March 2014

GOVERNMENT & COMMUNICATIONS

NO CLEAR PATH
[SOURCE: The Hill, AUTHOR: Julian Hattem]
President Barack Obama’s proposal to end government collection of Americans’ phone records is expected to face a rocky path on Capitol Hill as lawmakers and pressure groups disagree on details and the scope of National Security Agency reform. “I think working through all those things, and given the president’s general reluctance to weigh in very heavily on this issue, means that things are going to be tough to move forward,” said Gary Schmitt, co-director of the conservative American Enterprise Institute’s security studies center. Lawmakers’ attempt to expand or edit the White House’s proposal “could become a Christmas tree with everybody’s desire to pin all kinds of bells and whistles on the effort," he added.
benton.org/node/179450 | Hill, The
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JUSTICE-BUSINESS COMPROMISE
[SOURCE: Bloomberg, AUTHOR: Del Quentin Wilber]
The President was ready to pledge on national television that he would let communications companies disclose more than ever about secret US government data requests. Problem was: big Internet firms weren’t on board. And it was David O’Neil’s job to fix it, fast. The night before President Barack Obama’s Jan. 17 speech, O’Neil, a Justice Department lawyer, and his boss, Deputy Attorney General James Cole, got on the phone with attorneys for five major technology companies. All five were suing the US government for permission to disclose the extent of those same classified government orders, which require them to hand over records of customers’ e-mails and Internet use. O’Neil and Cole got straight the point: the President and Attorney General wanted the government to be more transparent, and the companies should accept a deal and drop their suits, according to three government officials and two other people with direct knowledge of the negotiations who spoke to Bloomberg News. They all asked for anonymity to describe the private talks. It took 10 more days from that Jan. 16 call for O’Neil to reach a compromise with Google, Facebook, LinkedIn, Microsoft and Yahoo. The tale of how that compromise was reached -- on a comparatively straightforward issue -- foreshadowed the challenge ahead as the Obama administration, Congress and businesses now try to craft a new law to govern who stores and controls access to millions of records now kept by the National Security Agency.
benton.org/node/179445 | Bloomberg
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SURVEILLANCE REFORM
[SOURCE: The Guardian, AUTHOR: Trevor Timm]
[Commentary] Stopping the government from holding onto of all Americans' phone metadata would undoubtedly be a good thing for American privacy, but if you read between the legislative lines, the government might not be curtailing mass surveillance so much as permanently entrenching it in American law. Maybe it's time we heed the warning of the late George Carlin: "'Bipartisan' usually means that a larger-than-usual deception is being carried out." [Timm is executive director of the Freedom of the Press Foundation]
benton.org/node/179430 | Guardian, The
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JOURNALISM

PEW UPDATES US ON STATE OF THE NEWS
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
[Commentary] On March 26, the Pew Research Center released State of the News Media 2014, the eleventh annual report by the Pew Research Center examining the landscape of American journalism. The study includes special reports about the revenue picture for news, the growth in digital reporting, the role of acquisitions and content sharing in local news and how digital video affects the news landscape. In addition, it provides the latest data on audience, economic, news investment and ownership trends for key sectors of news media. In an overview of the report Amy Mitchell, Pew’s Director of Journalism Research, writes “the level of new activity this past year is creating a perception that something important, perhaps even game-changing, is going on. If the developments in 2013 are at this point only a drop in the bucket, it feels like a heavier drop than most. The momentum behind them is real, if the full impact on citizens and our news system remains unclear.” Here’s a look at six major trends in the industry.
http://benton.org/node/179364
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INTERNET/BROADBAND

THE FALLACIES OF GOVERNMENT-RUN BROADBAND
[SOURCE: Forbes, AUTHOR: Wayne Winegarden]
There is no doubt that an effective broadband infrastructure is essential for the 21st century U.S. economy. This is why the misinterpretations of a recent Government Accountability Office (GAO) report are so problematic. The policy recommendations that are being derived from these incorrect interpretations, if followed, would significantly inhibit the growth and efficiency of the US broadband infrastructure. Cheerleaders for greater federal involvement in the broadband services, such as Rep Anna Eshoo (D-CA), erroneously concluded that “This GAO report confirms that when it comes to closing our digital divide, federal investment in broadband deployment has been pivotal to the success of America’s small businesses.” However, the GAO report does not demonstrate what Rep Eshoo or others suggest.
First, the report was not designed to be used as the basis for policy recommendations. In fact, the GAO states in the report that “the results of our interviews cannot be projected to all service providers and small businesses”.
Second, the report does not account for the total costs associated with government-run networks. The actual cost of a government-operated network, which should include the costs incurred by taxpayers to construct and operate the government-operated broadband networks, is much higher than a simple rate comparison implies.
Third, the role of government funding is dwarfed by the role of private capital in building and maintaining broadband networks. The nation’s broadband infrastructure has been developed, and continues to be driven by, private-sector investment.
[Winegarden is a Senior Fellow at the Pacific Research Institute]
benton.org/node/179418 | Forbes
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GIGABIT SQUARED IN CHICAGO
[SOURCE: Chicago Sun-Times, AUTHOR: Sandra Guy]
The state of Illinois is fighting to take back $2 million in grant money it awarded a company that promised to install ultra-high speed Internet access throughout the South Side of Chicago. Gigabit Squared, a Cincinnati-based company that last May touted the high-speed project in nine South Side communities, “has lied repeatedly” about its intentions and may have spent only $250,000 of the grant money for legitimate purposes, said David Roeder, spokesman for the Illinois Department of Commerce and Economic Opportunity, which issued the grant. The state agency has tried since January to get the money returned. Roeder said Gigabit Squared failed to give the state the information it needed to trace how the money was spent, and “we have no patience with this abuse of the public’s trust.” The state sent a letter to Gigabit Squared asking whether they want to seek an informal hearing on the dispute. The company has until April 10 to respond. Gigabit Squared issued a statement, saying in part: “Gigabit Squared’s new leadership team has a proactive, open, and honest dialogue with the State of Illinois to move towards a positive resolution of the project. This has included access to the company, its records, leadership, and meeting every deadline provided as part of the State’s normal review process. We are particularly puzzled by the comments regarding our delaying the process which is contrary to both verbal and written comments from the State indicating its appreciation for our openness and cooperation during this process.”
benton.org/node/179417 | Chicago Sun-Times
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HERE IS HOW TO GET OPEN INTERNET RULES RIGHT
[SOURCE: Public Knowledge, AUTHOR: Michael Weinberg]
[Commentary] Public Knowledge and Common Cause submitted comments in the Federal Communications Commission’s Open Internet proceeding. In the comments we made clear that the FCC must move quickly to establish strong, enforceable open internet rules that can withstand the inevitable court challenge. Here are some of the high-level points.
The Open Internet is Important.
Title II is the Best Way to Protect an Open Internet.
Open Internet is Broader Than Net Neutrality.
Phone Principles (Service to all Americans, Competition & Interconnection, Consumer Protection, Network Reliability, Public Safety) Can Help Guide Internet Access Principles.
The FCC Should Promote Rural and Municipal Broadband.
benton.org/node/179380 | Public Knowledge
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NET NEUTRALITY AND INDIE FILMMAKERS
[SOURCE: The Wrap, AUTHOR: Jordan Zakarin]
Consumer groups and tech advocates have been voicing concern about the growing threats to net neutrality, but Hollywood -- especially independent filmmakers and distributors -- have plenty of reason to worry about the walls and toll booths being erected to discriminate between internet content. “If we want to directly sell movies off our site, like Louis CK does, the challenges that I then have is, what price do I have to pay to make sure that my information is delivered at the speed and is as high quality as it can be?” said Ted Hope, a veteran indie film producer (“21 Grams,” “Adventureland”) who now runs the independent distributor Fandor. “To get information faster, big pocketed entities like Netflix go and make deals with Comcast, but small companies don't have that option.”
benton.org/node/179379 | Wrap, The
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SMALL TELCO BROADBAND
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
The number of residential customers taking broadband service from the nation’s smaller rate of return carriers more than doubled between December 2010 and December 2012 -- increasing 114%, according to a report released from the Federal Communications Commission. In comparison, the number of residential customers taking broadband service from the nation’s largest price cap carriers increased 61% over the same period. The report from the Wireline Competition Bureau, titled “Universal Service Implementation Progress Report,” was based on data collected from carriers. Broadband was defined as any landline connection providing data rates of 3 Mbps downstream and 768 kbps upstream. Data collected about business customers showed a similar trend. Rate of return carriers saw a 97% increase in broadband customers, while price cap carriers saw an increase of 65%. The difference between what rate of return and price cap carriers experienced may reflect the higher level of competition that price cap carriers face. Although higher-speed services from the large telcos are seeing gains, telco DSL offerings have been hit hard by broadband services from cable companies, which tend to support higher data rates.
benton.org/node/179378 | telecompetitor | read the FCC report
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VERIZON’S AND AT&T’S NETFLIX CUSTOMERS
[SOURCE: ars technica, AUTHOR: Jon Brodkin]
Netflix's February rankings show that Google Fiber's average Netflix speed of 3.74Mbps was more than twice as high as Comcast, AT&T, and Verizon, which are the first, second, and fourth biggest broadband providers in the country. Cablevision, Cox, Suddenlink, and Charter beat the biggest ISPs in the national speed rankings too. The trend has been a downward one for months on Verizon, Comcast, and AT&T, yet only customers of Comcast have reason to hope it might improve. That's because Netflix reluctantly agreed to pay Comcast for a direct connection to its network. Already, Netflix streaming on Comcast improved slightly in February and should continue to get better as more traffic goes over the direct connection between Netflix and Comcast. But what about Netflix customers stuck with Verizon or AT&T? There's nothing to do but wait. AT&T said it would be too expensive to upgrade its network without help from Netflix and other bandwidth-heavy services. In other words, Netflix has to pay or consumers will either face worse performance or get higher bills from AT&T.
benton.org/node/179432 | Ars Technica
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NETFLIX AND COMCAST
[SOURCE: American Enterprise Institute, AUTHOR: Babette Boliek]
[Commentary] The truth is that large successful Internet companies like Google, Amazon and Microsoft have long paid for transit either directly to a consumer access provider like Comcast or Verizon or to a middleman like Akami. What Netflix is feeling is the cost of success. Netflix thinks they should get more and better Internet transport service for zero price increase. In other words, they think you, the Internet service consumer (whether or not you use Netflix), should subsidize their growing success.
[Boliek is an associate professor of law at Pepperdine University School of Law]
benton.org/node/179372 | American Enterprise Institute
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OPEN INTERNET
[SOURCE: Wall Street Journal, AUTHOR: L Gordon Crovitz]
[Commentary] You might think Bill Clinton would embrace the Obama administration's surrender of US control over the Internet. After all, it was the Clinton administration in the 1990s that invented "multistakeholder" governance of the Internet. Instead, Clinton, appearing on a panel discussion at a recent Clinton Global Initiative event, defended US oversight of the domain-name system and the Internet Corporation for Assigned Names and Numbers, or ICANN. As author of the multistakeholder concept, he knows it is only US control that keeps other governments at bay, allowing stakeholders like engineers and private companies to operate an open Internet. The Obama plan to abdicate oversight would permanently undermine the permissionless Internet, built under U.S. leadership to enable websites to operate free of government regulation. There should be bipartisan support in Washington for the US to retain its role and protect stakeholders and Web users from repressive regimes. Otherwise it's the beginning of the end for the open Internet.
benton.org/node/179444 | Wall Street Journal
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TELEVISION

FCC TWEAKS OWNERSHIP PROPOSAL
[SOURCE: Wall Street Journal, AUTHOR: Gautham Nagesh]
The Federal Communications Commission will vote March 31 on a proposal to make it harder for one company to control two or more TV stations in the same market by using a single advertising sales staff, after last-minute changes were made to quell concerns about ownership diversity. FCC Chairman Tom Wheeler has argued that large broadcast companies use joint sales agreements as a way to circumvent limits on owning more than one station in a local market. His proposal, which is part of the commission's quadrennial review of its media ownership rules, would give stations two years to unwind the agreements or secure a waiver from the FCC. Broadcasters have responded by arguing that the agreements often help keep struggling stations in small and rural markets afloat. With both Republican commissioners expected to oppose Wheeler's proposal, FCC Commissioner Mignon Clyburn is viewed as the swing vote. In response to broadcaster concerns, Commissioner Clyburn has pushed for the addition of provisions that would ensure the FCC responds to any waiver request within 90 days, and specific language that would ease the way for joint-sales agreements that include a minority ownership component. People familiar with the matter said both items have been added to the order before the vote.
benton.org/node/179443 | Wall Street Journal
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SSA LETTERS
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairman Tom Wheeler]
On November 25, 2013, Sen John Rockefeller (D-WV) wrote a letter to Federal Communications Commission Chairman Tom Wheeler asking the FCC to explore the impact of shared services agreements (SSAs) on the concentration of broadcast media outlets in local markets. On March 19, Chairman Wheeler wrote back to Sen Rockefeller saying that the FCC bears a very important responsibility in ensuring that broadcast license holders act in the public interest, convenience, and necessity. “Your letter highlights significant issues for the Commission to contemplate in administering that responsibility with respect to broadcast licensing and ownership, and I have circulated an item for consideration at the March Open Meeting that will seek additional comment on the issues related to SSAs, including whether such agreements should be disclosed publicly. I will ensure that your letter is placed in the quadrennial ownership review docket. Additionally, we will take these issues into consideration when reviewing media license transfer applications.”
benton.org/node/179419 | Federal Communications Commission | Chairman Rockefeller
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CHAIRMAN WHEELER’S DIVERSITY CLAIM IS A FANTASY
[SOURCE: TVNewsCheck, AUTHOR: Harry Jessell]
[Commentary] Federal Communications Commission Chairman Tom Wheeler’s contention that eliminating joint sales agreements will open up new opportunities for minority and women to become TV station owners ignores the fact that TV broadcasting is no longer a business for small operators, regardless of their gender or color. It's a business for behemoths with negotiating clout. On the other hand, if Wheeler called off the incentive auction tomorrow, there would be all kinds of TV stations available for all kinds of buyers, including minorities and women.
benton.org/node/179420 | TVNewsCheck
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SPORTS AND CABLE BILLS
[SOURCE: Los Angeles Times, AUTHOR: Warren Grimes]
[Commentary] Imagine famous football coaches and professional athletes taking a 50% salary cut. University of Alabama football coach Nick Saban's annual salary would be a mere $3.5 million or so. Angels baseball star Albert Pujols would earn just $8 million a year. And the Lakers' Kobe Bryant would have to be satisfied with a yearly $15 million. Not by chance, if this came to pass, you the consumer would reclaim control of your rapidly rising monthly subscription TV bill. This is not just idle speculation. Something like this will probably occur when the forced bundling of television channels ends and the consumer is given meaningful choices about which channels to purchase. As increasing numbers of viewers simply forgo subscription TV, demand alone will ultimately force change to this dysfunctional, highly unfair and ultimately doomed system. But it may take a while: Powerful interests are fighting to preserve a business model that rewards them and their clients, chief among them the American sports industry. Consumer choices should dictate which TV programs survive and which do not. Consumer sovereignty is what competition is all about.
[Grimes is a professor of antitrust law at Southwestern Law School]
benton.org/node/179442 | Los Angeles Times
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WIRELESS/SPECTRUM

CHANNEL SHARING REPORT
[SOURCE: CTIA, AUTHOR: Press release]
TIA–The Wireless Association and Los Angeles television stations KLCS and KJLA released their channel sharing pilot project report, which clearly proved channel sharing is feasible, and is a technically viable option for broadcasters with minimal impact for viewers. For stations interested in sharing a single six MHz radiofrequency channel, the results show how to successfully navigate numerous technical situations that may arise as well as real-world implications for successful channel sharing. The report reflects the findings of the two participating stations and to the extent that similar combinations of stations arise elsewhere, this testing may serve as a baseline assessment of channel sharing. Findings include:
Physical and virtual level channel sharing is feasible.
It is technically possible to combine two high definition (HD) television streams onto a single channel.
Two HD streams may be combined with additional standard definition (SD) program streams. Up to two additional SD streams are possible without major impact to the quality of experience of the overall material. Additional SD streams may be possible with additional testing and analysis.
It may be feasible for three HD streams to be combined onto a single channel. Testing found that this combination may be technically feasible and of value for broadcasters, but each entity needs to examine the digital complexity of its material and decide if this combination is acceptable for its viewers.
One HD stream may be combined with a variety of SD programs. The parties tested one HD and up to seven SD streams in a single Advanced Television System Committee (ATSC) channel with good results.
In order to ensure a positive viewer experience, the FCC and broadcasters must carefully plan a transition to a repacked television band that includes consumer guidance on rescanning.
benton.org/node/179382 | CTIA | read the report
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FCC CHAIRMAN TOM WHEELER STATEMENT ON CHANNEL SHARING PILOT PROJECT REPORT
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairman Tom Wheeler]
Los Angeles stations KLCS and KJLA have provided real world evidence that channel sharing presents a significant opportunity for broadcasters to continue their existing business on shared spectrum and take home a check for spectrum they voluntarily relinquish in the incentive auction. By demonstrating the feasibility of combining multiple HD streams onto a single channel or combining one or two HD streams with several SD programs, the pilot project has made a compelling case for channel sharing. In business, it is very rare to be able to have your cake and eat it too. It is my hope that broadcasters closely study the channel sharing pilot project report as they consider the once-in-a-lifetime opportunity offered by the upcoming incentive auction.
benton.org/node/179381 | Federal Communications Commission
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OWNERSHIP

A VISION FOR COMCAST IN A POST-MERGER WORLD
[SOURCE: New York Times, AUTHOR: James Stewart]
Comcast’s chief executive, Brian Roberts, was stung four years ago when Reed Hastings, chief executive of the then-fledgling Netflix, dismissed Comcast with a rhetorical question: “Why would we want to do a deal with a regional cable company?” If Roberts has his way, Comcast will soon be neither regional nor cable. With its aggressive push into broadband Internet and its bold acquisition of NBC Universal, Comcast already is no longer just a cable company. If its proposed $45 billion acquisition of Time Warner Cable is approved by regulators, it won’t be regional, either. And Hastings is making deals with Comcast now. Roberts sees the new Comcast as a global technology company and its major competitors the media companies of the future: Google, Amazon, Facebook and even Apple, with which Comcast has been engaging in tentative negotiations. “The alternative was to sit around and let cable die a slow death,” said Roberts. “Cable is a relic of an antiquated model,” when municipalities doled out local monopolies to cable operators. “The result is we’re not in New York or Los Angeles. How great can that be?”
benton.org/node/179383 | New York Times
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EDUCATION

FCC ANNOUNCES E-RATE INFLATION-BASED CAP FOR FUNDING YEAR 2014
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Federal Communications Commission’s Wireline Competition Bureau announces that the E-rate program funding cap for funding year 2014 is $2,413,817,693. The new cap represents a 1.4% inflation-adjusted increase from funding year 2013’s cap of $2,380,314,485.
benton.org/node/179421 | Federal Communications Commission
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CONTENT

FREE SPEECH AND SEARCH ENGINES
[SOURCE: IDG News Service, AUTHOR: Michael Kan]
US District Judge Jesse Furman of the US District Court for the Southern District of New York has ruled that the Chinese search engine Baidu has the right to block pro-democracy works from its query results, dismissing a lawsuit that sought to punish the company for Internet censorship. The lawsuit against Baidu, originally filed in 2011 by eight activists in New York, claimed that the Chinese search engine had violated US laws on free speech. This was because Baidu had been censoring pro-democracy works on its search engine for not only its users in China, but also for those accessing the site from New York. Judge Furman ruled against the activists, and said requiring Baidu to include pro-democracy works in its search results would "run afoul" of the US's free speech laws. He compared Baidu's blocking of pro-democracy works to a newspaper's right to exercise "editorial control" to publish what it wants. In Baidu's case, the company has created a search engine that favors certain political speech. "The First Amendment protects Baidu's right to advocate for systems of government other than democracy [in China or elsewhere] just as surely as it protects Plaintiffs' rights to advocate for democracy," wrote Judge Furman.
benton.org/node/179374 | IDG News Service | Quartz
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LOBBYING

COMCAST WAR
[SOURCE: Politico, AUTHOR: Tony Romm]
Washington can get a sneak peek of the war to come over Comcast’s plan to purchase Time Warner Cable -- on Facebook and Twitter. As Comcast readies its army of more than 100 lobbyists to sell the deal, some opponents also are taking aim, launching two pages this month on the social sites as unofficial hubs for stories and statements that slam the $45 billion megadeal. There’s little that reflects the pages’ authorship, and the effort itself seems minuscule. But it actually demonstrates the new, early coordination among consumer groups like Public Knowledge and Free Press, and companies like Netflix and Cogent Communications. While many potential dissenting voices have been slow to surface, these and other players are making noise as they devise a strategy to fight Comcast’s well-funded campaign for Time Warner Cable. “It’s interesting how, by hanging up a shingle against the merger, all kinds of people come out of the woodwork wanting to work with us,” said Gene Kimmelman, president and CEO of Public Knowledge.
benton.org/node/179439 | Politico
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COMCAST LOBBYING
[SOURCE: Philadelphia Inquirer, AUTHOR: Jonathan Tamari]
Along with lobbying on issues with obvious ties to its business -- cybersecurity, Internet taxes, telecom regulations, and others -- Comcast has worked to influence bills centered on immigration reform, homeland security, and college aid, according to its disclosure reports. It lobbied on the assault-weapons ban and on the farm bill, which determines agriculture policy (think: crop insurance, sugar subsidies, and policies on poultry and beets) and food aid for the poor. The array of bills shows just how much of American life is touched by a cable and Internet giant that now also owns TV networks (NBC and Telemundo), a movie studio (Universal), theme parks, and sports channels. Comcast's reach will face new scrutiny April 9 as a Senate committee begins hearings on the company's proposed $45.2 billion purchase of Time Warner Cable.
benton.org/node/179438 | Philadelphia Inquirer
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STORIES FROM ABROAD

NET NEUTRALITY VOTE
[SOURCE: New York Times, AUTHOR: Mark Scott]
The online habits of customers, and their ability to pay, are the focus of digital policy legislation on which lawmakers from the European Union’s 28 member countries plan to vote in Brussels. A key part of the legislation is so-called network neutrality. The rules are meant to ensure equitable access to Internet’s pipelines for services like streaming music, on-demand television and cloud computing. The big questions are who pays for them, and how much. The proposed rules have drawn furious lobbying from telecommunications companies like Vodafone, Internet giants like Google and smaller players like Spotify, and advocacy groups on behalf of the European Union’s 500 million consumers. The battle is akin to a struggle playing out in the United States but with its own European twists. The outcome could help determine whether the financial incentives are in place to pay for the multibillion-euro investments needed to upgrade Europe’s patchy mobile and landline Internet infrastructure, which in the absence of Continentwide rules has slipped ever farther behind the more advanced data networks of North America and Asia.
benton.org/node/179436 | New York Times
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March 2014

Global thrust to achieve universal broadband connectivity

March 31, 2014 (Out Like a Lamb?)

No clear path to NSA reform on Hill

Congress needs to reach a deal on the NSA phone program

The NSA metadata debate: Reform the program or kill it?

Sen Feinstein Gives Tentative Nod to Data Curbs

Sen Wyden urges Barack Obama to end bulk data collection now

Justice-Business Deal on Internet Shows Spy Law Struggle

Open Internet: Clinton vs. Obama

FCC Tweaks Proposal Limiting TV Station Ownership