June 2014

Potential Sprint, T-Mobile marriage threatens consumer gains

[Commentary] Sprint Corp and T-Mobile USA, which only weeks ago were arguing that the government should increase competition in the wireless market by allocating new airwaves to smaller companies like them, are switching sides and looking to join the giants through a merger.

Sprint’s plan to buy T-Mobile for $32 billion is aimed at making the combined company a more formidable competitor to giants Verizon Communications and AT&T, which together claim 68 percent of US wireless subscribers, respectively. The purchase of T-Mobile would almost double Sprint’s market share to about 30 percent.

Just recently, T-Mobile and Sprint succeeded in convincing the Federal Communications Commission to ensure that smaller wireless companies had a shot a buying valuable new wireless airwaves by limiting how much Verizon and AT&T can buy at an auction in 2015. Now the rules that Sprint and T-Mobile fought for may come back to hurt them.

Adding T-Mobile’s spectrum holdings with Sprint’s may put the combined company over the limit that bars it from bidding on the reserved portion of spectrum, which comprises prime frequencies that can travel long distances and penetrate buildings. The Sprint purchase of T-Mobile “certainly would impact the combined company's ability to bid,” Matt Wood, policy director at Free Press, an advocacy group in Washington, DC, that supports the spectrum limits, said. Jeff Silva, an independent telecommunications analyst in Washington, DC, agreed that the merger could make Sprint too big to bid on the reserved frequencies. “That means they won’t get as much spectrum,” he said.

The purchase would also eliminate T-Mobile, the one company that has put pressure on carriers to lower prices. In the last year T-Mobile has cut prices, eliminated two-year contracts and roaming charges, and offered to pay early termination fees for customers who switch from a competitor. Since the company began offering the promotions in the second quarter of 2013, the number of its subscribers increased 11 percent to 49 million compared with a 3.2 percent growth to 122 million for Verizon and a 7.5 percent increase to 116 million for AT&T during the same period, according to data compiled by Strategy Analytics, a technology consulting firm.

Ready For Media Merger Mania? An Analyst Examines Some Possibilities

[Commentary] This is the time of year when deal speculation usually percolates: Moguls always have mergers on their minds as they prepare to huddle in early July at Allen & Co’s Sun Valley gathering for the media elite.

And content companies have to be thinking more seriously than usual about their options. Their bargaining power could soon diminish if Washington regulators allow Comcast to buy Time Warner Cable, AT&T buy DirecTV, and -- perhaps -- Sprint buy T-Mobile. What deals make sense?

Janney Capital Markets’ Tony Wible tiptoed out on a limb today by making a serious attempt to answer the question -- with some potentially surprising conclusions. Here are the ones that seem to offer the greatest strategic and financial benefits: CBS and Viacom; Discovery and Scripps Networks; Disney and Discovery; and, Fox and Time Warner.

Wanted: a watchdog for the mobile medical app explosion

A smartphone app that rids you of acne. Another that monitors your heart rate 24-7. One that detects skin cancer by looking at your birthmarks. If they sound too good to be true, they may be. Patients today use a number of apps that purport to track and treat a panoply of ailments, a headache for regulators and patient safety advocates.

Now, the advent of wearable devices bristling with sophisticated biotracking sensors is stirring concern in the medical community about misdiagnoses that could have serious consequences for consumers.

Some are asking whether Apple and Google should do more to police their fast-growing app marketplaces.

"Most of the health apps out there are built by people with zero medical experience," said Paris Wallace, chief executive officer of Ovuline, a popular fertility app. Worse, many developers don't have the resources for legal counsel, Wallace said, and are more likely to make false claims to patients without seeking FDA clearance.

The Food and Drug Administration in 2013 published guidelines on the kinds of mobile apps it will supervise. But industry insiders fear the agency may get overwhelmed as apps mushroom.

"The FDA wasn't designed for post-market surveillance," said Jason Brooke, chief executive officer and general counsel at Vasoptic Medical, maker of a mobile diagnostic that competes with a number of unregulated apps. The FDA needs to act soon to ensure that developers will "comply on their own."

Administration Overhauls Federal Health-Care Website

The Obama Administration is revamping HealthCare.gov and scrapping significant parts of the federal health-insurance marketplace in an effort to avoid the problems that plagued the site's launch last fall, according to presentations to health insurers and interviews with government officials and contractors.

But the makeover -- and the tight timeline to accomplish it -- are raising concerns that consumers could face another rocky rollout this fall when they return to the site to choose health plans. Some key back-end functions, including a system to automate payments to insurers, are running behind schedule, according to a presentation federal officials made to health insurers. Adding to the pressure, HealthCare.gov is still in the midst of transitioning to new government contractors to manage basic functions.

Among the changes in the new version of HealthCare.gov: a revamp of the site's consumer-facing portion including the application for coverage most people will use, as well as the comparison tool that lets them shop for plans, according to slides from a May 20 meeting for insurers held by the Centers for Medicare and Medicaid Services, which oversees HealthCare.gov. Federal officials told health plans the new versions of some of these functions will need to be tested with insurers before open enrollment begins Nov 15.

June 6, 2014 (Sprint/T-Mobile?)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for FRIDAY, JUNE 6, 2014

Events next week http://benton.org/calendar/2014-06-08--P1W/


INTERNET/BROADBAND
   Public piles on network neutrality debate
   The one thing Netflix and Verizon can agree on when it comes to the open Internet
   Navigating net neutrality analogies - AEI op-ep
   House Republicans Request GAO Examination of Administration Proposal Regarding the Future of the Internet - press release
   Internet TV Delivery Set To Pass Antenna-Only [links to web]
   Republican Senators Warn FCC’s Wheeler Against 'Usurping' State laws
   Sen Markey, Public Knowledge: Public Safety May Require Title II

OWNERSHIP
   Comcast Files Spin-Off Application With FCC
   Shifts in Wireless Market May Sway a Sprint Deal - analysis
   Sprint or T-Mobile: An Easy Call Ahead of Deal - analysis
   Masayoshi Son Presses to Turn Sprint Around
   Why Sprint wants to buy T-Mobile so badly
   Analyst: A Sprint and T-Mobile merger has a 10 percent chance of approval
   AT&T sees 20 percent cut in U-verse content costs after DirecTV merger [links to web]

PRIVACY/SECURITY
   Edward Snowden, a year on: reformers frustrated as NSA preserves its power
   Privacy groups push Senate for stronger NSA reforms [links to web]
   On Anniversary of Snowden Revelations, Senators Look at NSA Bill
   NSA won't abandon phone records program without Congress
   NTIA Seeks Comment on Big Data and the Consumer Privacy Bill of Rights - press release
   Big Brother: Meet the Parents
   US Marshals step in, thwart efforts to learn about cell tracking devices [links to web]
   Cyberbullying Law Challenged in Court [links to web]
   Internet of Things Security Threats Seen by 55% in IT Survey [links to web]
   Congress isn't protecting you from the NSA. Here's how to do it yourself. [links to web]
   Still reeling from Heartbleed, OpenSSL suffers from crypto bypass flaw [links to web]

EMERGENCY COMMUNICATIONS
   Senators Seek GAO Study of Network Resiliency
   FirstNet vexed by shifts in public-safety LTE standards-setting [links to web]

SPECTRUM/WIRELESS
   NTIA Releases Interim Progress Report on Administration’s Plan to Free Up More Spectrum - press release
   FCC Report and Order Addresses Spectrum Changes for Wireless Microphones [links to web]
   Sprint's Hesse says there is no plan to attack wired broadband market in near-term
   The NAB Skewers FCC's Auction Rules [links to web]

CONTENT
   The weird Google searches of the unemployed and what they say about the economy
   The Rich Could Tackle Many Social Ills by Supporting a National Digital-Library Endowment - op-ed [links to web]

HEALTH
   What Do Public Health Officials Want From Big Data? [links to web]

ACCESSIBILITY
   Senator wants closed captioning of in-flight movies [links to web]

JOURNALISM
   One in five journalists has had a credential request denied [links to web]

GOVERNMENT & COMMUNICATIONS
   BBG Broadcasts Reach Record Audiences [links to web]

COMPANY NEWS
   Verizon to Netflix: Here’s a cease-and-desist letter. Can you hear me now?
   Sprint's role as technology outlier may keep it on a road less traveled [links to web]
   Verizon LTE Multicast Mimics Broadcast Model [links to web]

STORIES FROM ABROAD
   Life sentences for serious cyberattacks are proposed in Queen's speech [links to web]
   Ukraine Political Attitudes Split, Crimeans Turning To Russian Sources For News [links to web]
   Web browsing is copyright infringement, publishers argue [links to web]

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INTERNET/BROADBAND

PUBLIC PILES ON NET NEUTRALITY DEBATE
[SOURCE: Politico, AUTHOR: Tony Romm]
A blistering battle over network neutrality has the Federal Communications Commission hearing an earful -- and from more than just the usual torrent of lobbyists and lawyers who swarm the chairman’s eighth-floor office. “Eliminating net neutrality is wrong for America,” warned Carolyn from Kennewick, Washington, one of roughly 69,000 people to write the agency so far about its proposed open Internet rules. “Do not change the Internet,” pleaded David from San Antonio. “In fairness to all users,” added Debie from Gaston, Oregon, “do not allow these gluttonous Internet providers any more corrupting power.” Even beyond the Beltway, critics have pilloried the country’s top telecommunications regulator as it weighs new rules to ensure that all Web traffic is treated equally. The debate over net neutrality has always been controversial and complicated -- for consumers, companies and courts alike. But Chairman Tom Wheeler’s new blueprint has triggered a reaction far more intense than what might typically greet the early stages of an FCC proceeding. Many commenters -- and members of Congress -- bemoan publicly that they have more questions than answers. They fear Chairman Wheeler’s approach might create a Web in which companies or consumers have to pay for faster access to the movies and other content they desire, though the chairman has assured otherwise. Adding to the trouble, intense lobbying from all sides of the fight only has imbued the issue with a new alarmism.
benton.org/node/185564 | Politico
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THE ONE THING NETFLIX AND VERIZON CAN AGREE ON WHEN IT COMES TO THE OPEN INTERNET
[SOURCE: Washington Post, AUTHOR: Brian Fung]
If you've been following the debate about net neutrality, you know that federal regulators have proposed some pretty controversial rules for the Web. These proposed regulations mainly deal with the so-called "last mile" -- the connection between your house and your Internet provider, like Verizon or Comcast. The question here is: should the same openness rules for last-mile connections also apply to the network relationships -- also known as "interconnection" -- between companies in other parts of the Internet? The Federal Communications Commission views the two as entirely different issues, and the agency's network neutrality proposal reflects that. If the FCC someday develops a policy on connections outside the last mile at all, it'll be done separately from net neutrality. Surprisingly, there's a lot more agreement on this issue than you might think between companies like Netflix and Verizon. Even though the two firms advocate different policies, in some ways both believe that the government should treat the backbone like it treats the last mile. A top Verizon executive recently made this argument on C-SPAN, saying the whole debate about Internet fast lanes is a red herring when we already allow payments for better performance in the backbone. Netflix uses much the same logic, but to make the opposite point: If the FCC believes the last mile should be kept free of ISP interference, the same should hold true for the backbone, where Verizon is extracting payments from Netflix. Netflix told the Post that more than 99 percent of its interconnection agreements involve no money.
benton.org/node/185560 | Washington Post
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NAVIGATING NET NEUTRALITY ANALOGIES
[SOURCE: American Enterprise Institute, AUTHOR: Bronwyn Howell]
[Commentary] n the net neutrality debate, commentators such as Susan Crawford have repeatedly called for a “public option for Internet access because Internet access is just like electricity or a road grid”. The argument typically goes along the lines that the Internet is simply a utility, like roads or electricity, so at the very least should be regulated in the same manner as these networks. Alternatively, in some utopian world, they should be owned and operated by governments -- local, state or municipal -- to ensure that they are operated in the ‘public good’. At some point, the issue of needing only one wire to every house is brought up as some sort of justification for this stance. They also argue that, because consumers have paid a (fixed -- i.e. ‘all you can eat’) fee to connect to the network, they are entitled to the uninhibited right to consume as much content as they wish without either themselves or the providers of the content they consume being billed any further. But are the analogies really as simple and useful as these commentators imply? Analogies comparing the Internet to electricity and roads illustrate some of the implications for regulating the Internet. But it is neither simple to consider the Internet in the same way as other utilities, nor axiomatic to invoke incomplete similarities in calls for changes to regulation or ownership. To do so denies the Internet’s unique characteristics and vastly different potential. The Internet IS different and needs to be considered on its own merits where regulation is concerned [Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation and a faculty member of Victoria Business School]
benton.org/node/185562 | American Enterprise Institute
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HOUSE REPUBLICANS REQUEST GAO EXAMINATION OF ADMINISTRATION PROPOSAL REGARDING THE FUTURE OF THE INTERNET
[SOURCE: House of Representatives Commerce Committee, AUTHOR: Press release]
A group of Republican House members wrote the Government Accountability Office (GAO) requesting an examination of the Obama administration’s recent proposal to transition Internet oversight to the global multi-stakeholder community. In March 2014, the National Telecommunications and Information Administration (NTIA), an agency of the Department of Commerce, announced its intention to transition oversight of the Internet Assigned Numbers Authority (IANA) root functions to the global multi-stakeholder community. In the letter, the leaders express concern that the criteria for transition set forth by NTIA may not ensure that the Internet remains free and open in the absence of United States oversight. The members are seeking an examination of the proposed transition and its possible implications to US national security, the potential for other governments to assume the US role post-transition, and any additional concerns the GAO may have about the transition. The letter was signed by Chairman Upton, Subcommittee on Communications and Technology Chairman Rep Greg Walden (R-OR), full committee Vice Chairman Marsha Blackburn (R-TN), and Reps John Shimkus (R-IL), Mike Kelly (R-PA), and Todd Rokita (R-IN).
benton.org/node/185604 | House of Representatives Commerce Committee | read the letter
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REPUBLICAN SENS WARN WHEELER AGAINST 'USURPING' STATE LAWS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Almost a dozen Republican senators say they are deeply troubled by Federal Communications Commission Chairman Tom Wheeler's plan to preempt state laws inhibiting municipal broadband, or what they characterize as usurping states’ rights and forced taxpayer funding of broadband competition. In a letter to Chairman Wheeler dated June 5, the senators -- including Sens Ted Cruz (R-TX) and Marco Rubio (R-FL), both members of the Communications Subcommittee -- referred to Chairman Wheeler's April 30 speech to the National Cable & Telecommunications Association, a group the FCC chairman once headed -- that he believed the FCC had the power and the duty to preempt. The senators said they were deeply concerned that the FCC would "force taxpayer-funded competition against private broadband providers"-- something the cable industry is also concerned about for obvious reasons. They suggested "inserting" the FCC into economic and fiscal affairs in "such a cavalier fashion" was a states' rights issue. They said the states can better protect against unnecessary spending, debt and waste than unelected bureaucrats. Opponents of preemption have argued that the laws are on the books because elected representatives of the people concluded they should be, a point the senators made. "State political leaders are accountable to the voters who elected them, and the Commission would be well-advised to respect state sovereignty," they said. "The last thing the Commission should do in these trying fiscal times, with so many other important priorities, is usurp state policy with respect to municipal broadband,” they said. Also signing on to the letter were Sens. Deb Fischer (R-NE), Ron Johnson (R-WI), Tim Scott (R-SC), Mike Enzi (R-WY), John Barrasso (R-WY), Pat Roberts (R-KS), Lamar Alexander (R-TN), John Cornyn (R-TX), and Tom Coburn (R-OK).
benton.org/node/185598 | Broadcasting&Cable
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SEN MARKEY, PUBLIC KNOWLEDGE: PUBLIC SAFETY MAY REQUIRE TITLE II
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Sen Ed Markey (D-MA) and Public Knowledge both said that classifying broadband as a Title II service could be a public safety must-have. At a hearing in the Senate Communications Subcommittee on the safety and network reliability issues related to the IP transition, Sen Markey (pictured), said he agreed that it may be necessary for the Federal Communications Commission to reclassify broadband under Title II to insure that VoIP 911 calls get completed. In her testimony for the hearing, Public Knowledge senior staff attorney Jodie Griffin said that the DC circuit's decision overturning open Internet rules "called into question the FCC's ability to continue applying certain fundamental policies" to an IP-based phone network, particularly its ability to require VoIP providers to complete all calls, or prohibit them from blocking calls. Sen Markey agreed with Griffin's assertion that unless the FCC can assure that ability to insure core values like access and reliability under Title I, which she suggests the court signaled it can't, the FCC should reclassify.
benton.org/node/185596 | Broadcasting&Cable
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OWNERSHIP

COMCAST FILES SPIN-OFF APPLICATION WITH FCC
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
Comcast has now filed both parts of its proposed merger with Time Warner Cable at the Federal Communications Commission and the heavy lifting on vetting the deal, and comments about the deal, can begin in earnest. Comcast filed with the FCC the public interest statement, exhibits and license applications for its spin-off of 3.9 million customers, which it promised to do to try and assuage concerns about the size of the combined company. A key public interest point the company makes is how the creation of the new company, SpinCo, will bring more competition to the marketplace--while the TWC merger will not reduce it, Comcast has already pointed out. "The SpinCo transaction will create substantial public interest benefits," says Comcast. "While SpinCo will be a new company, it will be larger than all but four other cable companies in the United States and will have a tightly integrated, contiguous service footprint. This scale and geographic scope will facilitate investment in innovation and high-quality services within SpinCo’s footprint. From the outset, SpinCo will be well positioned to compete aggressively in the highly competitive markets for high-speed Internet, voice, and video services." Comcast will not own shares in either Charter or SpinCo after the closing of the spin-off, the company says, and for the first eight years would not be allowed to own more than 1% of SpinCo shares. "In short, SpinCo will be entirely independent of Comcast," the cable operator told the FCC.
benton.org/node/185555 | Multichannel News
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WIRELESS MARKET
[SOURCE: New York Times, AUTHOR: Edward Wyatt]
In the view of Sprint and T-Mobile USA, less is more. A merger of the two companies -- the No. 3 and No. 4 wireless carriers in the country -- would not reduce the number of competitors in the wireless phone market, the deal’s supporters say. Rather, it would add a competitor to a market now dominated by AT&T and Verizon. That argument will almost surely get a stiff test in the coming months, as Sprint and T-Mobile USA have reportedly settled on the terms of a $32 billion deal that is likely to be unveiled this summer. The deal, if made, would reach the desk of skeptical antitrust regulators. The regulators’ concerns have, in part, delayed talks between the two companies in the last couple of years. With two regulators steadfastly opposed to a deal, what might possess a company to try — especially since Sprint is said to be willing to pay T-Mobile $1 billion if a deal is stopped? One answer, Sprint backers say, is that it must reach a deal now to compete with AT&T and Verizon. But another answer, antitrust experts say, could be that the communications world is different than it was just four months ago, and different enough that regulators will change their minds. The cellular market now bears little resemblance to the market of 2011, when the Justice Department squashed AT&T’s dreams of buying T-Mobile’s wireless business in the United States, saying the reduction in competition would be damaging.
benton.org/node/185622 | New York Times
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SPRINT NEEDS THE DEAL MORE
[SOURCE: Wall Street Journal, AUTHOR: Miriam Gottfried]
Sprint and T-Mobile US have moved one step closer to the altar. But as they don their wedding finery, one looks more attractive than the other. But the deal's chances of regulatory approval look dim -- with far worse implications for Sprint than for T-Mobile. Regulators have been explicit in expressing opposition to a merger. And while one Federal Communications Commission member, Jessica Rosenworcel, has reportedly indicated she will keep an open mind on it, steep Justice Department skepticism remains. Considering the high probability of rejection, investors must weigh Sprint's value as a stand-alone company against the value of touted deal synergies, perhaps more than $3.5 billion annually, UBS estimates. Sprint trades at 9.3 times calendar 2014 earnings before interest, taxes, depreciation and amortization -- against 7.8 times for T-Mobile -- and has been losing subscribers to competitors. Sprint's revenue is expected to fall for the next two fiscal years. If it remains a spinster and its multiple falls to, say, seven times, its stock could tumble to around $6 from today's $9 and change.
benton.org/node/185620 | Wall Street Journal
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SON PRESSES TO TURN SPRINT AROUND
[SOURCE: Wall Street Journal, AUTHOR: Ryan Knutson]
Nearly a year after the $22 billion SoftBank acquisition closed, Sprint is far from upsetting the US market. Instead, it is hemorrhaging customers amid a tricky network upgrade and stepped up competition from rivals. It still is early in SoftBank's ownership of Sprint, and bigger changes in strategy and tactics could be coming. But smaller rival T-Mobile US beat Sprint to the punch, using SoftBank-like tactics of aggressive marketing and creative pricing to reverse years of subscriber losses and challenge market leaders Verizon and AT&T. Against the backdrop of that performance, Masayoshi Son now is pursuing his second big US wireless deal in less than a year, an acquisition of T-Mobile that would value the company around $32 billion, people familiar with the matter said. The diverging fortunes of the two companies highlight the risks for Sprint if the effort fails and the company is forced to stand alone, as well as the concerns of regulators who value the competitive spark that T-Mobile has brought to the highly concentrated industry.
benton.org/node/185619 | Wall Street Journal
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WHY SPRINT WANTS TO BUY T-MOBILE SO BADLY
[SOURCE: Washington Post, AUTHOR: Brian Fung]
You may have heard Sprint is edging closer to an acquisition of T-Mobile. What's this all about, and how does it affect people like you and me? If the deal goes through, T-Mobile would be eliminated from the marketplace, and consumers would lose a newly resurgent player who's willing to needle the nation's largest carriers. To some regulators, that's a compelling argument not to approve a Sprint-T-Mobile merger. But Sprint claims that it needs to merge with T-Mobile precisely so it can better compete against Verizon and AT&T. Could snapping up the nation's fourth-largest wireless carrier actually improve competition rather than worsen it? To understand what's happening, we need to look at the other companies that operate in this space. Sprint's chairman, Masayoshi Son, has called the current marketplace a duopoly. Regulators have said they like having four national carriers rather than three. Eliminating T-Mobile might concentrate too much power in the hands of a few.
benton.org/node/185588 | Washington Post
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ANALYST: A SPRINT AND T-MOBILE MERGER HAS A 10 PERCENT CHANCE OF APPROVAL
[SOURCE: Washington Post, AUTHOR: Brian Fung]
That Sprint wants to buy T-Mobile is pretty much the telecom industry's worst-kept secret right now. The two companies reportedly turned a corner in their negotiations: Reports suggest the two companies have settled on general terms for a deal, around $40 a share -- or about $32 billion -- with a $1 billion break-up fee if the merger doesn't go through. The feds seem largely skeptical of yet another tech merger on top of Comcast-Time Warner Cable and AT&T-DirecTV. In fact, it's such a long shot that a top telecom analyst thinks there's only a 10 percent chance that the Justice Department and the Federal Communications Commission will give Sprint-T-Mobile a green light. "Softbank has apparently concluded that its odds of success are greater now -- while the FCC and DOJ are simultaneously reviewing Comcast/TWC and AT&T/DTV -- than they would be later," New York-based Moffett Nathanson wrote in a research note. "But realpolitik says otherwise. Approving all three would be untenable for the left. Rejecting all three would be untenable for the right. At least one of the three would have to be rejected. And it's easy to see which one of the three it would be."
benton.org/node/185558 | Washington Post
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PRIVACY/SECURITY

EDWARD SNOWDEN, A YEAR ON: REFORMERS FRUSTRATED AS NSA PRESERVES ITS POWER
[SOURCE: The Guardian, AUTHOR: Spencer Ackerman]
In May 2013, it looked as though privacy advocates had scored a tenuous victory against the widespread surveillance practices exposed by Edward Snowden a year ago. Then came a resurgent intelligence community, armed with pens, and dry, legislative language. During several protracted sessions in secure rooms in the Capitol, intelligence veterans, often backed by the congressional leadership, sparred with House aides to abridge privacy and transparency provisions contained in the first bill rolling back National Security Agency spying powers in more than three decades. The episode shows the lengths to which the architects and advocates of bulk surveillance have gone to preserve their authorities in the time since the Guardian, 12 months ago, began disclosing the scope of NSA data collection. That resistance to change, aided by the power and trust enjoyed by the NSA on Capitol Hill, helps explain why most NSA powers remain intact a year after the largest leak in the agency's history. "This is not how American democracy is supposed to work," said Congresswoman Zoe Lofgren (D-CA), who had supported the bill but ultimately voted against it. Senior leaders at the agency say that Snowden thrust them into a new era. James Clapper, the director of US national intelligence, said the intelligence agencies need to grant a greater degree of transparency or risk losing public confidence permanently. But exactly one year on, the agency, under public pressure, has divested itself of exactly one activity, the bulk collection of US phone data. Yet while the NSA will not itself continue to gather the data directly, the major post-Snowden legislative fix grants the agency wide berth in accessing and searching large volumes of phone records, and even wider latitude in collecting other kinds of data. There are no other mandated reforms. President Barack Obama in January added restrictions on the dissemination of non-Americans' "personal information", but that has not been codified in law. The coalition of large Internet firms demanding greater safeguards around their customers’ email, browsing and search histories have received nothing from the government for their effort. A recent move to block the NSA from undermining commercial encryption and amassing a library of software vulnerabilities never received a legislative hearing. While there have also been significant commercial changes brought by companies that fear the revelations imperiling their businesses -- Google's Gmail service broadened its use of encryption, will soon present end-to-end encryption for its Chrome browser; and after the Washington Post revealed that the NSA intercepts data transiting between Google and Yahoo storage centers, Google expanded encryption for Gmail data flowing across the Internet and Yahoo implemented default email encryption -- the bitterest disappointment has been the diminished ambitions for surveillance reform contained in the USA Freedom Act. "That," Jameel Jaffer, the ACLU’s deputy legal director, said, "was a very frustrating process for us."
benton.org/node/185552 | Guardian, The | National Public Radio | The Hill | Huffington Post | CNBC
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ON ANNIVERSARY OF SNOWDEN REVELATIONS, SENATORS LOOK AT NSA BILL
[SOURCE: Revere Digital, AUTHOR: Amy Schatz]
Senate lawmakers expressed doubt about legislation to overhaul the National Security Agency’s bulk-data collection program as the US marked the first anniversary of surveillance revelations from whistleblower Edward Snowden. In May, the House overwhelmingly passed the USA Freedom Act, legislation that would move bulk data collection from the NSA to phone companies. It’s not clear yet what the Senate will do about the legislation. Senate Judiciary Committee Chairman Patrick Leahy (D-VT) said that he “will fight for a stronger USA Freedom Act” which “bans bulk collection of data, provides greater accountability and improves transparency.” But members of another Senate committee with jurisdiction over the intelligence community -- the Senate Intelligence Committee -- took a dimmer view of the proposed NSA bulk data collection overhaul during a hearing on the legislation. Senate Intelligence Committee members have often been more tolerant of the intelligence community’s surveillance efforts, so it’s not surprising members of both parties expressed reservations about the legislation. More notable will be what other Senators without ties to the intelligence community say about it. Several Republicans on the intelligence committee questioned whether changes are needed at all. “We all need to step back and ask ourselves whether all of these changes are really necessary,” said Sen Saxby Chambliss (R-GA) during the hearing. Sen Dan Coats (R-IN) said “there has been significant misrepresentation of the current program” and urged his colleagues to make sure any legislation doesn’t “compromise our ability to detect and thwart threats against American citizens.” Notably, Senate Intelligence Committee Chairwoman Dianne Feinstein (D-CA) said the bipartisan House passage of the NSA bill sent “a very loud signal” to the Senate and said she believes her colleagues should look at the House legislation “with a view of its passage perhaps as amended through the Senate.”
benton.org/node/185615 | Revere Digital | The Hill | The Hill
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NSA WON'T ABANDON PHONE RECORDS PROGRAM WITHOUT CONGRESS
[SOURCE: The Hill, AUTHOR: Julian Hattem, Kate Tummarello]
The Obama Administration has ruled out using internal administrative policy to reform controversial federal surveillance programs, a top Justice Department official said. Officials have not tried to persuade the country’s surveillance court to change its understanding of the law, Deputy Attorney General James Cole told lawmakers on the Senate Intelligence Committee, and do not plan to replace a National Security Agency (NSA) program with other ways to collect data about Americans. “We think that our choices at this point really come down to what has been approved by the courts over a number of years, new legislation or else not having the tools at all,” he said. Attorney General Cole’s statement came in response to a question from Sen Mark Udall (D-CO), a critic of the NSA's surveillance, who claimed that the administration “has the tools it needs” through other methods to protect national security while also not violating their privacy. Opponents of the NSA’s program to collect records about people’s phone calls say that the federal government could abandon the program and use other means, such as national security letters, to collect the data. “The current law gives the government broad authority right now -- right now-- to obtain records quickly,” Sen Ron Wyden (D-OR), another critic of the government surveillance, told Attorney General Cole. “The fact that this dragnet surveillance is taking place right now is unacceptable to me.”
benton.org/node/185613 | Hill, The
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NTIA SEEKS COMMENT ON BIG DATA AND THE CONSUMER PRIVACY BILL OF RIGHTS
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Press release]
The US. Commerce Department’s National Telecommunications and Information Administration (NTIA) is seeking public comment on how developments related to “big data” impact the Consumer Privacy Bill of Rights. The NTIA has issued a Request for Comments on how issues raised by big data impact the Consumer Privacy Bill of Rights, the Obama Administration’s framework for privacy protections released in February 2012. The most recent action was called for in the White House’s big data and privacy working group report on how big data is transforming the way we live and work. Counselor to the President John Podesta convened senior government officials, including US Secretary of Commerce Penny Pritzker, to conduct the wide-ranging review of big data and privacy, and the group presented its findings to President Obama on May 1. Specifically, NTIA is seeking comment on:
How the principles in the Consumer Privacy Bill of Rights support innovations related to big data while also responding to potential privacy risks;
Whether the Consumer Privacy Bill of Rights should be clarified or modified to better accommodate the benefits or risks of big data;
Whether a responsible use framework should be used to address the challenges posed by big data; and
Mechanisms to best address the limits of the “notice and consent” model for privacy protection noted in the big data report.
benton.org/node/185606 | National Telecommunications and Information Administration | NTIA
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BIG BROTHER: MEET THE PARENTS
[SOURCE: Politico, AUTHOR: Stephanie Simon]
Moms and dads from across the political spectrum have mobilized into an unexpected political force in recent months to fight the data mining of their children. In a frenzy of activity, they’ve catapulted student privacy — an issue that was barely on anyone’s radar up until now -- to prominence in statehouses from New York to Florida to Wyoming. Now, parents are rallying against another perceived threat: huge state databases being built to track children for more than two decades, from as early as infancy through the start of their careers. Promoted by the Obama Administration, the databases are being built in nearly every state at a total cost of well over $1 billion. They are intended to store intimate details on tens of millions of children and young adults -- identified by name, birth date, address and even, in some cases, Social Security number -- to help officials pinpoint the education system’s strengths and weaknesses and craft public policy accordingly. “Every parent I’ve talked to has been horrified,” said Leonie Haimson, a New York mother who is organizing a national Parent Coalition for Student Privacy. “We just don’t want our kids tracked from cradle to grave.” Eager to support technological innovation and wary of new regulations, Congress has taken little notice of parent concerns. But state legislators have raced to respond. Since January, 14 states have enacted stricter student privacy protections, often with overwhelming bipartisan support, and more are likely on the way.
benton.org/node/185602 | Politico
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EMERGENCY COMMUNICATIONS

SENATORS SEEK GAO STUDY OF NETWORK RESILIENCY
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In advance of the Senate Communications Subcommittee hearing June 5 on the IP transition, Subcommittee Chairman Mark Pryor (D-AK), Sen Bill Nelson (D-FL), chair of the Subcommittee on Science and Space, and parent Commerce Committee Chairman Sen Jay Rockefeller (D-WV) have asked the Government Accountability Office to study how the communications sector plans to "guarantee" resiliency and reliability as they transition to new technologies. The senators want the following questions answered:
To what extent has the communications sector transitioned from traditional copper-based networks to IP networks?
As part of the nation’s critical infrastructure, what action has the federal government taken to ensure the reliability and robustness of communication networks that have transitioned to IP?
What key challenges do IP network operators face during times of crises and how do the challenges affect consumers?
To what extent do priority access programs for emergency preparedness communications exist for IP networks?
benton.org/node/185548 | Broadcasting&Cable
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SPECTRUM/WIRELESS

NTIA RELEASES INTERIM PROGRESS REPORT ON ADMINISTRATION’S PLAN TO FREE UP MORE SPECTRUM
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Press release]
NTIA released the Fourth Interim Progress Report on the Obama Administration’s initiative to identify and make available 500 megahertz of federal and non-federal spectrum for commercial wireless broadband use by 2020. This report also includes a plan for federal agencies to conduct quantitative assessments of their actual spectrum usage in 960 megahertz of additional spectrum, as directed in President Obama’s June 2013 Memorandum. America’s future competitiveness and global technology leadership depend on access to radio spectrum -- the lifeblood of smartphones, tablets, and other data-hungry wireless devices. The key accomplishments in the 2013 fiscal year include the following:
NTIA’s Commerce Spectrum Management Advisory Committee concluded its groundbreaking work to explore relocation alternatives and spectrum sharing arrangements between federal agencies and commercial mobile broadband systems in the 1695-1710 MHz and 1755-1850 MHz bands.
NTIA released regulations and guidance implementing changes to the Commercial Spectrum Enhancement Act (CSEA) that provide eligible federal agencies incentives and financial assistance to facilitate the transition of the reallocated federal bands that the FCC will auction.
NTIA published an initial assessment on spectrum-sharing technologies and the risk to federal users if Unlicensed-National Information Infrastructure (U-NII) devices were authorized to operate in the 5350-5470 MHz and 5850-5925 MHz bands (5 GHz).
NTIA, in collaboration with other federal agencies, developed the plan for federal agencies to provide quantitative assessments of their usage of spectrum in selected frequency bands.
The FCC initiated or concluded rulemaking proceedings for several spectrum bands and services, including H Block and AWS-4 services.
benton.org/node/185608 | National Telecommunications and Information Administration | NTIA
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SPRINT'S HESSE SAYS THERE IS NO PLAN TO ATTACK WIRED BROADBAND MARKET IN NEAR-TERM
[SOURCE: Fierce, AUTHOR: Phil Goldstein]
Sprint CEO Dan Hesse said he does not see the carrier going head-to-head in the near-term with the likes of Comcast, Verizon Communications and AT&T in the market for wired home broadband Internet access. Hesse's comments, made during a Sprint meeting with industry analysts and relayed by an analyst, stand in contrast to the long-term vision of Sprint Chairman and SoftBank CEO Masayoshi Son, who has said Sprint could eventually compete in and shake up the wired broadband market in the US. According to Jackdaw Research analyst Jan Dawson, Hesse said that Sprint isn't planning to go after the home broadband market actively, and that it would be difficult to make money in that market, especially given how much video wired broadband customers tend to use. AT&T, for instance has said its average, non-U-verse broadband customers use around 21 GB of data per month; overall average monthly usage on North American fixed access networks was 51.4 GB, according to a May study from network vendor Sandvine. Those numbers are much bigger than the average monthly data consumption by wireless phone users. Dawson said that Sprint is simply focused on other business priorities right now and does not plan to aggressively compete in the home broadband market. He said that such a plan is "not on the roadmap" right now but could be somewhere down the line as the carrier expands its Spark service and increases speeds. For now though, Dawson said, Hesse was acknowledging that Sprint's spectrum position and the realities of deploying Spark make it infeasible to actually enact Son's vision. "The difference is between the strategic vision Masa Son is laying and the operational reality of running the Sprint business today with the spectrum holdings they have," he said.
benton.org/node/185584 | Fierce
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CONTENT

THE WEIRD GOOGLE SEARCHES OF THE UNEMPLOYED AND WHAT THEY SAY ABOUT THE ECONOMY
[SOURCE: Washington Post, AUTHOR: Ylan Mui]
If you really want to know how the economy is doing now, just Google it. At least that’s the goal of a growing number of researchers who are turning to big data in hopes of unlocking the secrets of the economy at the speed of the Internet. The movement -- dubbed “nowcasting” -- is piquing the interest of policymakers in Washington and around the world frustrated by the long lag in official government statistics as they make decisions where timing is everything. Want to figure out where prices are headed in 86 countries on a given day? A project at the Massachusetts Institute of Technology tracks them at thousands of retailers. How many people will file for unemployment benefits in one week? Economists at the University of Michigan are tapping Twitter to estimate the number of new applicants. Are more young men finding jobs? Google suggests the incidence of searches for adult entertainment can provide a clue. “Statistics serve us really well and are completely essential as benchmarks for where the economy is -- or more precisely, has been,” said Matthew Shapiro, an economist at the University of Michigan working on the Twitter project. “But we don’t have a lot of indicators that tell us what’s happening right now, particularly when the economy is changing direction.” The government’s meticulous method of collecting data still relies heavily on phone conversations with families and businesses. Though its numbers are considered the gold standard, the aftermath of the Great Recession has shown the data can come too late for policymakers at crucial moments in the recovery. In the midst of the recession, Google’s chief economist Hal Varian released a paper showing how to use the company’s search data to measure auto sales and consumer spending, among other things. Now, researchers both inside and outside of government are using it to estimate everything from unemployment to mortgage delinquencies.
benton.org/node/185576 | Washington Post
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COMPANY NEWS

VERIZON TO NETFLIX: HERE’S A CEASE-AND-DESIST LETTER. CAN YOU HEAR ME NOW?
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Verizon is threatening to sue Netflix in the latest tit-for-tat between the companies over a controversial error message some Netflix subscribers have been seeing. A cease-and-desist letter by Verizon calls Netflix's new error message -- which blames Verizon's network for laggy downloads -- "deceptive" and "false," arguing that Netflix's claims could potentially harm Verizon's business. "In light of this, Verizon demands that Netflix immediately cease and desist from providing any such further 'notices' to users of the Verizon network," the company wrote. The firestorm began when Vox Media developer (and former Washington Post staffer) Yuri Victor tweeted an image of Netflix's error message. The post quickly gained traction on social media, and prompted Verizon to complain in a blog post that the streaming video company was being misleading. Evidently, Verizon thought Netflix wasn't taking the warning seriously. "We further demand," Verizon's letter continued, "that within five days … Netflix provide Verizon with any and all evidence and documentation that it possesses substantiating Netflix's assertion to Mr. Yuri Victor that his experience in viewing a Netflix video was solely attributable to the Verizon network."
benton.org/node/185600 | Washington Post | The Verge | Reuters | Revere Digital | USAToday | Multichannel News
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Shifts in Wireless Market May Sway a Sprint Deal

In the view of Sprint and T-Mobile USA, less is more. A merger of the two companies -- the No. 3 and No. 4 wireless carriers in the country -- would not reduce the number of competitors in the wireless phone market, the deal’s supporters say. Rather, it would add a competitor to a market now dominated by AT&T and Verizon. That argument will almost surely get a stiff test in the coming months, as Sprint and T-Mobile USA have reportedly settled on the terms of a $32 billion deal that is likely to be unveiled this summer.

The deal, if made, would reach the desk of skeptical antitrust regulators. The regulators’ concerns have, in part, delayed talks between the two companies in the last couple of years. With two regulators steadfastly opposed to a deal, what might possess a company to try — especially since Sprint is said to be willing to pay T-Mobile $1 billion if a deal is stopped? One answer, Sprint backers say, is that it must reach a deal now to compete with AT&T and Verizon. But another answer, antitrust experts say, could be that the communications world is different than it was just four months ago, and different enough that regulators will change their minds. The cellular market now bears little resemblance to the market of 2011, when the Justice Department squashed AT&T’s dreams of buying T-Mobile’s wireless business in the United States, saying the reduction in competition would be damaging.

Sprint or T-Mobile: An Easy Call Ahead of Deal

Sprint and T-Mobile US have moved one step closer to the altar. But as they don their wedding finery, one looks more attractive than the other.

The deal's chances of regulatory approval look dim -- with far worse implications for Sprint than for T-Mobile. Regulators have been explicit in expressing opposition to a merger. And while one Federal Communications Commission member, Jessica Rosenworcel, has reportedly indicated she will keep an open mind on it, steep Justice Department skepticism remains. Considering the high probability of rejection, investors must weigh Sprint's value as a stand-alone company against the value of touted deal synergies, perhaps more than $3.5 billion annually, UBS estimates. Sprint trades at 9.3 times calendar 2014 earnings before interest, taxes, depreciation and amortization -- against 7.8 times for T-Mobile -- and has been losing subscribers to competitors. Sprint's revenue is expected to fall for the next two fiscal years. If it remains a spinster and its multiple falls to, say, seven times, its stock could tumble to around $6 from today's $9 and change.

Masayoshi Son Presses to Turn Sprint Around

Nearly a year after the $22 billion SoftBank acquisition closed, Sprint is far from upsetting the US market. Instead, it is hemorrhaging customers amid a tricky network upgrade and stepped up competition from rivals.

It still is early in SoftBank's ownership of Sprint, and bigger changes in strategy and tactics could be coming. But smaller rival T-Mobile US beat Sprint to the punch, using SoftBank-like tactics of aggressive marketing and creative pricing to reverse years of subscriber losses and challenge market leaders Verizon and AT&T. Against the backdrop of that performance, Masayoshi Son now is pursuing his second big US wireless deal in less than a year, an acquisition of T-Mobile that would value the company around $32 billion, people familiar with the matter said. The diverging fortunes of the two companies highlight the risks for Sprint if the effort fails and the company is forced to stand alone, as well as the concerns of regulators who value the competitive spark that T-Mobile has brought to the highly concentrated industry.

On Anniversary of Snowden Revelations, Senators Look at NSA Bill

Senate lawmakers expressed doubt about legislation to overhaul the National Security Agency’s bulk-data collection program as the US marked the first anniversary of surveillance revelations from whistleblower Edward Snowden.

In May, the House overwhelmingly passed the USA Freedom Act, legislation that would move bulk data collection from the NSA to phone companies. It’s not clear yet what the Senate will do about the legislation.

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) said that he “will fight for a stronger USA Freedom Act” which “bans bulk collection of data, provides greater accountability and improves transparency.” But members of another Senate committee with jurisdiction over the intelligence community -- the Senate Intelligence Committee -- took a dimmer view of the proposed NSA bulk data collection overhaul during a hearing on the legislation.

Senate Intelligence Committee members have often been more tolerant of the intelligence community’s surveillance efforts, so it’s not surprising members of both parties expressed reservations about the legislation. More notable will be what other Senators without ties to the intelligence community say about it. Several Republicans on the intelligence committee questioned whether changes are needed at all.

“We all need to step back and ask ourselves whether all of these changes are really necessary,” said Sen Saxby Chambliss (R-GA) during the hearing. Sen Dan Coats (R-IN) said “there has been significant misrepresentation of the current program” and urged his colleagues to make sure any legislation doesn’t “compromise our ability to detect and thwart threats against American citizens.”

Notably, Senate Intelligence Committee Chairwoman Dianne Feinstein (D-CA) said the bipartisan House passage of the NSA bill sent “a very loud signal” to the Senate and said she believes her colleagues should look at the House legislation “with a view of its passage perhaps as amended through the Senate.”

NSA won't abandon phone records program without Congress

The Obama Administration has ruled out using internal administrative policy to reform controversial federal surveillance programs, a top Justice Department official said.

Officials have not tried to persuade the country’s surveillance court to change its understanding of the law, Deputy Attorney General James Cole told lawmakers on the Senate Intelligence Committee, and do not plan to replace a National Security Agency (NSA) program with other ways to collect data about Americans.

“We think that our choices at this point really come down to what has been approved by the courts over a number of years, new legislation or else not having the tools at all,” he said.

Attorney General Cole’s statement came in response to a question from Sen Mark Udall (D-CO), a critic of the NSA's surveillance, who claimed that the administration “has the tools it needs” through other methods to protect national security while also not violating their privacy. Opponents of the NSA’s program to collect records about people’s phone calls say that the federal government could abandon the program and use other means, such as national security letters, to collect the data.

“The current law gives the government broad authority right now -- right now-- to obtain records quickly,” Sen Ron Wyden (D-OR), another critic of the government surveillance, told Attorney General Cole. “The fact that this dragnet surveillance is taking place right now is unacceptable to me.”