June 2014

FCC Adopts Rules for First Ever Incentive Auction; Will Make Available Additional Airwaves, Increase Competition For Mobile Broadband

The Federal Communications Commission adopted rules to implement the Broadcast Television Incentive Auction. The two-sided auction will use market forces to recover spectrum from television broadcasters who voluntarily choose to give up some or all of their spectrum usage rights in exchange for incentive payments, in order to auction new spectrum licenses to wireless providers.

The Incentive Auction will help meet consumers’ skyrocketing demand for mobile broadband services.

Across the country, in both rural and urban areas, consumers and businesses expect to have access to wireless connectivity anywhere, anytime. Today, there are more connected devices than there are people in the US, and about 60 percent of Americans use data-hungry smartphones. By making more spectrum available for mobile broadband use, the Incentive Auction will benefit consumers by easing congestion on wireless networks, expediting the development of new, more robust wireless services and applications and helping fill in coverage gaps particularly in rural America.

Broadcasters that choose to participate in the auction will bid to receive some of the proceeds from auctioning that spectrum to wireless providers. The auction is a once in a lifetime opportunity for broadcasters, but the decision of whether or not to participate is entirely voluntary.

The adopted rules establish the foundation for the incentive auction. Based on these rules the FCC will develop and seek additional public input on detailed, final auction procedures in the pre-auction process.

There are four parts to the rules implementing the Incentive Auction:

  1. The reorganized 600 MHz Band, including repacking and unlicensed operations;
  2. The Incentive Auction process and design;
  3. The post-auction transition for all incumbents in the 600 MHz band; and
  4. Post-transition regulatory issues, including channel sharing.

Specifically, the report and order addresses the 600 MHz band plan, incentive auction design, post-auction transition, and post-auction regulatory issues.

NAA Pushes For Senate Shield Law

The Newspaper Association of America is urging the Senate to bring a shield law bill to the floor for a vote after the Supreme Court declined to review New York Times' journalist James Risen's appeal of a court ruling that he had no right to refuse to reveal confidential sources.

The Free Flow of Information Act has twice passed the House, only to get bogged down in the Senate. But a Senate version passed out of the Judiciary committee for the first time last fall in the shadow of the NSA information-gathering revelation, attendant WikiLeaks government data drops and Justice's subpoenas of reporter phone records, leading to hope that a federal shield law -- to match that in 49 states -- might finally pass.

The Free Flow of Information Act (S.987) is sponsored by Sens Charles Schumer (D-NY) and Lindsey Graham (R-SC), and was pushed for years by the late Pennsylvania Republican (and former Democratic) Senator Arlen Specter. It would protect reporters from being forced to identify sources by overzealous government officials, with carve-outs for national security, imminent threat of death or bodily harm, destruction of critical infrastructure, and other special circumstances. The bill also covers government efforts to obtain information from Internet service providers or ISPs.

Debmar-Mercury, Gannett Form Programming Partnership

Gannett Broadcasting and Debmar-Mercury have formed a partnership to develop, produce, test and distribute first-run broadcast series for a variety of dayparts, said Dave Lougee , president of Gannett Broadcasting, and Mort Marcus and Ira Bernstein, copresidents of Debmar-Mercury.

The partnership gives Gannett Broadcasting the ability to create, test and perfect first-run syndicated television programming across all genres on many of its stations beginning in 2015. The development and distribution partnership will focus specifically on incorporating interactivity -- the ability to engage the viewing audience with the show -- into new shows.

Gannett plans to leverage the robust digital presence, including mobile, of its stations to reach viewers wherever they are. This deal is structured to allow the partners to develop and test the shows on Gannett stations throughout the year in various time periods and various lengths of time

AT&T And Sprint Seek FCC Consent To The Assignment Of WCS Licenses

New Cingular Wireless PCS, an indirect wholly-owned subsidiary of AT&T, and Unrestricted Subsidiary Funding Company, a wholly-owned subsidiary of Sprint, and together with AT&T have filed an application pursuant to section 310(d) of the Communications Act of 1934, seeking to assign 19 A and B Block Wireless Communications Service (WCS) licenses to AT&T from Sprint.

The proposed transaction involves only the assignment of spectrum; no subscribers would be transferred. AT&T states that the proposed license assignments would facilitate the transition of WCS spectrum to mobile broadband use and allow AT&T to make more efficient use of spectrum to provide new and better services to customers.

Preliminary review indicates that, as a result of the instant transaction, AT&T would be assigned 10 to 20 megahertz of WCS A and B Block spectrum in 713 counties in all or parts of 153 Cellular Market Areas across parts of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, Oklahoma, South Carolina, Tennessee, and Texas. Post-transaction, AT&T would hold 36 to 165 megahertz of spectrum in total in these 713 counties.

CNBC Isn't Offering Nielsen Ratings Guarantees During the Day Anymore

CNBC, the financial news network, is done with daytime Nielsen ratings.

"They are no longer guaranteeing the business day, which is the most important daypart for a financial client," a source told Adweek. "They believe that their primary business day viewing is done in offices and therefore not monitored by Nielsen and underrepresented."

Asked whether the company was abandoning Nielsens for daytime, the network offered the following from Seth Winter, evp, news and sports ad sales group: "While we completely agree that CNBC's core audience remains virtually unmeasured by current traditional metrics, our agreements with our clients are confidential," Winter wrote. "As we continue to explore the best measurement opportunities, our conversations with clients include new metrics that accurately demonstrate the power of the CNBC audience."

A source said the network has told advertisers that only half its clients asked for guarantees, anyway. That probably worked out very well for that half, because if you're getting your deliveries regardless of ratings and your price is pegged to ratings guarantees, you may have gotten make-goods in 2013 even though you were reaching your audience.

It seems that CNBC has decided to put its money where its mouth is and withdraw guarantees for the daytime, which is a crucial daypart for most people anxious to reach the network's demographics. Instead, said a source close to the network, the company is offering guarantees based on its own internal measurement of ad deliveries.

Feds go after hackers who demand ransom

The Department of Justice is cracking down on hackers in Russia and Ukraine who, officials say, are making millions of dollars by stealing bank information and holding computer files for ransom.

The agency announced efforts to disrupt two cyber crime programs -- “Cryptolocker” and “Gameover Zeus” -- allegedly developed and run by a “tightly knit gang of cyber criminals based in Russia and Ukraine” led by Russian Evgeniy Mikhailovich Bogachev.

Cryptolocker is a “ransomware” tool that encrypts a computer’s files until the owner pays a ransom. According to the agency, the ransomware has infected more than 234,000 computers, half of which are in the US. The release cites one estimate “that more than $27 million in ransom payments were made in just the first two months since Cryptolocker emerged” and said that the FBI seized the servers being used as “control hubs” for the ransomware.

The “Gameover Zeus” botnet is a malware network used to steal millions of dollars by capturing banking credentials. The botnet also was a common distribution tool for the Cryptolocker software, according to the agency. According to the release, between 500,000 and 1 million computers world wide are infected with Gameover Zeus, and 25 percent of those infected computers are in the US.

In addition to bringing charges against Bogachev for his alleged role as administrator of Gameover Zeus and Cryptolocker, the US government obtained civil and criminal court orders authorizing agencies to take steps to mitigate damage caused by these programs, including obtaining the IP addresses of affected computers.

Big Data’s Coming Role In Cybersecurity

Every day, people, machines and the world’s growing multitude of sensors create more than 2.5 exabytes of data -- that’s a 2.5 followed by 18 zeros -- a bonanza of bits and bytes that is in many ways a double-edged sword.

On one hand, private sector companies and the government are able to collect more data than ever for analysis -- ideally, that’s a great thing. Never in human history has humanity had access to the kinds of data it does now. Yet big data sets are also attractive to hackers and malicious actors who see more data as more money or intelligence to steal.

The two disciplines -- cybersecurity and big data -- are beginning to meld so that it’s difficult to talk about one without the other. Agencies across government are learning to better detect and analyze cyber threats, and one of the ways they are doing so involves big data.

For example, agencies might sift through huge piles of data as they monitor traffic in and out of a network in real time to detect potentially adversarial anomalies. It takes a lot of technological horsepower to analyze that information, but the insight it provides could be the difference between a massive leak or media frenzy and business as usual.

John Oliver Compares Comcast to a Drug Cartel (Video)

John Oliver, host of “Last Week Tonight,” did what he himself had deemed impossible: Make the debate over net neutrality, and the possibility of losing the open Internet, actually seem interesting and important.

Oliver was riled up enough to spend nearly half his show discussing the Federal Communications Commission's impending regulatory white flag that would allow Internet provider behemoths like Comcast and Time Warner to charge companies -- and ultimately, consumers -- more money for service that isn't entirely awful.

It was an impressive display that made the players and consequences actually compelling, tying big names and classic themes (drug dealing, mobsters, dingos eating babies) to the tech controversy.

Oliver spread the blame and insults around quite liberally (once again taking advantage of the lack of language restrictions on cable), hitting FCC Chair (and former cable company lobbyist) Tom Wheeler, President Barack Obama (for nominating Wheeler as chairman and buddying up to Comcast CEO Brian Roberts), Comcast and its nauseating corporate spin (for being misleading), C-Span (for being so boring), and Internet commenters (for just generally being crazy).

How is it exactly that cable companies in the US don’t compete?

[Commentary] One of the arguments made in the proposed Comcast-Time Warner merger is that these two, very large cable companies do not actually compete.

They are in different markets. This is something Tyler Cowen, for example, has pushed as a reason the merger should go ahead.

Now this might be a good argument as to why, straight out horizontal stories won’t cut it to prevent this merger and we would have to look elsewhere. But what should cause us to have pause was an issue raised in this excellent commentary on the state of the industry by John Oliver. The part I want to address is where John Oliver asks: how is it that cable companies are not competing? Potential competitors stay out of each other’s turf and divide the market.

This type of collusion is understudied in economics and, indeed, one of the implications is that it has consequences for mergers. Thus, those who say Comcast and Time Warner should merge because they don’t compete should also explain precisely why they don’t now and ought not to compete in the future.

The FCC’s IP Trials: How Service Providers Can Get Involved

On January 30, 2014, the Federal Communications Commission published an order for the creation of trial experiments meant to shape the way the nation’s communications networks provide services during this new era of technological transformation.

These experiments are a way to ensure that the traditional capabilities and values of the telecommunications industry continue after service providers transform their networks to an all-IP architecture. Some of the core guidelines are:

  • All Americans must continue to have access to affordable communications services
  • Public safety services must be made available regardless of the underlying technology
  • Improved competition in the marketplace must provide choice for consumers and businesses
  • Consumer protection against fraud is critical for privacy and safety
  • While one could easily assume that trials are only of interest to larger carriers, there are plenty of good reasons why

involved, such as the opportunities to:

  • Experiment with new services without committing to maintain them forever
  • Influence future regulations
  • Take advantage of funding available specifically for rural-focused broadband and voice trials