March 2015

When uncontrolled political powers want regulatory reform

[Commentary] What happens when political powers go out of their way to influence what is supposed to be an independent regulatory process? Simply put, you find yourself sitting on research and analyses that cannot possibly inform, but rather can only conform to, the already-made regulations and their political motivations. This is exactly what appears to have happened to the Open Internet Order: the White House pushed for the Federal Communications Commission to implement the “strongest possible rules” on broadband providers, and the resulting order came out “threadbare and conclusory throughout.” But America is not alone. A look to New Zealand shows Americans what they are in for in the coming months and years.

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation]

New UN investigator to probe digital spying

The United Nations top human rights body agreed to appoint a special investigator to probe digital spying and violations of online privacy. Brazil and Germany spearheaded the resolution, which voiced deep concern over electronic surveillance and the interception of digital communications, as well as data collection by governments and private companies. Former US National Security Agency contractor Edward Snowden exposed mass surveillance of private e-mails and phone data across the world two years ago, sparking outrage. Brazil's government fell out with Washington at the time over revelations that the NSA had eavesdropped on President Dilma Rousseff. Snowden has said the United States also carried out large-scale electronic espionage in Germany.

"States must respect international human rights obligations regarding the right to privacy when they intercept digital communication of individuals and/or collect personal data," Brazil's ambassador Regina Dunlop told the UN Human Rights Council in presenting the resolution. The Geneva forum, whose 47 members include the United States, adopted the text unanimously. During the debate, Russia's delegation criticized mass surveillance by the United States while Cuba took aim at "certain Western powers".

House Communications Subcommittee Members Hold Robust Bipartisan Discussion of US Spectrum Policy

The House Communications Subcommittee discussed the future of US spectrum policy. With ever increasing demand for this finite resource, members explored how the federal government can help meet America’s spectrum needs. “There’s no question that mobile technology is one of the key components of the economy of both today and of the future,” said Chairman Greg Walden (R-OR). “Time and again, as the country that pioneered spectrum auctions once, and is in the process of doing it again, the world looks to the United States to lead spectrum policy and answer the challenge of meeting spectrum demand. We must continue to rise to that challenge.”

Members reviewed the Federal Communication Commission’s progress toward the first-of-its-kind Incentive Auction. Members raised a number of questions about the auction including what is being done to ensure broadcasters choosing not to participate are not adversely affected, cross border coordination of spectrum use, and ensuring that small businesses, including those owned by women and minority groups, have the ability to compete in the auction. Reps Brett Guthrie (R-KY) and Doris Matsui (D-CA) discussed their work to increase the efficiency of federal spectrum use, and reintroduced the Federal Spectrum Incentive Act. The bipartisan legislation, HR 1641, aims to incentivize federal agencies to free up additional spectrum for commercial use by relocating and consolidating spectrum holdings in return for a portion of the auction revenues as compensation. “By encouraging federal agencies to make additional spectrum available, we can invest in innovation and ensure spectrum is available to meet the demands of our critical emergency needs and commercial uses,” said Rep Guthrie.

FCC optimistic about broadcaster participation in spectrum auction

Congress held its sixth hearing in two weeks with the Federal Communications Commission. But this time, FCC Chairman Tom Wheeler got a break, and Congress gave network neutrality a rest. Instead Congress focused on the next major FCC project: the world’s most complex auction of wireless spectrum. FCC officials sought to reassure a House subcommittee that the FCC was taking all the right steps so the incentive auction, just a year away, would be as successful as the recently-completed AWS-3 auction. The AWS-3 auction of wireless spectrum blew the doors off all expectations, bringing in net proceeds of more than $41 billion. It not only provided $7 billion for the construction of the public safety broadband network known as FirstNet, it also generated $20 billion for deficit reduction.

Lawmakers have even higher expectations for the auction of broadcast spectrum, considered “beachfront property” for wireless services. But first, enough broadcasters must voluntarily relinquish some or all of their spectrum. “We won’t have an auction unless we have broadcaster participation,” Gary Epstein, the FCC’s chair of the incentive auction task force told the House subcommittee on communications and technology. Lawmakers also sought reassurances from the FCC that the commission would address the designated entity program that allowed two companies funded by Dish to pick up a large cache of spectrum at a discount in the AWS auction.

Jeb Bush: I don't read The New York Times

[Commentary] Jeb Bush isn't a New York Times reader. The former Florida governor and likely Republican presidential candidate appeared on Fox News Radio and, when asked to respond to a quote in the paper, said he doesn't read it. "I don't read The New York Times, to be honest with you," Bush told Fox's Brian Kilmeade.

The quote in question came from Tony Perkins, the president of the Family Research Council, who was quoted in the Times saying that the Christian right should begin discussing which candidate to back as an alternative to Bush, because he didn't represent their views. "When you become the frontrunner and you're a well-known name and you've had the type of fundraising success that you've had, even though you haven't declared yet, you're going to be a target of The New York Times, which many on the right think is a badge of honor," Kilmeade told Bush.

One Way to Phase Out Newspapers: Make Them a Luxury Good

There will eventually come a day when The New York Times ceases to publish stories on newsprint. Exactly when that day will be is a matter of debate. "Sometime in the future, date TBD," the paper's publisher said back in 2010. Overhead may be high and circulation may be lower, but rushing to eliminate the print edition of The New York Times would be a mistake, says BuzzFeed CEO Jonah Peretti.

Peretti says the Times shouldn't waste time getting out of the print business, but only if they go about doing it the right way. "Figuring out a way to accelerate that transition would make sense for them," he told me, "but if you discontinue it, you're going to have your most loyal customers really upset with you." "It's a really hard thing to do and it's a tremendous luxury that BuzzFeed doesn't have a legacy business," Peretti told me. "But we're going to have questions like that where we have things we're doing that don't make sense when the market changes and the world changes. In those situations, it's better to be more aggressive than less aggressive."

European Commission Considers New Telecom Rules to Level the Playing Field

The European Union is weighing an overhaul of its telecommunications rules that could give incumbent operators like Deutsche Telekom AG an edge over upstart challengers like Iliad SA of France and messaging service WhatsApp.

The EU proposals -- due to be completed by May -- are part of an ambitious strategy to create a single digital market across the 28-country bloc by breaking down national silos in areas like e-commerce and copyright law. The European Commission, the bloc’s executive arm, said that as part of the plan, it would review existing EU telecom and media rules “to encourage investment in infrastructure.” The rules should be made “fit for new challenges,” particularly with regard to “the increasing number of voice calls made over the Internet and new players in the field,” the commission said.

FCC to Close 16 of 24 Field Offices

Field offices are on the chopping block at the Federal Communications Commission. Sixteen of 24 are being targeted for closure, FCC Chairman Tom Wheeler told members of Congress. Chairman Wheeler appeared before the House Subcommittee on Financial Services and General Government to plead the agency’s case for 2016 funding. He said an audit of field offices revealed several with one manager to four employees in “oversized rental facilities, which are draining our resources.” “After analyzing a contractor report on field office use, we have determined that we can more efficiently deploy staff using a ‘tiger team’ approach and make better use of regional offices,” he said in prepared testimony. “This plan, if accepted by my fellow commissioners, will lead to 16 field office closures and annual savings of $9 million without diminished productivity.” Non-auction flat funding has led to staff cuts, he said.

The FCC currently has 1,708 full-time positions, compared to a 20-year average of 1,877. Contractors have been cut as well, from 600 in 2012 to 435 by the end of 2016. Yet the 2016 budget request is the first in 10 years that doesn’t include a request for more bodies, but rather cuts 37 positions -- 30 of them from field offices. Chairman Wheeler said while the staff’s been shrinking, demands have increased and so has the workload for those still standing. At some point, he said, the cuts will have a negative effect. “For example, in the licensing operations area since 2010, our FTE levels have declined by more than 25 across several bureaus, versus steady growth in licensing activity over that same time, so at some point licensing operations could slow,” he said. Licensees ultimately will feel the pain, he said.

FirstNet delays draft RFP, cites finance committee questions

The First Responder Network Authority (FirstNet) said it would delay the release of a draft RFP due to questions that arose in its finance committee. On March 24, four FirstNet committees met in separate sessions: governance and personnel; technology; outreach; and finance. Board members were expected to approve a complete draft RFP, but on March 25, the full board met and said it would delay a vote to issue the RFP until a later date.

TJ Kennedy, acting executive director at FirstNet, said he was pleased with progress made thus far across the board, from outreach to acquisition. "We just want to make sure we have all the details put together, and you'll be seeing that come out over the next several weeks," he said. The board is expected to next meet via teleconference in the next several weeks. The other committees were okay with the RFP, so once the finance committee's issues are addressed, it can move forward. Stuart Kupinsky, FirstNet's chief counsel, said they couldn't disclose too much about the finance committee's outstanding issues. The committee is dealing with confidential materials related to market research, and revealing too much could jeopardize their standing.

Rep Butterfield wants Congress to take lead on Web rules

Unlike most Democrats, Rep GK Butterfield (D-NC), Chairman of the Congressional Black Caucus, wants a legislative fix on network neutrality. Rep Butterfield said the Federal Communications Commission's rule-making process has been "politically driven" by special interests and Congress needs to get involved. He did not, however, give support to any specific plan. "They’ve made a rule change under Title II of the Communications Act that’s going to regulate broadband just like utility and phone companies, and we need to get Congress involved," he said. "Congress needs to come in and establish broadband policy going forward."

His words break with many in the Democratic Party who have lauded the FCC's rules. Rep Butterfield questioned, however, whether Congress has the political will to get anything passed, given the partisan dynamics. He said he would help outline the legislative record so that "one day, we can get it done." He said he supports the principles of net neutrality, like preventing service providers from blocking or throttling traffic. But there is not always agreement on which authority should be used to enforce the rules. "When you start getting in the weeds, the issue gets very complicated," he said. "And that’s why Congress needs to develop sound broadband policy. Congress has the power to do it, but the question is, does it have the political will to do it?" Rep Butterfield warned of the lack of permanence of the FCC's rules. “These commissioners don’t serve for life, so when the new commissioners come in, they can reverse what these commissioners have done," he said. "So we need to write into the law good consumer protections and something that individuals and companies can depend on."

Benton

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