December 2013

Verizon to acquire CDN Edgecast to enhance media services

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.

Chairman Walden Announces Bipartisan Agreements on FCC Process Reform and Legislation to Improve Federal Spectrum Use

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.

Facts about low band spectrum holdings

In a recent op-ed, the Competitive Carriers Association (CCA) again called for auction limits to “prevent the two dominant wireless carriers from blocking competitors’ access to low-frequency spectrum.” The problem, according to CCA, is that AT&T and Verizon control a significant portfolio of low band spectrum. CCA specifically identifies three member companies -- Bluegrass Cellular, Cellcom, Cellular One -- that “are anxious to further expand in rural America, and they need low-frequency spectrum to do so.” As with so many arguments in the high band/low band spectrum debate, these arguments are made without much reliance on facts. So, let’s look at some relevant facts, starting with the three member companies CCA identifies in support of their argument:

  • Bluegrass Cellular – Bluegrass Cellular won both 700 MHz B and C block licenses at auction. All told, it holds 15 700 MHz licenses. Bluegrass is also leasing some upper 700 MHz C block spectrum from Verizon as part of the “LTE in Rural America” program (which is a funny way to “block” competitive access to spectrum). Finally, Bluegrass Cellular, through affiliated partnerships, holds a number of 850 MHz cellular licenses. In short, Bluegrass has a robust portfolio of low band spectrum. Indeed, given its 700 and 850 MHz portfolio, it is likely that, if T-Mobile’s proposed auction restrictions were adopted, Bluegrass’ auction participation would be restricted in some markets.
  • Cellcom – we assume this refers to New Cell, Inc., which does business as Cellcom, who is an investor in Nsighttel Wireless, LLC and Nsight Spectrum, LLC. Nsight won two 700 MHz licenses in Auction No. 73 and acquired an additional 700 MHz license on the secondary market. Like Bluegrass Cellular, Cellcom also leases 700 MHz spectrum as a participant in the LTE in Rural America program. Nsight Spectrum also holds two cellular licenses and has two affiliated partnerships (Wisconsin RSA No. 4 Limited Partnership and Wisconsin RSA-10 Limited Partnership) that hold cellular licenses. Like Bluegrass, this company already has access to low band spectrum in both 850 and 700 MHz.
  • Cellular One – we assume this refers to MTPCS, a CCA board member that does business as “Cellular One.” MTPCS is owned by Alta Communications, which also has controlling interests in Central Louisiana License Co. and TX-10 Licensee Co., companies that hold five 850 MHz cellular licenses between them. MTPCS is also a part of Verizon’s LTE in Rural America program, and it holds a long term lease of 700 MHz C block spectrum.

In short, the very companies CCA argues lack, and therefore need, low band holdings in fact have low band holdings and have readily acquired those licenses at auction, on the secondary market and through lease arrangements with other licensees. There is simply no evidence that they have been blocked in any way from gaining access to low-frequency spectrum.

New US spy satellite features world-devouring octopus

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."

We Don't Need Your Stories: President Obama and Sensationalizing Surveillance

[Commentary] On Dec 5, 2013, President Barack Obama assured a packed audience at American University that the National Security Agency is "not interested in reading your emails" and "they're not interested in reading your text messages." He then admitted that Edward Snowden's disclosures had revealed areas "of legitimate" concern, but that the reaction to the disclosures has been "highly sensationalized" and "painted in a way that is not accurate."

Every day, we are losing stories that could have been told and narratives that might have been shared because of our government's unbridled surveillance powers. Whether or not NSA employees themselves are "interested" in reading text messages does not change the fact that they can, and the checks and balances that should in principle limit their ability to do so have failed to work. On this point, President Obama spoke very carefully, observing that "the courts and congress" have "the capacity" to prevent abuses of power. Thankfully, many Americans are not fooled. On December 6, a coalition of civil society organizations, including PEN American Center, pressed for ECPA reform to require government agencies such as the FBI to seek a warrant to access information in the cloud and not just a subpoena.

[Deji Olukotun is the Ford Foundation Freedom to Write Fellow at PEN American Center]

FCC Suspends AT&T Special Access Tariffs for Investigation

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.

Intelligence Contractors Give Millions to Lawmakers Overseeing Government Surveillance

MapLight analysis of campaign contributions from political action committees (PACs) and individuals from the top 20 intelligence services contractors working with the Department of Defense, ranked by total value of contracts received, to members of the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence.

  • In total, members of the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence have received $3.7 million from top intelligence services contractors since January 1, 2005.
  • Members of the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence from Maryland -- home of NSA headquarters -- led the committees in money received from top intelligence contractors. Rep C.A. "Dutch" Ruppersberger (D-MD) is the largest recipient, having received $363,600 since January 1, 2005. Sen Barbara Mikulski (D-MD) is the second largest recipient, having received $210,150.
  • Republican members of House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence have received $1.86 million since January 1, 2005, while Democrat members have received $1.82 million over the same time period.
  • Members of the House Permanent Select Committee on Intelligence have received $2.2 million since January 1, 2005 from top intelligence services contractors, while members of the Senate Select Committee on Intelligence have received $1.5 million.
  • Lockheed Martin has given $798,910 to members the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence since January 1, 2005, more than any of the other top 20 intelligence service contractors. Northrop Grumman has given $753,101, the second highest amount, and Honeywell has given $714,913, the third highest amount.

Hold off on more TV-station acquisition deals

[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.

Zuckerberg, Obama, and Apple tell kids to try programming for an hour

Code.org’s Hour of Code initiative, which kicks off this week, has received endorsements from no less than President Barack Obama, Apple, Facebook, and Microsoft. Hour of Code seeks to motivate students at 33,000 schools to give programming a try by using tutorials on the site or by attending sessions at locations like Apple or Microsoft retail stores. Hour of Code is part of Computer Science Education Week (CSEW), which started in 2009 and begins on Monday, Dec 9. The hour of coding isn’t meant to be at any particular time; it's simply a block of time for encouraging children to engage with programming at some point during the week.

Here’s why the FTC couldn’t fine a flashlight app for allegedly sharing user location data

[Commentary] The Federal Trade Commission announced a settlement with the company behind a popular Android flashlight app recently, resolving allegations that the up to 100 million users who downloaded the app had their location tracked and shared with third parties without appropriate disclosure or consent. That sounds like a pretty big deal, right? But under the terms of the settlement, the firm won't face a very harsh punishment. It will have to rewrite its privacy policy to disclose that its users' geo-location and device ID data are shared with third parties (including advertising networks), agree to delete the personal information it already has about its users, and enter into an enforcement agreement with the FTC for the next several years.

But there won't be a fine. Why not? According to David Jacobs, Consumer Protection Counsel at the Electronic Privacy Information Center (EPIC), it all has to do with how the FTC's consumer protection authorities are set up. Under the FTC's broadest enforcement power, the FTC doesn't have the power to fine companies for a first offense.