May 2015

May 14, 2015 (House Votes to End NSA’s Bulk Phone Data Collection)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY, MAY 14, 2015

How do we define “in the public interest” in the Digital Age? Find unique perspectives on communications policy debates in the Digital Beat

PRIVACY/SECURITY
   House Votes to End NSA’s Bulk Phone Data Collection
   What the USA Freedom Act giveth, and taketh away - WaPo op-ed
   House Speaker Boehner: It's not the time to use a 'wrecking ball' on NSA bill
   Sen Corker 'shocked' that NSA collecting 'little data’ [links to web]
   Shortcomings of Cybersecurity Bills - NYTimes editorial [links to web]
   DHS Cyber Exec: Cyberthreats Will Keep Coming if Public and Private Sectors Don't Collaborate [links to web]
   The State Department’s Weary Soldier in America’s Cyber War [links to web]

INTERNET/BROADBAND
   House Judiciary Committee: More time needed for Internet domain transition
   Will Multistakeholderism Prevail By September 2015? - Public Knowledge press release
   FCC Contemplates Subsidized Broadband Services - Forbes op-ed

NET NEUTRALITY
   Opponents of FCC's net neutrality rules ask court for partial stay
   Comptel Backs FCC in Title II Fight [links to web]

CONTENT
   How Google’s Top Minds Decide What to Forget
   Facebook's study of news revealed its plans to be the next top search engine

OWNERSHIP
   Hill Heats Up Over Effective Competition [links to web]
   Comcast CEO: 'We're not feeling the need to rush out and do something' after TWC deal collapse [links to web]
   Charter Still in Active Talks to Buy Bright House Networks [links to web]

VERIZON/AOL
   Why the Verizon-AOL deal just might work: Mobile video ads are worth a lot [links to web]
   What AOL meant to Washington’s tech industry - analysis [links to web]
   Five Things That You Probably Didn’t Know Verizon Will Own After the AOL Deal Closes [links to web]
   What we learned watching AOL stumble - Michelle Quinn analysis [links to web]

TELEVISION
   Legal battle will not stop slimmed-down TV plans for cord cutters [links to web]
   Rentrak Making TV Measurement Headway [links to web]

GOVERNMENT & COMMUNICATIONS
   CBO Scores DHS Social Media Improvement Act of 2015 - research [links to web]
   FCC Ponders Extending Emergency Alert Accessibility Rules to “Second Screens” - analysis [links to web]

ELECTIONS & MEDIA
   The Democratic advantage in digital, data, and analytics isn’t going away easily - WaPo op-ed [links to web]

DIVERSITY
   Univision’s Bill Clinton–led pitch to advertisers shows why TV isn’t more diverse

STORIES FROM ABROAD
   Why Facebook’s Internet.org is Stumbling in India - analysis
   The BBC braces for the fight of its life [links to web]
   The Myth of Globalization in Consumer Tech - Revere Digital op-ed [links to web]

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PRIVACY/SECURITY

USA FREEDOM ACT
[SOURCE: New York Times, AUTHOR: Jennifer Steinhauer]
The House overwhelmingly approved legislation to end the federal government’s bulk collection of phone records, exerting enormous pressure on Senate Majority Leader Mitch McConnell (R-KY) who insists that dragnet sweeps continue in defiance of many of those in his Republican Party. Under the bipartisan bill, which passed 338 to 88, the Patriot Act would be changed to prohibit bulk collection by the National Security Agency of metadata charting telephone calls made by Americans. However, while the House version of the bill would take the government out of the collection business, it would not deny it access to the information. It would be in the hands of the private sector — almost certainly telecommunications companies like AT&T, Verizon and Sprint, which already keep the records for billing purposes and hold on to them from 18 months to five years. So for the NSA, which has been internally questioning the cost effectiveness of bulk collection for years, the bill would make the agency’s searches somewhat less efficient, but it would not wipe them out. With the approval of the Foreign Intelligence Surveillance Court, the spy agencies or the FBI could request data relevant to an investigation. Corporate executives have said that while they would have to reformat some data to satisfy government search requirements, they could most likely provide data quickly. The legislation would also bar bulk collection of records using other tools like so-called national security letters, which are a kind of administrative subpoena.
benton.org/headlines/house-votes-end-nsas-bulk-phone-data-collection | New York Times | LA Times
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WHAT THE USA FREEDOM ACT GIVETH, AND TAKETH AWAY
[SOURCE: Washington Post, AUTHOR: HL Pohlman]
[Commentary] If you are in communication with a foreign-based group that the US government is targeting for the purpose of obtaining “foreign intelligence information,” or even if that foreign-based group knows who you are, then the government will be able to collect your phone records if the current version of the USA Freedom Act becomes law. Indeed, if a request for phone records does not have to be part of an investigation of international terrorism, then the “specific selection term” noted above can be associated with any kind of foreign power -- whether it is a foreign government, a corporation or a nongovernmental organization -- relevant to the conduct of US foreign affairs. Second, in such a case -- that is, under that slightly amended hypothetical government request -- the government would not need to use a “specific selection term” that only “identifies an individual, account, or personal device.” Instead it could use a term “that specifically identifies a person, account, address, or personal device, or any other specific identifier” so long as the identifier “is used to limit, to the greatest extent reasonably practicable, the scope of tangible things sought [in this case, phone records] consistent with the purpose for seeking the tangible things.” This convoluted language seems to mean that any “specific identifier” will qualify as a “specific selection term” if it permits the collection of only the phone records that will enable the government to achieve its purpose. So, if the purpose of the government is broad, such as when it is trying to collect “foreign intelligence information” for the purpose of conducting foreign policy, then the “specific identifier” will be quite expansive, too. That, in turn, implies that a very large amount of American citizens’ phone records will still be scooped up by the NSA and analyzed. Apologies for the legalese -- but it is the loopholes hidden in that legalese that the intelligence community’s lawyers presumably hope we (and Congress!) will be unable to discover. The bottom line is straightforward enough: In terms of the privacy rights of US citizens, the USA Freedom Act, as currently written, will take away more than it will give back. This could be why the White House, and the NSA, are happy to see it pass.
[HL Pohlman is a professor of political science at Dickinson College]
benton.org/headlines/what-usa-freedom-act-giveth-and-taketh-away | Washington Post
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House Speaker Boehner: It's not the time to use a 'wrecking ball' on NSA bill
HOUSE SPEAKER BOEHNER: IT'S NOT THE TIME TO USE A 'WRECKING BALL' ON NSA BILL
[SOURCE: The Hill, AUTHOR: Scott Wong]
House Speaker John Boehner (R-OH) acknowledged that some Republicans want to tweak a national security bill headed for a vote on the House floor on May 13, but said it's the wrong time to "bring out the wrecking ball." The House is poised to pass the USA Freedom Act, which would overhaul the National Security Agency program that collects Americans' phone records in bulk. The legislation also would extend expiring portions of the Patriot Act. "This is a very delicate issue. I know members would like to offer some amendments but this is not a place for people to bring out the wrecking ball," Speaker Boehner said. On May 13, the House Rules Committee, which is controlled by allies of Speaker Boehner, blocked efforts by Rep Justin Amash (R-MI) and other civil-liberties advocates to offer amendments to the bill. But Speaker Boehner noted that the underlying bill had broad support and was very similar to one the House passed in 2014 with nearly 300 votes. The White House has signaled support for the bill, but Senate Majority Leader Mitch McConnell (R-KY) favors a "clean" reauthorization of the Patriot Act before provisions expire on June 1. Asked how the House and Senate would resolve their differences, Speaker Boehner demurred. "I'm not going to speculate what the Senate will or will not do," he said. "All I know is that these programs expire at the end of [May]. They are critically important to keep Americans safe. The House is going to act and I hope the Senate will act soon as well."
benton.org/headlines/house-speaker-boehner-its-not-time-use-wrecking-ball-nsa-bill | Hill, The
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INTERNET/BROADBAND

HOUSE JUDICIARY COMMITTEE: MORE TIME NEEDED FOR INTERNET DOMAIN TRANSITION
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
More time is needed for the US government to hand over its oversight role of the Internet domain name process, most panelists at a House Judiciary Committee hearing said on May 13th. Rep Darrell Issa (R-CA) noted language was inserted into the Commerce Department's 2016 budget that would bar the agency from appropriating funds for the transition. "In other words, until the end of the fiscal year 2016 this transition would not be allowed to go forward," he said. The House Energy and Commerce Committee is also debating legislation that would put off a transition until the Government Accountability Office can review the move's implications. The appropriations language was added to the department's 2015 budget as well. When that happened, the National Telecommunications and Information Administration, housed in the Commerce Department, said it would adhere to the ban, but would continue to monitor discussions and participate in meetings about the transition with other stakeholders. While many of the eight panelists said more time would be needed, at least one hinted at concerns about Congress's appropriations move. "Possibly the earliest is next spring of 2016. It might well likely leak into much later in 2016," said Steve DelBianco, the executive director of NetChoice. "And yet Commerce needs to have enough leeway to spend the resources necessary to answer your questions, and to make sure the stress tests have been applied and to make sure their conditions have been met."
benton.org/headlines/house-judiciary-committee-more-time-needed-internet-domain-transition | Hill, The
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WILL MULTISTAKEHOLDERISM PREVAIL BY SEPTEMBER 2015?
[SOURCE: Public Knowledge, AUTHOR: Melanie Penagos]
Since the formation of the Internet Corporation for Assigned Names and Numbers (ICANN) in the late 1980’s, the US Government and Internet stakeholders envisioned that the United States' stewardship role in the Internet Assigned Numbers Authority (IANA) functions would be temporary. Public Knowledge welcomes this transfer as a fulfillment of many years of US promises to the international community. Although there has been some talk to extend the September 30th deadline and offer the respective working groups more time to complete their work to set up a new system for oversight and proper accountability measures, the multistakeholder community is continuing to operate with this deadline in mind. A successful transition by the set deadline would be a big step forward in showing that the Internet is not only in the domain of national governments, but that users around the world also have an essential role in shaping its future. Furthermore, the development of the Internet, driven by technical standards organizations, governments, private corporations, and civil society groups, has always been conducted through a multistakeholder process, and therefore, it is important that its governance continue to be reflective of this reality. A successful transition of IANA functions from the purview of the United States to the global community would demonstrate a vote of confirmation and trust on the multistakeholder model that the US advocates internationally.
benton.org/headlines/will-multistakeholderism-prevail-september-2015 | Public Knowledge
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FCC CONTEMPLATES SUBSIDIZED BROADBAND SERVICES
[SOURCE: Forbes, AUTHOR: Steve Pociask]
[Commentary] The Federal Communications Commission is contemplating a new universal service program that would subsidize broadband services for low-income consumers, and it is looking to use its Lifeline program, which currently subsidizes low-income telephone service consumers, as the model to follow. However, a closer look at the history of the billion-plus Lifeline program shows a wasteful and fraud-laden program that taxes virtually all telephone service consumers and subsidizes millions ineligible consumers in order to help a few. A recent Government Accountability Office report strongly concluded that an evaluation of the program is needed before going forward. Rather than serve only the truly needy, the Lifeline program has more recently morphed into a wireless telephone service giveaway program. Using a measure of price sensitivity calculated by a group of economists in their Lifeline study, I estimate that providing a 50 percent price reduction to 100 low-income households would stimulate just one new subscriber at roughly the cost of $1,000 per month. In other words, the program pays a lot of money and it taxes a lot of people for very little benefit to society as a whole. This is all the more reason for the current program to be revamped, dramatically downsized and better targeted to those truly needy, such as those in homeless shelters, remote Indian reservations and similarly impacted groups. Lifeline is certainly not the model worth replicating for the burgeoning broadband services market. Simply put, more regulations and higher taxes are not the solution to advancing broadband service penetration. The FCC needs to rethink its position and revamp Lifeline.
[Steve Pociask is president of the American Consumer Institute Center for Citizen Research]
benton.org/headlines/fcc-contemplates-subsidized-broadband-services | Forbes
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NET NEUTRALITY

OPPONENTS OF FCC'S NET NEUTRALITY RULES ASK COURT FOR PARTIAL STAY
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera]
AT&T and other opponents of tough new federal network neutrality regulations asked a federal court on May 13 to halt implementation of the most controversial provision until lawsuits challenging the rules are decided. Telecommunications companies and trade groups said the decision by the Federal Communications Commission in February to classify broadband Internet service as a highly regulated utility will impose "immense burdens and costs" that would not be undone if the agency's order ultimately is overturned in court. "Such relief is necessary to avoid the serious and substantial harms that service providers and consumers alike will bear if the FCC is allowed to subject the modern Internet to this antiquated regulatory regime," said Michael Powell, president of the National Cable & Telecommunications Association trade group. The new regulations, designed to ensure that broadband providers don't discriminate against any legal content flowing through their networks to consumers, are set to take effect June 12. If a stay is not granted, pending lawsuits should be expedited, according to the joint petition the companies and trade groups filed in the US Court of Appeals for the District of Columbia Circuit. FCC spokeswoman Kim Hart said the opponents “have not demonstrated that they will suffer irreparable injury if the order takes effect, and the public interest clearly favors” allowing the rules to become effective in June. “We are confident that the court will deny the request for a stay,” she said. AT&T and the NCTA were joined in the stay request by Centurylink, CTIA -- The Wireless Association, the American Cable Association, US Telecom and the Wireless Internet Service Providers Association.
benton.org/headlines/opponents-fccs-net-neutrality-rules-ask-court-partial-stay | Los Angeles Times | The Hill | ars technica | Broadcasting & Cable
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CONTENT

How Google’s Top Minds Decide What to Forget
HOW GOOGLE'S TOP MINDS DECIDE WHAT TO FORGET
[SOURCE: Wall Street Journal, AUTHOR: Lisa Fleisher, Sam Schechner]
On most Wednesdays, Google’s top minds in Europe get together and decide what to forget. The meetings are a new -- and potentially precedent-setting -- routine for a group of senior lawyers, engineers and product managers at the tech company, after Europe’s top court ruled that people could ask Google to remove links in search results for their name. The European Court of Justice ruling, a year old on May 13th, places Google in the uncomfortable position of having to vet take-down requests itself, and make a call. The decision making requires weighing a host of considerations, including weighty ones like how to balance people’s individual rights to privacy against the public’s right to know. The court gave little guidance on how requests should be decided, beyond saying that search results should be scrubbed if they include links to information that is inadequate, irrelevant, excessive or outdated. That largely left Google on its own to figure out where to draw the line. The case, which established what is informally known as the “right to be forgotten,” has prompted more than 250,000 requests covering more than 920,000 links. Google has agreed to remove 35 percent of the links submitted and declined to remove 50 percent, with 15 percent still under review. Peter Fleischer, Google’s global privacy counsel, gave a rare glimpse of the mechanics of its decision making. He said the company was doing its best “to play a role that we never asked to play -- and don’t want to play.” The approach -- leaving it to Google to sort out -- sets one example for how Europe may choose to enforce any future broadening of the right to be forgotten.
benton.org/headlines/how-googles-top-minds-decide-what-forget | Wall Street Journal
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FACEBOOK'S STUDY OF NEWS REVEALED ITS PLAN TO BE THE NEXT TOP SEARCH ENGINE
[SOURCE: Vox, AUTHOR: Margarita Noriega]
Facebook posted a study on what Americans see in the News Feed from "ideologically diverse" sources. The company created a bot to categorize news based on headlines and the first few words of an article. However, the bot revealed more about Facebook's future plans to expand its search capabilities than it did about user echo chambers. Why the study is so easily criticized: The sample set doesn't reflect the average American. Facebook found that only about a quarter of politically affiliated American users are exposed to ideologically diverse news. Only 9 percent of US-based Facebook users post a political affiliation. A study about a self-identifying minority is a study about silos. If they show little to no correlative relationship to their sources of news, the silos would be debunked. But the study shows the opposite. What the bot is really telling us: Facebook is building a search engine to rival Google. The bot is a preview of how that search will rank stories. John Constine and Kyle Russell at TechCrunch shared screenshots of a newly discovered way to use Facebook search. The "Add a Link" function lets you post search results to your page that originally come from outside of Facebook. And how do you see webpage search results inside Facebook of webpages that live outside of Facebook unless you first index those pages? And how do you target those search results based on user preference? You use web crawling bots that read quickly and correlate user data and content. Facebook has already crawled 1 trillion link posts inside Facebook. Now it just has to crawl everything else on the World Wide Web. What will it look like? Something like what Google+ was supposed to be, but if the "+" part came first.
benton.org/headlines/facebooks-study-news-revealed-its-plans-be-next-top-search-engine | Vox
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DIVERSITY

UNIVISION'S BILL CLINTON-LED PITCH TO ADVERTISERS SHOWS WHY TV ISNT' MORE DIVERSE
[SOURCE: Vox, AUTHOR: Todd VanDerWerff]
Univision's upfront presentation -- given to ad buyers to convince them to purchase commercial space on the Spanish-language network -- featured Bill Clinton. The former President didn't say anything all that unusual or off-book. Why was he speaking at a presentation for advertisers? The answer is that Univision wanted the promise of Clinton's appearance to get those advertisers in the door (who better than an ex-president to do that?), and then it wanted Clinton to be its ultimate pitchman. Unlike other broadcast TV networks, Univision doesn't have to convince advertisers to purchase ad time alongside its new programs. No, it has to convince them to purchase ad time on the network, period. And that's kind of messed up. Because according to some metrics -- particularly the ones advertisers care about — and on some nights, Univision is the number-one network in America. So why is it having such a tough time bringing in ad dollars? And what do its struggles say about the future of diversity on TV? While there are a host of reasons for TV's struggle to diversify, advertising is one of the major ones. Programmers believe that tastemakers in desirable demographics want to watch shows about people who are just like them -- which is why there have been so many shows about young, single, white people who don't seem to worry much about money. The networks will take a ding from the press about diversity if they can attract viewers who look just like the characters onscreen (and will hopefully buy the products advertised). Maybe that's why Univision brought in Clinton give ad buyers the hard sell. If he couldn't rouse their social consciences, however, the network also wanted to point out success stories from companies that specifically targeted Latino audiences. JCPenney, for example, saw success via targeting Latina women, Univision said, before citing other companies like Nissan and Papa John's, which boasted significant growth among Latinos in particular.
benton.org/headlines/univisions-bill-clinton-led-pitch-advertisers-shows-why-tv-isnt-more-diverse | Vox
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STORIES FROM ABROAD

FACEBOOK IN INDIA
[SOURCE: Revere Digital, AUTHOR: Kurt Wagner, Mark Bergen]
Critics hammered Facebook‘s Internet.org, the company’s initiative to bring wireless Internet access to everyone in the world. That’s because to its opponents, Internet.org represents a skewed view of the Internet — a Facebook view of the Internet that one detractor likened to “economic racism” which stands to benefit the social network and its partners more than anybody else. From Facebook’s standpoint, Internet.org is a win-win-win. Users get free Internet services that they wouldn’t otherwise pay for; telecom providers get new customers in the ones who are prompted to buy data plans; and Facebook gets more users from markets that are reaching the Internet for the very first time. This last point is especially critical for Facebook as it has started to see slower growth in the US. But opponents say the plan is not adherent to net neutrality, the belief that all Internet data should be equally treated and equally accessible, and a principle that Facebook has vocally supported back in the United States. The debate may go a long way in determining how Internet.org is adopted in other parts of the world.
benton.org/headlines/why-facebooks-internetorg-stumbling-india | Revere Digital
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House Votes to End NSA’s Bulk Phone Data Collection

The House overwhelmingly approved legislation to end the federal government’s bulk collection of phone records, exerting enormous pressure on Senate Majority Leader Mitch McConnell (R-KY) who insists that dragnet sweeps continue in defiance of many of those in his Republican Party.

Under the bipartisan bill, which passed 338 to 88, the Patriot Act would be changed to prohibit bulk collection by the National Security Agency of metadata charting telephone calls made by Americans. However, while the House version of the bill would take the government out of the collection business, it would not deny it access to the information. It would be in the hands of the private sector — almost certainly telecommunications companies like AT&T, Verizon and Sprint, which already keep the records for billing purposes and hold on to them from 18 months to five years. So for the NSA, which has been internally questioning the cost effectiveness of bulk collection for years, the bill would make the agency’s searches somewhat less efficient, but it would not wipe them out. With the approval of the Foreign Intelligence Surveillance Court, the spy agencies or the FBI could request data relevant to an investigation. Corporate executives have said that while they would have to reformat some data to satisfy government search requirements, they could most likely provide data quickly. The legislation would also bar bulk collection of records using other tools like so-called national security letters, which are a kind of administrative subpoena.

Shortcomings of Cybersecurity Bills

[Commentary] A series of brazen hacking attacks against companies like Sony Pictures, Target and Anthem have spurred lawmakers in Congress to propose cybersecurity legislation. These bills could help make American networks somewhat less vulnerable to hackers, but they would do so at a cost to the privacy of individuals.

Public interest groups like the American Civil Liberties Union and the Center for Democracy and Technology are concerned that these bills could become a way for government agencies to increase surveillance on individuals. The bills would allow businesses to share data that include some personal information about customers, employees and Internet users. They would also allow government agencies like the National Security Agency and the Federal Bureau of Investigation to use that information in investigations that are not related to cybersecurity without having to obtain a search warrant as they are normally required to do. In addition, the bills would allow businesses to defend themselves against hackers through software that could remotely disable or disrupt the computers or networks suspected of being behind the attack. A broader failing of these bills is that they will not push corporations to make their computer systems more secure from hackers, something that is clearly needed given recent high-profile attacks. For one thing, giving companies immunity from lawsuits even when they fail to respond to credible threats reduces their incentive to invest in more secure systems.

When cybersecurity legislation comes to the Senate floor, lawmakers should fix the shortcomings of these bills.

What we learned watching AOL stumble

[Commentary] AOL's trajectory is a bracing reminder for today's tech sensations that their success is vulnerable, especially at its peak. It is a cautionary tale of what not to do when you have the world by its tail. Here are a few AOL lessons:

  • The hockey stick growth mystique: AOL prospered by drawing millions of people to its service, but that growth, which peaked at nearly 30 million dial-up customers, was challenged by the uptick in broadband adoption.
  • The allure of the "transformational" purchase: Make acquisitions, but not ones so big and culturally at odds with the firm's central mission that the combination destroys the resulting company.
  • Feeling invulnerable: AOL Time Warner was immediately besieged by problems of its own making, but what took it down ultimately was the dot-com bust. The firm had to write off billions and its stock lost significant value.

Why Facebook’s Internet.org is Stumbling in India

Critics hammered Facebook‘s Internet.org, the company’s initiative to bring wireless Internet access to everyone in the world. That’s because to its opponents, Internet.org represents a skewed view of the Internet — a Facebook view of the Internet that one detractor likened to “economic racism” which stands to benefit the social network and its partners more than anybody else.

From Facebook’s standpoint, Internet.org is a win-win-win. Users get free Internet services that they wouldn’t otherwise pay for; telecom providers get new customers in the ones who are prompted to buy data plans; and Facebook gets more users from markets that are reaching the Internet for the very first time. This last point is especially critical for Facebook as it has started to see slower growth in the US. But opponents say the plan is not adherent to net neutrality, the belief that all Internet data should be equally treated and equally accessible, and a principle that Facebook has vocally supported back in the United States. The debate may go a long way in determining how Internet.org is adopted in other parts of the world.

Opponents of FCC's net neutrality rules ask court for partial stay

AT&T and other opponents of tough new federal network neutrality regulations asked a federal court on May 13 to halt implementation of the most controversial provision until lawsuits challenging the rules are decided. Telecommunications companies and trade groups said the decision by the Federal Communications Commission in February to classify broadband Internet service as a highly regulated utility will impose "immense burdens and costs" that would not be undone if the agency's order ultimately is overturned in court. "Such relief is necessary to avoid the serious and substantial harms that service providers and consumers alike will bear if the FCC is allowed to subject the modern Internet to this antiquated regulatory regime," said Michael Powell, president of the National Cable & Telecommunications Association trade group.

The new regulations, designed to ensure that broadband providers don't discriminate against any legal content flowing through their networks to consumers, are set to take effect June 12. If a stay is not granted, pending lawsuits should be expedited, according to the joint petition the companies and trade groups filed in the US Court of Appeals for the District of Columbia Circuit. FCC spokeswoman Kim Hart said the opponents “have not demonstrated that they will suffer irreparable injury if the order takes effect, and the public interest clearly favors” allowing the rules to become effective in June. “We are confident that the court will deny the request for a stay,” she said. AT&T and the NCTA were joined in the stay request by Centurylink, CTIA -- The Wireless Association, the American Cable Association, US Telecom and the Wireless Internet Service Providers Association.

FCC Contemplates Subsidized Broadband Services

[Commentary] The Federal Communications Commission is contemplating a new universal service program that would subsidize broadband services for low-income consumers, and it is looking to use its Lifeline program, which currently subsidizes low-income telephone service consumers, as the model to follow. However, a closer look at the history of the billion-plus Lifeline program shows a wasteful and fraud-laden program that taxes virtually all telephone service consumers and subsidizes millions ineligible consumers in order to help a few.

A recent Government Accountability Office report strongly concluded that an evaluation of the program is needed before going forward. Rather than serve only the truly needy, the Lifeline program has more recently morphed into a wireless telephone service giveaway program. Using a measure of price sensitivity calculated by a group of economists in their Lifeline study, I estimate that providing a 50 percent price reduction to 100 low-income households would stimulate just one new subscriber at roughly the cost of $1,000 per month. In other words, the program pays a lot of money and it taxes a lot of people for very little benefit to society as a whole. This is all the more reason for the current program to be revamped, dramatically downsized and better targeted to those truly needy, such as those in homeless shelters, remote Indian reservations and similarly impacted groups. Lifeline is certainly not the model worth replicating for the burgeoning broadband services market. Simply put, more regulations and higher taxes are not the solution to advancing broadband service penetration. The FCC needs to rethink its position and revamp Lifeline.

[Steve Pociask is president of the American Consumer Institute Center for Citizen Research]

What the USA Freedom Act giveth, and taketh away

[Commentary] If you are in communication with a foreign-based group that the US government is targeting for the purpose of obtaining “foreign intelligence information,” or even if that foreign-based group knows who you are, then the government will be able to collect your phone records if the current version of the USA Freedom Act becomes law. Indeed, if a request for phone records does not have to be part of an investigation of international terrorism, then the “specific selection term” noted above can be associated with any kind of foreign power -- whether it is a foreign government, a corporation or a nongovernmental organization -- relevant to the conduct of US foreign affairs. Second, in such a case -- that is, under that slightly amended hypothetical government request -- the government would not need to use a “specific selection term” that only “identifies an individual, account, or personal device.” Instead it could use a term “that specifically identifies a person, account, address, or personal device, or any other specific identifier” so long as the identifier “is used to limit, to the greatest extent reasonably practicable, the scope of tangible things sought [in this case, phone records] consistent with the purpose for seeking the tangible things.” This convoluted language seems to mean that any “specific identifier” will qualify as a “specific selection term” if it permits the collection of only the phone records that will enable the government to achieve its purpose. So, if the purpose of the government is broad, such as when it is trying to collect “foreign intelligence information” for the purpose of conducting foreign policy, then the “specific identifier” will be quite expansive, too. That, in turn, implies that a very large amount of American citizens’ phone records will still be scooped up by the NSA and analyzed.

Apologies for the legalese -- but it is the loopholes hidden in that legalese that the intelligence community’s lawyers presumably hope we (and Congress!) will be unable to discover. The bottom line is straightforward enough: In terms of the privacy rights of US citizens, the USA Freedom Act, as currently written, will take away more than it will give back. This could be why the White House, and the NSA, are happy to see it pass.

[HL Pohlman is a professor of political science at Dickinson College]

Hill Heats Up Over Effective Competition

Congress continues to weigh in on the Federal Communications Commission's proposal to presume cable operators are subject to competition absent a showing to the contrary. Currently, the presumption is that a local market is not competitive. A finding of effective competition by the FCC relieves operators of local basic cable rate regulations. The latest salvos came from both sides of the aisle and of the issue, and came as the FCC was expected any day to circulate an order on the issue.

In a letter dated May 13, House Communications Subcommittee Ranking Member Anna Eshoo (D-CA) joined with Rep Steve Scalise (R-LA) to support the FCC's proposal to "update" the effective competition provision. They pointed to legacy regulation as an impediment to enhanced flexibility and choice -- the presumption dates from the 1992 Cable Act, which dates from a time when cable operators had a 95 percent multichannel video programming distributor (MVPD) market share, which is now a tad over 50 percent. They pointed to the time-consuming and costly requirement of the effective competition provision, and said that not making cable operators engage in long and costly proceedings allows more flexible packaging options to consumers. They also said saving FCC resources would be saving taxpayer dollars. On the other side, House Commerce Committee Ranking Member Frank Pallone (D-NJ), in a letter also dated May 13, asked FCC Chairman Tom Wheeler to think hard about the impact of reversing the presumption, pointing to a New Jersey franchising authority's concerns and the impact of the move on consumers. He also said that the FCC could simply streamline the petition process and leave the larger question about reversing the presumption for another day, basically inviting him to punt on the proposed reversal.

Legal battle will not stop slimmed-down TV plans for cord cutters

Cable and satellite television companies fighting to retain customers in the face of online competition say a high-profile legal battle will not stop them from experimenting with ways to attract younger viewers. Walt Disney Co's ESPN has sued to stop Verizon from making its sports channel part of an add-on option for customers of its new Custom TV package, a legal fight that has been the talk of industry conferences and discussions with investors and analysts. Distributors say their contracts give them room to test other types of packages for a portion of their customers and that they will continue rolling out so-called "skinny" bundles of channels with fewer options at lower prices. Defections by younger viewers are threatening the future of traditional pay TV. Distributors see slimmer plans as a lifeline to a generation that watches online services such as Netflix and Google's YouTube. If they can entice viewers with cheaper plans, the hope is that they can later move them to the more expensive subscriptions with hundreds of channels. That could help preserve their subscriber base of roughly 100 million customers.