November 2014

Congress and the FCC: An Uneasy Relationship

[Commentary] President Barack Obama’s recent statement urging Federal Communications Commission Chairman Tom Wheeler to “reclassify” broadband Internet services has exposed many people to something they haven’t had reason to think about: the FCC is an independent agency, not truly part of the Executive Branch. Actually, the FCC is in some ways more nearly akin to an arm of the Congress, and exercises quasi-legislative powers when it adopts rules implementing the Communications Act. The relationship between the FCC and the Executive Branch is a worthy topic to explore, but in light of the recent Republican takeover of the Senate, this post will address the relationship between the FCC and Congress. Apart from the power to legislate, Congress has several means of influencing actions of the FCC. Because Congress has several means of directly influencing FCC action, members of the FCC pay heed to the frequent letters from members of Congress calling for action on a particular item or advocating a particular result. Pressure from influential members from the leadership or from senior members of the Commerce Committees can often shape the details of FCC action.

AT&T’s good cop, bad cop routine with the FCC

When AT&T said it was halting a plan to give 100 cities ultra-fast Internet, it apparently didn't really mean that.

The telecom giant was threatening to pull its investments in new fiber optic cables if it didn't get more "certainty" from Washington about how Internet service providers would be regulated under net neutrality, the idea that broadband companies shouldn't be allowed to speed up or slow down certain Web sites over others. AT&T's chief executive, Randall Stephenson, told investors this month that "we can't go out and just invest that kind of money" without knowing what rules the government might apply. But after the warning raised eyebrows at the Federal Communications Commission, AT&T is now saying that it "still plans to complete" the rollout after all, underscoring the delicate balance the company has to strike with federal officials if it wants them to approve its $49 billion merger with DirecTV.

AT&T has argued that its merger with DirecTV, if approved, would help consumers by expanding video choices and promoting competition with the cable industry. Let the deal go through, and everybody benefits, the company says. Separately, however, AT&T is making a more ominous argument: If regulators don't craft industry-friendly net neutrality rules, AT&T (and everyone else who's an ISP) will have no choice but to hurt consumers by slowing down the pace of their network upgrades. If you pass aggressive regulations, the consequences are on you. Stephenson's comments this month seemed to offer a taste of that.

In 2014, the Internet added an entire United States to its user base

In 2013, the Internet grew a great deal, adding a number of new users equivalent to about the population of the United States. The caveat: even that growing global online population tends to look a lot like that of the United States -- relatively well-off, generally educated, and fairly young.

According to this year's edition of the "Measuring the Information Society" report from the United Nations' International Telecommunication Union, by the end of 2014, the Internet will be used by 3 billion people around the world. That's an increase of 300 million people since last year, and it means we're quickly approaching the point where half of the world's population will be online. Less encouraging for fans of the Internet, though, is that usage is not distributed evenly yet.

Mayor Bill de Blasio’s Wi-Fi Plan Draws Critics

Mayor Bill de Blasio’s plan to bring public Internet access to the five boroughs is raising concerns among cybersecurity experts and elected officials. The initiative would build one of the world’s largest municipal Wi-Fi networks -- an experiment that could backfire, analysts said, if hackers access massive troves of personal data.

“If [city officials] are not extraordinarily careful, they’re opening up Pandora’s box,” said Timothy P. Ryan, managing director of cyber-investigations at Kroll, a risk-management firm. The initiative will replace the city’s pay phones with some 10,000 so-called Link machines, Wi-Fi hubs with phone capabilities, streaming advertisements and cellular-phone chargers. The project will cost about $200 million, officials said, with a consortium of companies involved in the project sharing the ad revenue with the city. No taxpayer money will be used for construction, officials said.

Five options for feds on network neutrality

Here are five options the Federal Communications Commission could take on network neutrality:

The so-called “Title II” approach that President Barack Obama endorsed would have the FCC reclassify broadband Internet as a “telecommunications” service instead of an “information” service, which would allow it to draw from stronger rules under Title II of the Communications Act.
FCC Chairman Tom Wheeler’s proposal to regulate Internet service providers under legal authority that allows the agency to promote the deployment of broadband.
Chairman Wheeler was reportedly close to settling on some type of hybrid approach that used a mix of legal authorities to regulate the Web.
Instead of having the FCC write new rules, GOP lawmakers and the two Republican commissioners sitting on the FCC have said Wheeler should wait for Congress to act.
Include wireless Internet service in new net neutrality rules.

Net Neutrality: How Did House Reps. Vote on the FCC's 2011 Net Neutrality Rule?

In 2010, the Federal Communications Commission issued a rule designed to enshrine network neutrality as the law of the land, prohibiting fixed-line internet service providers from blocking or discriminating against traffic to lawful content on the web. In April 2011, the House of Representatives passed a resolution of disapproval against the FCC's net neutrality rule. This 2011 FCC rule was thrown out in 2014 by the D.C. Circuit as a result of the Verizon v. Federal Communication Commission case. How did members of the House of Representatives vote on the 2011 resolution opposing net neutrality?

Shades of complexity dominate the debate over ‘net neutrality’

[Commentary] After a decade, the noisy “net neutrality” debate is reaching a crescendo. President Barack Obama has weighed in against the cable and phone companies. While his own appointee as chairman of the Federal Communications Commission, a former cable industry lobbyist, searches for a Solomonic compromise that is sure to usher in another decade of political combat, legal challenges and regulatory gamesmanship.

This is a debate that has come to be dominated by hypocrisy, half-truths and impenetrable complexities. At one level, net neutrality is a solution to a problem that, for the moment, doesn’t exist. While Americans pay higher rates for slower service than Internet users in other countries, a combination of public opinion, regulatory pressure and antitrust consent decrees has restrained Internet service providers (ISPs) from blocking, prioritizing or otherwise discriminating against other people’s content -- the evils net neutrality aims to solve. At another level, what the net neutrality debate is really about is deciding who will pay the considerable costs of building out the infrastructure to handle all those bandwidth-hogging videos and games that we’ll be downloading from the Internet. The content providers and start-up app creators, naturally, think they shouldn’t have to pay because that would discourage their economy-disrupting innovation. The ISPs, naturally, think they will only have the money and incentive to expand their network if they can levy an extra charge on the Netflixes and the Googles who have sucked most of the value out of the Internet. But here’s the thing: In a genuinely competitive market, it shouldn’t matter. Whichever side pays will simply pass the cost on to us consumers. This is just a fight between two industries trying to make sure it’s the other which is forced to raise prices.

The real problem, however, is that the market isn’t genuinely competitive, and getting less so. This is more an antitrust problem than it is a telecom problem. Telecommunications is a means, not an end. The aim of telecom policy should not be figuring out regulatory contortions to artificially create a competitive market for Internet access where one does not exist. Rather, it should be to assure everyone cheap and ubiquitous Internet access in order to create a robust and competitive Internet economy.

Department of Justice Requires Divestiture in Order for Nexstar to Proceed With Its Acquisition of Communications Corporation of America

The Department of Justice announced that it will require Nexstar Broadcasting Group, Mission Broadcasting, Communications Corporation of America (CCA), and Silver Point Partners to divest their interests in WEVV‑TV, a CBS and FOX affiliate in Evansville, Indiana, in order for Nexstar to proceed with its acquisition of CCA.

Without this divestiture, the department said, Nexstar, with its control of Mission would have gained a dominant position in broadcast television spot advertising in the Evansville, Indiana area, resulting in higher prices to advertisers. The Nexstar-CCA transaction is valued at approximately $270 million. The Antitrust Division filed a civil antitrust lawsuit in the US District Court for the District of Columbia to block the proposed acquisition. Concurrent with the filing of the lawsuit, the division filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit. The department’s complaint alleges that the proposed acquisition would lessen competition in broadcast television spot advertising in the Evansville, Indiana, Designated Market Area (DMA). In the Evansville DMA, the transaction would result in Nexstar owning or controlling three TV stations and three of the four major broadcast network affiliations in Evansville. Had the transaction been consummated as originally proposed, Nexstar would have owned or controlled WEHT (ABC affiliate), WEVV-TV (CBS & FOX affiliate), and WTVW (CW affiliate). To remedy this likely harm, the proposed settlement requires Nexstar and CCA to divest CCA’s WEVV-TV to Bayou City Broadcasting Evansville Inc., or an alternative, independent buyer to be approved by the United States.

President Obama signs E-Label Act

President Barack Obama signed the E-Label Act, the White House announced, which allows electronics manufacturers to label their products electronically instead of physically. The change should give companies more flexibility under Federal Communications Commission rules, supporters argued, especially as consumer electronics get smaller and smaller.

AT&T told to stop calling U-verse the “Fastest Internet for the price”

An advertising review board has told AT&T that it should either stop advertising U-verse as the "Fastest Internet for the price" or make it clear to consumers that the claim refers to a 3Mbps service, one of the slowest speeds AT&T offers.

After a complaint from Comcast, the National Advertising Division (NAD) of the Council of Better Business Bureaus agreed that the "Fastest Internet for the price" claim is misleading. "NAD recommended that AT&T either discontinue its 'Fastest Internet for the price' claim or modify the claim by ensuring that consumers understand that the claim is based on a comparison of pricing for 3.0 Mbps service," NAD said.

Benton

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