December 2013

AGENDA

CHAIRMAN WALDEN ANNOUNCES BIPARTISAN AGREEMENTS ON FCC PROCESS REFORM AND LEGISLATION TO IMPROVE FEDERAL SPECTRUM USE
[SOURCE: House of Representatives Commerce Committee, AUTHOR: Press Release]
Communications and Technology Subcommittee Chairman Greg Walden (R-OR) announced that members of the subcommittee have reached bipartisan agreements on both the Federal Communications Commission Process Reform Act and the Federal Spectrum Incentive Act. Both pieces of legislation are set to be considered at the full committee markup. Chairman Walden and Subcommittee Ranking Member Anna Eshoo (D-CA) submitted an amendment in the nature of a substitute to the Federal Communications Commission Process Reform Act (H.R. 3675). The amendment represents a bipartisan compromise that presents the FCC with a framework to bring additional transparency and predictability. It also contains some statutory provisions including changes to the sunshine rules and a permanent exception to the Antideficiency Act for the federal Universal Service Fund. “For the last three years this subcommittee has diligently worked to improve the transparency and predictability of FCC processes,” explained Rep Walden. The committee will also consider the Federal Spectrum Incentive Act (H.R. 3674), authored by Reps. Brett Guthrie (R-KY) and Doris Matsui (D-CA), which creates a new path for government spectrum users to relinquish spectrum and receive a portion of net auction revenues instead of relocation costs.
benton.org/node/169714 | House of Representatives Commerce Committee | The Hill | The Hill
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BROADBAND/TELECOM

VERIZON BUYS EDGECAST
[SOURCE: GigaOm, AUTHOR: Lauren Hockenson]
Verizon will acquire Edgecast, one of the few outwardly profitable content delivery networks for an estimated $350 million. Edgecast is slated to join previously acquired Uplynk in boosting Verizon’s ability to offer “quality high-performance digital experiences” to customers. The company, founded in 2006, has developed a specialty in delivering high-quality video content, so it’s no surprise that Verizon snapped it up. “The combination of EdgeCast and Verizon Digital Media Services will allow us to fully exploit and accelerate growth in Internet media consumption and online business performance,” said Bob Toohey, president of Verizon Digital Media Services. “EdgeCast’s industry-leading technology and strategically placed assets, combined with Verizon Digital Media Services’ video solutions, improves our ability to deliver the rich, reliable and quality digital media services that our customers have come to expect.” The telco is clearly interested in directly marshaling the media that flows throughout its network, and it’s much more possible with this acquisition. This desire for control is the source of the ongoing clash between Verizon and the FCC over net neutrality, and it’s the edge of a slippery slope that could give Verizon the ability to express favorability towards certain sources while tamping down others. Whether Verizon will legally be able to do these things is still in the air, but it will certainly have the practical capabilities very soon.
benton.org/node/169716 | GigaOm
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AT&T SPECIAL ACCESS
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Federal Communications Commission found that there are substantial questions regarding the lawfulness of AT&T’s special access tariff revisions that require further investigation. A number of affected companies filed petitions to reject or suspend and investigate the elimination of certain term discount plans contained in AT&T’s tariff revisions and the petitions collectively cite a number of concerns about the tariff filings and raise questions about whether they comply with the FCC’s rate regulations and whether they are anticompetitive or otherwise violate the Communications Act of 1934.
benton.org/node/169706 | Federal Communications Commission
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A SEASON FOR SALES TAXES
[SOURCE: New York Times, AUTHOR: Editorial Staff]
[Commentary] On Cyber Monday this month, a big day for online shopping, the Supreme Court quietly cleared the way for states to begin collecting some $13 billion in sales taxes that go uncollected each year on Internet purchases. That development creates an important opening for hard-pressed states to update their sales-tax codes broadly. Taxing online purchases of merchandise is only one way to tax Internet commerce. Twenty-three states lose some $300 million a year because they do not tax downloads of music, movies, games, books and other items that are sold and delivered digitally. Forty-two states lose some $350 million a year because they let online travel companies charge sales taxes based on the wholesale rate they pay hotels for the right to rent rooms, rather than the price they charge customers. While sales taxes are generally regressive, sales taxes on Internet purchases tend to spare low-income consumers somewhat because they shop less online than those with higher incomes. Broadened sales taxes could also be paired with more progressive state income taxes to ensure that the burden is widely shared. Ideally, Congress would pass a law to ensure uniform and comprehensive taxation of Internet sales. Until that happens, states will have to act on their own.
benton.org/node/169734 | New York Times
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TELEVISION

HOLD OFF ON MORE TV-STATION ACQUISITION DEALS
[SOURCE: Seattle Times, AUTHOR: Editorial staff]
[Commentary] Finally, a powerful elected official is doing something about the Federal Communications Commission’s failure to protect the integrity of the public's airwaves. US Sen Jay Rockefeller (D-WV) warned new FCC chairman Tom Wheeler in a letter that his agency should proceed “cautiously” as it considers several pending television station sales. Sen Rockefeller, Senate commerce committee chair, gets it. Too many local stations are being bought up by a handful of companies too quickly. The result is less information from different viewpoints, and a weakened democracy. Without extra scrutiny, the FCC routinely caters to profit-driven corporations instead of communities. Democracy suffers when regulators refuse to uphold their core mission to preserve and promote competition, independent ownership and diverse perspectives on public airwaves.
benton.org/node/169701 | Seattle Times
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THE SEATTLE TIMES GOT IT WRONG
[SOURCE: TVNewsCheck, AUTHOR: Lee Spieckerman]
[Commentary] The Seattle Times and its publisher, Frank Blethen, have long styled themselves as crusaders for independent journalism and freedom of the press. So, it’s both discordant and disappointing that a recent editorial in The Times called for heavy-handed federal government intervention to limit media companies’ ability to acquire and run more TV stations. Television broadcasters in Seattle and across the country are operating in the most brutal business environment in their history — besieged by a plethora of online and mobile video offerings, with more entrants sprouting up every day. Unlike most of those competing services, Seattle’s broadcast TV stations provide high quality local news and weather coverage — and it’s totally free to anyone with an antenna. Even viewers who get their local TV stations from cable and satellite pay far less for it proportionally than they do for much less-watched national cable networks like USA and ESPN. To keep their businesses viable in this arduous new media age, TV station owners need to amortize costs across more outlets and build scale to increase negotiating clout with programming suppliers and cable and satellite carriers. But localism will continue to be what sets broadcast television stations apart and will always be crucial to their financial success. The federal government intervention in local broadcasting ownership endorsed by Blethen would seriously impair the industry and reduce the number of broadcasters able to make the substantial investment required to produce local television news. But Blethen’s stance is not only irresponsible for someone who claims to celebrate robust local journalism, it’s appallingly disingenuous and self-serving. [Spieckerman is CEO of SpieckermanMedia LLC, a Dallas-based strategic communications consultancy and cable television network company]
benton.org/node/169724 | TVNewsCheck
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NEWS RECORDINGS TO BE DIGITIZED
[SOURCE: Associated Press, AUTHOR: ]
A woman who faithfully taped 35 years of TV news with the hope that one day it would prove to be valuable, searchable historical material did not live to see her dream realized. But the vision of Philadelphia resident Marion Stokes, who died last year at 83, will become a reality now that her 140,000 video cassettes are being archived in an online library. The trove, which totals about a million hours of newscasts, is expected to arrive in the Bay Area at the Internet Archive in Richmond where it will be digitized and made available to the public. The massive collection include local news shows from Philadelphia between 1986 and 2012, and broadcasts from Boston, where she once lived, from 1977 to 1986. All the while, she also recorded national news and cable channels, leading to her to run several VCRs simultaneously 24 hours a day. Her son, Michael Metelits, described Stokes as "searingly intelligent" and said her passion was rooted in the belief that a well-informed public was essential to good governance.
benton.org/node/169728 | Associated Press
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CONTENT

LAWSUIT MAY ‘CHILL ONLINE SPEECH’
[SOURCE: Associated Press, AUTHOR: Amanda Lee Meyers]
From Twitter and Facebook to Amazon and Google, the biggest names of the Internet are blasting a federal judge's decision allowing an Arizona-based gossip website to be sued for defamation by a former Cincinnati Bengals cheerleader convicted of having sex with a teenager. In court briefs recently filed in the 6th U.S. Circuit Court of Appeals in Cincinnati, the Internet giants warn that if upheld, the northern Kentucky judge's ruling to let the former cheerleader's lawsuit proceed has the potential to "significantly chill online speech" and undermine a law passed by Congress in 1996 that provides broad immunity to websites. "If websites are subject to liability for failing to remove third-party content whenever someone objects, they will be subject to the `heckler's veto,' giving anyone who complains unfettered power to censor speech," according to briefs filed Nov. 19 by lawyers for Facebook, Google, Microsoft, Twitter, Amazon, Gawker and BuzzFeed, among others. Those heavy hitters "really tell you how major of an issue this is," said David Gingras, attorney for Scottsdale (AZ)-based thedirty.com and its owner, Nik Richie, who lives in Orange Count (CA)
benton.org/node/169690 | Associated Press
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VIRAL STORIES
[SOURCE: New York Times, AUTHOR: Ravi Somaiya, Leslie Kaufman]
Truth has never been an essential ingredient of viral content on the Internet. But in the stepped-up competition for readers, digital news sites are increasingly blurring the line between fact and fiction, and saying that it is all part of doing business in the rough-and-tumble world of online journalism. Several recent stories rocketing around the web, picking up millions of views, turned out to be fake or embellished. Their creators describe them essentially as online performance art, never intended to be taken as fact. But to the media outlets that published them, they represented the lightning-in-a-bottle brew of emotion and entertainment that attracts readers and brings in lucrative advertising dollars.
benton.org/node/169732 | New York Times
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ADVERTISING

WHAT’S WORSE THAN SPONSORED CONTENT? THE FTC REGULATING IT
[SOURCE: Reuters, AUTHOR: Jack Shafer]
[Commentary] What’s more dangerous to consumer well-being, sponsored content or the intervention of the Federal Trade Commission? The agency held a conference, “Blurred Lines: Advertising or Content,” to “discuss native advertising,” as the New York Times put it. When convening a conference to “discuss” something or other, the FTC (or other regulatory entities) is almost never in pursuit of discussion -- any more than a police officer who says he just wants to talk. Such conversational assemblies usually become venues in which the agency can issue a veiled threat, either directly or indirectly, to its targets, instructing them sotto voce that unless they change their ways they’ll suffer the agency’s wrath. The regulatory playbook usually dictates that the agency promise targets that unless they start observing “voluntary” restrictions, the agency will have to request legislative authority to make restrictions mandatory. Nothing can be “voluntary” if somebody is threatening to make it mandatory, but the gambit works nine times out of ten. Given the power of the First Amendment, the FTC will have to step more lightly in its legal thrusts against news and information websites than it does against advertisers, whose rights to commercial speech are huge but do not include a right to deceive. Would FTC action encourage advertisers to switch to their own sites rather than fight the regulators, preventing publishers from finding a way serve the mutual benefit of both reader and advertiser? The publication-reader-advertising symbiosis that worked so well for so many decades has obviously broken down, and the flight to sponsored content marks a failure of publishers and advertisers to build something of its equal.
benton.org/node/169686 | Reuters
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HEALTH

MEANINGFUL-USE DEADLINE PUSHED BACK ONE YEAR
[SOURCE: Modern Healthcare, AUTHOR: Joseph Conn]
The Centers for Medicare & Medicaid Services (CMS) is giving providers another year to show they've met the Stage 2 criteria of the federal government's incentive program to encourage the adoption and meaningful use of electronic health records. That means the start of the next phase will be pushed back a year. Stage 2 will be extended through 2016 and Stage 3 won't begin until at least fiscal year 2017 for hospitals and calendar year 2017 for physicians and other eligible professionals that have by then completed at least two years at Stage 2, the CMS said. The latest extension parallels what the feds did with Stage 1, which was originally set to last two years but was lengthened by a year when it appeared the industry would be overstretched to build and get acclimated to systems capable of meeting the federal payment program's more stringent Stage 2 criteria. “The goal of this change is two-fold,” according to a CMS statement from Robert Tagalicod, director of the Office for E-Health Standards and Services at the CMS, and Dr. Jacob Reider, acting head of the ONC, the Office of the National Coordinator for Health Information Technology at HHS. The delay, they said, is intended to allow the CMS and ONC to focus on helping providers meet Stage 2's demands for patient engagement, interoperability and information exchange, as well as use data collected during that phase to inform policy decisions for Stage 3. The proposed rules are expected to be released in the fall of 2014 for the requirements providers must meet for Stage 3, as well as the 2017 Edition of standards health IT developers must build and test their systems to match.
benton.org/node/169682 | Modern Healthcare
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GOVERNMENT & COMMUNICATIONS

THE INTERNET SPYING DEBATE BEGINS IN EARNEST
[SOURCE: American Enterprise Institute, AUTHOR: Jeffrey Eisenach]
[Commentary] A coalition of Internet firms -- including AOL, Apple, Facebook, Google, LinkedIn, Microsoft, Twitter and Yahoo -- issued a powerful but thoughtful call for reform of government online spying activities. The five principles they put forward are: 1) Limiting Governments’ authority to collect users’ information; 2) Oversight and accountability; 3) Transparency about Government demands; 4) Respecting the free flow of information; and 5) Avoiding conflicts among governments. Three points are worth making. First, the principles laid out by the coalition are hardly radical ones, but rather common sense expressions of rights most Americans surely thought, until recently, they already had. If folks in the national security establishment have problems with any of these, they ought to explain what and why. Second, based on what we know, it seems clear that many governments, including our own, have been violating at least some of these principles. The political problem facing the US -- as is so often the case in privacy matters -- is the violation of expectations, which is another way of saying that the US national security establishment appears to have been operating in a political vacuum, either imagining that its surveillance activities (e.g., the NSA’s 1.5 million square foot Utah data storage facility) would never be publicly revealed (Really?), or completely clueless to, and unprepared for, the reaction once they were. Third, it would be interesting to assess the list of companies joining the coalition based on two variables: (1) Government contracts as a percentage of revenues; and, (2) Extent of operations in heavily regulated markets.
benton.org/node/169694 | American Enterprise Institute
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NEW US SPY SATELLITE FEATURES WORLD-DEVOURING OCTOPUS
[SOURCE: ars technica, AUTHOR: Joe Mullin]
President Barack Obama is out to put the public's mind at ease about new revelations on intelligence-gathering, but the Office for the Director of National Intelligence can't quite seem to get with the program of calming everyone down. The ODNI had been pumping up the launch of a new surveillance satellite launched by the National Reconnaissance Office. The satellite was recently launched, and ODNI's Twitter feed posted photos and video of the launch. Unmistakable was the new NRO logo that goes with this satellite: "Nothing is Beyond Our Reach," it says, featuring an octopus with its arms wrapped around the globe. It's the kind of picture that you might think up if you were devising an emblem for a villain in a superhero movie. "NROL-39 is represented by the octopus, a versatile, adaptable, and highly intelligent creature," an NRO spokeswoman said. "Emblematically, enemies of the United States can be reached no matter where they choose to hide."
benton.org/node/169710 | Ars Technica
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STATE OF DECEPTION
[SOURCE: New Yorker, AUTHOR: Ryan Lizza]
[Commentary] August 2013, at the height of the frenzy over Edward Snowden’s disclosures, President Barack Obama delivered remarks at the White House suggesting that he was wrestling with whether, as President, he had struck the proper balance on surveillance policy: “Given the history of abuse by governments, it’s right to ask questions about surveillance -- particularly as technology is reshaping every aspect of our lives.” In practice, President Obama has not wavered from the position taken by the National Security Agency’s lawyers and embraced by Sen Dianne Feinstein (D-CA), senior intelligence committee chairwoman, or from the majority of the Intelligence Committee. The history of the intelligence community, though, reveals a willingness to violate the spirit and the letter of the law, even with oversight. In recent years, Americans have become accustomed to the idea of advertisers gathering wide swaths of information about their private transactions. The NSA’s collecting of data looks a lot like what Facebook does, but it is fundamentally different. It inverts the crucial legal principle of probable cause: the government may not seize or inspect private property or information without evidence of a crime. Sen Feinstein maintains that data collection is not surveillance. But it is no longer clear if there is a distinction.
benton.org/node/169696 | New Yorker
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STORIES FROM ABROAD

WITH NO NOTICE, PUTIN SCRAPS KREMLIN NEWS AGENCIES
[SOURCE: New York Times, AUTHOR: Steven Myers]
President Vladimir V. Putin dissolved one of Russia’s official news agencies, RIA Novosti, along with its international radio broadcaster, signaling a significant reorganization in state media at a time when Russia’s international reputation has faced criticism over political and human rights and Russian influence in neighboring countries like Ukraine. The two agencies will be absorbed into a new state organization known as Rossiya Sevodnya, or Russia Today, to be led by a television executive and host, Dmitry K. Kiselyov, who has provoked controversy with starkly homophobic remarks and virulent commentary about foreign conspiracies against Russia. Putin’s presidential chief of staff, Sergei B. Ivanov, said the decision was part of an effort to reduce costs and make the country’s state media more efficient, but RIA Novosti’s report on its own demise said the changes “appear to point toward a tightening of state control in the already heavily regulated media sector.”
benton.org/node/169679 | New York Times | Politico | NPR | Huffington Post
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CHINA’S SPYING
[SOURCE: New York Times, AUTHOR: Nicole Perlroth]
Computer breaches at the foreign ministries of the Czech Republic, Portugal, Bulgaria, Latvia and Hungary have been traced to Chinese hackers. The attacks, which began in 2010, are continuing, according to a report by FireEye, a computer security company. Though researchers do not name the hackers’ targets in the report, The New York Times identified the foreign ministries through email addresses listed on the attackers’ web page. A person with knowledge of the investigation, who was not authorized to speak publicly, confirmed that the foreign ministries of the five countries had been breached. Even as revelations by Edward J. Snowden about surveillance conducted by the National Security Agency and its intelligence partners dominate attention, the FireEye report is a reminder that Chinese hackers continue to break into the computer systems of governments and firms using simple, email-based attacks.
benton.org/node/169720 | New York Times
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December 2013

December 10, 2013 (TV-station acquisition deals)

A Season for Sales Taxes

If a Story Is Viral, Truth May Be Taking a Beating

Cable-TV Bosses Dance Around Merger Talks

Woman's 140K tapes of TV news to be digitized, by Bay Area nonprofit

Protesters block Google bus in San Francisco Mission

The Seattle Times Got It wrong

Tribune moves forward with newspaper unit spinoff

China Is Tied to Spying on European Diplomats

European watchdog presses Samsung over patents litigation