawmakers discuss it, they'll remove "a series of state laws and regulations that apply only to Verizon for the vast majority of cities and towns in the state," a story in the Boston Business Journal explained, adding that there are about 36 towns in the commonwealth that have no cable voice service and even fewer with no cell phone service. All of these are in rural central and western parts of the commonwealth.
benton.org/node/162670 | Fierce
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OWNERSHIP

SHAMMO: VERIZON WIRELESS JOINT INNOVATION VENTURE WITH COMCAST, TWC 'HAS BEEN TERMINATED'
[SOURCE: Fierce, AUTHOR: Steve Donohue]
The joint innovation venture that Verizon Wireless launched with Comcast, Time Warner Cable and Bright House Networks after agreeing to buy spectrum from the cable companies in December 2011 "has been terminated," Verizon CFO Fran Shammo said. While Shammo said Verizon still has joint marketing deals with the major cable companies, the companies aren't working together to develop new products that would take advantage of the Verizon Wireless network and devices as well as cable programming. "We're moving in our separate ways on that," Shammo said. The joint innovation lab, which was tied to the $3.6 billion spectrum deal Verizon Wireless and the major cable companies announced in December 2011, had sparked a backlash from consumer groups who complained that it would reduce competition among Verizon, Comcast, TWC and Bright House. Shammo suggested that the decision to terminate the joint innovation venture was related to Verizon's recent agreement to buy Vodafone's 50 percent stake in Verizon Wireless for $130 billion. Going forward, Verizon will focus on "bringing to the customer the best products available between wireline and wireless," Shammo said.
benton.org/node/162668 | Fierce | WSJ
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FAILURE OF VERIZON’S CABLE PARTNERSHIP KILLS SECRETIVE NUON CONTENT-SHARING PROJECT
[SOURCE: GigaOm, AUTHOR: Janko Roettgers]
Verizon’s decision to terminate a joint venture with Comcast and other cable companies puts the end to an ambitious project dubbed NUON that included online components as well as dedicated streaming hardware. Part of the concept was simply to cross-promote services to subscribers, with NUON offering exclusive content to cable subscribers who would link their cable account to their Verizon account, and vice versa. But NUON apparently also involved dedicated hardware. Its boxes were meant to help consumers share content across devices and services. There were also plans to allow subscribers of other cable TV providers, including Time Warner Cable, Cox and Verizon’s own FIOS service, to access the service, but it looks like Comcast may have been Verizon’s strongest partner in this joint-venture effort. Verizon spokesperson said in a statement that all work performed under the NUON brand was confidential. “Since none of the services were ready for launch, we cannot discuss them,” the spokesperson said.
benton.org/node/162697 | GigaOm
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CHILDREN AND MEDIA

FACEBOOK MOVE DRAWS FIRE
[SOURCE: Wall Street Journal, AUTHOR: Reed Albergotti]
Facebook’s move to let teenagers share items more widely reflects growing competition among social networks for the attention of teens -- and the advertisers that want to reach them. Analysts said Facebook risks losing the next generation of young users if it doesn't keep pace with competitors. But some privacy advocates are more concerned about public posts on Facebook than on other sites because of its vast reach. It has 1.2 billion users world-wide, roughly five times as many as Twitter. Facebook also allows users to post a wider range of media and to comment more broadly than Twitter does. "This is about monetizing kids and teens," said James Steyer, founder and chief executive of Common Sense Media, a nonprofit devoted to online privacy.
benton.org/node/162737 | Wall Street Journal
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SEN MARKEY CONCERNED ABOUT NEW FACEBOOK POLICY FOR TEENS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen. Ed Markey (D-MA) is concerned about Facebook's new privacy policy change on teen users. Facebook advertised its decision to allow teens 13-17 to start sharing their info publicly and to have their posts followed on news feeds as giving them the same choices as other social media sites. Facebook said teens were among the "savviest" users of social media. "While I am pleased that the new initial privacy choice for Facebook's teen users offers more protection than the previous default setting, the addition of an option to share all information publicly raises serious concerns for a vulnerable and impressionable age group that deserves additional safeguards," Sen Markey said. "Children and young teens are especially vulnerable to the dangers that may lurk in the online environment. Now is the time we put children's privacy laws on the books, including an 'eraser button' tool for parents and children so that what kids say online does not come back to haunt them when they apply for college or jobs." Sen. Markey has been seeking more online privacy protections for teens along the lines of Children's Online Privacy Protection Act (COPPA) protections for kids 12 and under -- he was one of the driving forces behind that law.
benton.org/node/162682 | Broadcasting&Cable
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WHY FACEBOOK WANTS TEENS TO GO PUBLIC
[SOURCE: American Public Media, AUTHOR: David Weinberg]
Before today, Facebook users under 18 could only share their posts with friends or friends of friends. But not anymore. For all of our teenage readers, you now have the option of making your posts public -- including to a whole bunch of companies who are dying to sell you stuff. Facebook hopes the policy change can lure teens back to the social networking site, who are heading to other social media outlets. One reason for the exodus: Everyone and their mom has a Facebook account. Posting something your whole family can see isn't ideal for some teens. And there lies a conundrum, teens want privacy on one hand, but they also want to be heard, according to Jay Baer, author of "Youtility: Why Smart Marketing is About Help Not Hype." The problem with Facebook's old privacy policy was that teens could only get likes and comments from friends and friends of friends. "It's much more interesting, certainly for my children and other teens, when they get likes and shares and comments and interactions from people that they don't know," says Baer. It's those strangers interacting with teens on Facebook that worry Dr. Wendy Patrick, a business ethics lecturer and sex crimes prosecutor. "Everything from cyber bullies, to cyber stalkers, to cyber predators can now view personal information of teenagers," Patrick says. She worries that the privacy changes could make teenagers more vulnerable on the web. But for Facebook, the privacy changes could produce a flood of data for marketers looking to get a share of teen spending, which according to the research firm TRU is worth more than $800 billion worldwide.
benton.org/node/162690 | American Public Media
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LABOR

SILICON VALLEY INEQUALITY
[SOURCE: InfoWorld, AUTHOR: Caroline Craig]
Silicon Valley is an economic bubble where the competition to hire in-demand engineers is greatly inflating some pay packages. However, the high salaries awarded to many in the tech industry comes at the price of worsening inequality in the Bay Area. Silicon Valley -- home to tech giants Apple, Twitter, Google, and Facebook, as well as venture-capital-funded tech startups -- is awash with cash. A recent report from the Bureau of Labor Statistics confirmed that Silicon Valley employees are among the highest paid in the country, with the average worker in San Mateo County earning $3,240 per week -- more than three times the national average, and $1,100 more per week than the average employee in Manhattan. By comparison, the average salary for all professions in the Bay Area is $66,070, according to the Bureau of Labor Statistics.
benton.org/node/162733 | InfoWorld
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JOURNALISM

WHAT WE KNOW (AND DON’T) ABOUT EBAY FOUNDER PIERRE OMIDYAR’S AMBITIOUS NEW MEDIA STARTUP
[SOURCE: GigaOm, AUTHOR: Laura Hazard Owen]
It was leaked that star Guardian reporter Glenn Greenwald, who broke the news on the National Security Agency scandals, is leaving the paper for what he described as “a once-in-a-career dream journalistic opportunity that no journalist could possibly decline.” It was soon revealed that the backer of that opportunity is billionaire eBay founder Pierre Omidyar. So what’s the new venture going to look like? Here’s what we know so far: It’s totally digital, no print component, New York University journalism professor Jay Rosen reported. Omidyar is willing to pump a lot of money into it. Also on board so far: Filmmaker Laura Poitras and The Nation journalist Jeremy Scahill. The site won’t just focus on surveillance and security, though. It will be a general news site. And a few things we don’t know: The site’s name, though apparently it has one already, and the site’s business model (beyond Omidyar’s millions).
benton.org/node/162590 | GigaOm
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GOVERNMENT PERFORMANCE

MORE HEALTH WEBSITE WOES
[SOURCE: Wall Street Journal, AUTHOR: Christopher Weaver, Louise Radnofsky]
Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified. Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans. The flaws could do lasting damage to the law if customers are deterred from signing up or mistakenly believe they have obtained coverage.
benton.org/node/162739 | Wall Street Journal
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THE BUDGET

PEOPLE IN SILICON VALLEY YAWNED AT THE SHUTDOWN. THEY SHOULDN’T HAVE.
[SOURCE: Washington Post, AUTHOR: Timothy Lee]
"If companies shut down, the stock market would collapse," venture capitalist Chamath Palihapitiya said in a recent podcast with Jason Calacanis. "If the government shuts down, nothing happens and we all move on, because it just doesn't matter. Stasis in the government is actually good for all of us." This view is surprisingly common, especially in Silicon Valley. But it's wrong: Washington's growing dysfunction is a big problem for everyone, even high-flying technology companies. It's true, of course, that Washington isn't a major source of new innovations the way the San Francisco Bay Area is. It never has been and probably never will be. But what governments provide are stable, predictable platforms on which innovative companies can build. But we've now gone way beyond the point when gridlock in Congress can be beneficial in fostering democratic deliberation. Now it’s not just preventing the government from making disruptive changes, it's actually becoming a source of disruption in its own right. Shutdowns, poorly-targeted spending cuts, and filibusters are preventing the government from performing basic services that they've performed without difficulty for decades.
benton.org/node/162600 | Washington Post
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STORIES FROM ABROAD

PRIVACY GROUPS PUSH FOR STRONGEST EUROPEAN DATA PROTECTION LAW POSSIBLE
[SOURCE: The Hill, AUTHOR: Kate Tummarello]
[Commentary] Europe needs a strong data protection law after this year’s revelations about US surveillance, 23 privacy groups said in a letter to members of the European Parliament. The groups -- including the American Civil Liberties Union, the Electronic Privacy Information Center and Consumer Watchdog -- asked Parliament members “to adopt the strongest measures possible” in the data protection law currently being worked on in Europe. “Congress has so far failed to take necessary steps to update US privacy law or to rein in” those surveillance activities, they wrote. “As a consequence, consumers on both sides of the Atlantic remain at risk -- our most sensitive data is too readily available for scrutiny and misuse.” The groups were also critical of US privacy initiatives, including multi-stakeholder efforts and self-regulation programs. These initiatives -- such as voluntary programs to let users opt out of online tracking -- are often cited as one solution to addressing privacy concerns in lieu of legislation.
benton.org/node/162710 | Hill, The
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ANTITRUST: COMMISSION CONSULTS ON COMMITMENTS OFFERED BY SAMSUNG ELECTRONICS REGARDING USE OF STANDARD ESSENTIAL PATENTS
[SOURCE: European Commission, AUTHOR: Press Release]
The European Commission invites comments from interested parties on commitments offered by Samsung Electronics in relation to the enforcement of the standard essential patents (SEPs) it owns in the field of mobile communications. The Commission has concerns that Samsung’s seeking of injunctions against Apple in the European Economic Area (EEA) on the basis of its mobile SEPs may have amounted to an abuse of a dominant position prohibited by EU antitrust rules. To remedy these concerns, Samsung has offered to abstain from seeking injunctions for mobile SEPs for a period of five years against any company that agrees to a particular licensing framework. Interested parties can now submit their comments within one month. If the Commission concludes, in light of the comments received, that the commitments address the competition concerns, it may decide to make them legally binding on Samsung.
benton.org/node/162583 | European Commission
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WHY SAMSUNG’S EU ANTITRUST SETTLEMENT PROPOSAL STINKS
[SOURCE: GigaOm, AUTHOR: David Meyer]
[Commentary] Europe’s antitrust chief said that Samsung had submitted proposals for settling its patent-related antitrust case, and now the European Commission has published them for a one-month public consultation. In a nutshell, Samsung has proposed not abusing its so-called standards-essential patents (SEPs) in the mobile arena for the next five years. The big problem with Samsung’s settlement proposal is its five-year term. Now, this length of term is hardly unprecedented when it comes to antitrust settlements; for instance, the Microsoft’s browser-bundling anti-trust case in 2009. But the SEPs affair is quite different. It is not a matter of giving competitors their chance to shine; it is about letting those competitors play in the mobile space in the first place. And it’s not a situation that will fundamentally change in five years’ time. When Google settled with the US Federal Trade Commission (FTC) earlier in 2013 over its own SEPs antitrust case, the FTC didn’t say it would be OK for Google to go back to breaking its commitments after a set period of time. The European Commission should take a similarly long-sighted view, at least adding a proviso that would allow it to swiftly reinstate a harness on Samsung if it goes back to its bad old ways. The question there is which forum will suffice -- the International Telecommunications Union (ITU) has been moaning about SEPs abuse for ages, though it doesn’t really have the teeth to do something about it – but either way, someone needs to define what fair and reasonable really means, for once and for all. Nobody benefits from this mess but patent lawyers.
benton.org/node/162582 | GigaOm
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EUROPE TO PROTECT DATA
[SOURCE: New York Times, AUTHOR: James Kanter]
Lawmakers in Brussels have introduced a measure in the European Parliament that could require American companies like Google and Yahoo to seek clearance from European officials before complying with United States warrants seeking private data. The measure, an amendment to a broader electronic privacy law pending in Parliament, is a response to Prism, the secret spying program led by the National Security Agency that came to light in June. Europeans were outraged by the revelations that some of the biggest American Internet companies, many of whose users live in Europe, were required by the United States authorities to share information in e-mail, Web searches and other online data. Parliament’s Committee on Civil Liberties, Justice and Home Affairs may vote on the amendment as soon as Oct 21, said Jan Philipp Albrecht, the German member who is responsible for steering the legislation through the Parliament.
benton.org/node/162727 | New York Times
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Daily Digest

Analysis

October 2013

Anchor Institutions or a Digital Bridge to Nowhere?

Weekly Digest

What Happened to the Internet During the Government Shutdown?

October 18, 2013 (What's Next for the FCC, FTC?)

Health Website Woes Widen as Insurers Get Wrong Data

Facebook's New Teen Policy Draws Fire

Competitive Clouds on the Verizon

Silicon Valley: Top salaries for many, greater inequality for all