May 2015

Frontier gets FTC approval to proceed with Verizon asset deal

Frontier Communications has received Federal Trade Commission approval for its pending acquisition of Verizon's wireline operations in California, Florida and Texas, clearing one of the initial hurdles to complete the deal. The FTC has granted early termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Initially announced in February, the expiration of the required waiting period under the act satisfies one of the conditions of the completion of the transaction. However, Frontier still has to gain approvals from the FCC and state public utility commissions in California, Florida and Texas. Frontier expects the sale to close in the first half of 2016.

ACLU Pushes for Probe of Alleged Bias Against Women in Hollywood

The American Civil Liberties Union is asking US and California civil-rights agencies to investigate alleged bias against women in the Hollywood film and TV industry. The organization’s Southern California chapter and the national ACLU Women’s Rights Project are providing data to the agencies that they say reveal dramatic disparities in the hiring of women directors in TV and on big-budget films. The ACLU also supplied anecdotal accounts from 50 women directors. “Blatant and extreme gender inequality in this large and important industry is shameful and unacceptable,” said Melissa Goodman, director of the ACLU SoCal’s LGBTQ, Gender & Reproductive Justice Project. “The time has come for new solutions to this serious civil-rights problem.”

The complaint was sent to agencies including the California Department of Fair Employment & Housing and the US Equal Employment Opportunity Commission. It escalates recent criticism of Hollywood studios from women’s rights groups. Fahizah Alim, a spokeswoman at the California Department of Fair Employment & Housing, said agency staff “is in the process of reviewing the letter and its claims.” EEOC officials received the ACLU letter and “are carefully considering its contents,” said Christine Nazer, a spokeswoman. “It’s certainly been clear for years that women are terribly underrepresented as directors in Hollywood, and there’s no real reason for it,” said Bonnie Eskenazi, a partner specializing in entertainment litigation at Greenberg Glusker in Los Angeles. “It goes back to the kinds of biases that we as women face all the time when we’re trying to break through the glass ceiling and achieve positions of power.”

Rep Hoyer: Senate would be 'wise' to end NSA data collection

House Minority Whip Steny Hoyer (D-MD) is urging Senate leaders to end the government's bulk collection of phone records. Minority Whip Hoyer said Senate Majority Leader Mitch McConnell (R-KY) should scrap plans to extend existing provisions of the Patriot Act -- including the controversial language used by the National Security Agency (NSA) to justify its controversial surveillance program -- and instead adopt the bipartisan House bill that ends the bulk collection.

"I don't know what the Senate's going to do, but I think the House is going to pass a bipartisan bill which I think has broad support and the Senate would be, I think, wise to take that up and pass it," Minority Whip Hoyer said. "The House version is a good model for the Senate to follow, and I would hope they would do it." Minority Whip Hoyer said he's hoping the US Court of Appeals ruling on NSA surveillance will make the House bill "more palatable" in the eyes of lawmakers like Majority Leader McConnell as they work to extend the Patriot Act ahead of the June 1 deadline. "The court decision has got to have made … somewhat of an impact on his thinking," he said. "It should have."

The 'Privacy Coalition' That Wants to Trim Data Regulations for Telecom Giants

The "21st Century Privacy Coalition" might sound like the name of a group fighting for stronger privacy protections in the Internet age. But, in fact, it represents some of the nation's largest cable and phone companies, and is working to help those companies escape regulations on how they have to handle customer data. If the group gets its way, Congress would loosen regulations for how companies have to protect sensitive information -- such as what phone numbers you've sent text messages to, what you've watched on television, and potentially even what websites you've visited. The group is led by Mary Bono, a former Republican congresswoman from California, and Jon Leibowitz, a former Democratic chairman of the Federal Trade Commission. Funded by Comcast, AT&T, Verizon, Time Warner Cable, DirecTV, and industry trade associations, the coalition has spent nearly $2 million on lobbying, according to disclosure records. That money has gone to hire lobbyists from two firms: Mayer Brown and Ryan, MacKinnon, Vasapoli, and Berzok. It has essentially one goal: pass the Data Security and Breach Notification Act.

The bill, which cleared the House Energy and Commerce Committee in April, is intended to combat the kinds of massive hacks of personal information that have hit Target, Home Depot, and other companies in recent years. President Barack Obama even urged Congress to act on the issue during 2015's State of the Union address. The House legislation, authored by Rep Marsha Blackburn (R-TN) and Rep Peter Welch (D-VT), would require companies to have "reasonable" security and to notify their customers if their personal information is stolen. The bill generally just covers information that could be used for fraud, such as credit card or Social Security numbers. The 21st Century Privacy Coalition argues that it doesn't make sense for the telecommunications companies to have to comply with a whole separate regulatory regime. So, at its urging, lawmakers included language in the bill that would exempt companies from Federal Communications Commission regulations related to protecting personal information. Like retailers and other businesses, the telecom companies would only have to comply with the "reasonable" security standard enforced by the FTC.

Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions

This guide is prepared in accordance with the requirements of Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It is intended to help small entities -- small businesses, small organizations (non-profits), and small governmental jurisdictions -- comply with the new rules adopted in the Second Report and Order on . [GN Docket No. 12-268; ET Docket Nos. 13-26 and 14-14 FCC 14-157]

Group to FCC: Avoid ‘Walled-Garden’ Approach to Video

The Federal Communications Commission’s pursuit of a successor to the CableCARD continued to heat up as a group comprised of Google, Amazon, Public Knowledge, TiVo and others warned the FCC that putting too fine a focus on downloadable security without addressing the greater goal of furthering the competitive availability of set-tops and other navigation devices “would result in a walled-garden approach.” Members of the group addressed their concerns in a letter to members of the FCC Media Bureau on May 11, ahead of the next scheduled meeting of the FCC-appointed Downloadable Security Advisory Committee (DSTAC), set for May 13.

“The FCC Media Bureau staff’s efforts in coordinating and overseeing the DSTAC should continue to further the Congressional directives in Section 629,” the group wrote in the May 11 letter. “In particular, any solution recommended by DSTAC should ensure that device manufacturers can differentiate retail products from multichannel video programming distributors’ leased products. On that point, they said manufacturers should be able to provide innovative and distinctive features, including unique user interfaces, enhanced search functionality, and improved means for recording and viewing content consistent with copyright law. They also said users of retail devices should be able to access the full complement of MVPD video service offerings, while also being able to pick between “premium devices with advanced functionality” as well as “simpler, lower cost devices according to their preference.” "The DSTAC should achieve a recommendation that functionally supersedes the CableCARD, without a need for the CableCARD hardware,” they added.

What the Verizon merger means for the Huffington Post and AOL’s biggest blogs

At its core, Verizon's $4.4 billion acquisition of AOL is all about online video. The tie-up gives Verizon access to AOL's digital advertising technology, which will help Verizon earn more money off the videos it hopes consumers will stream over their cellular connections. But along with AOL comes a host of very recognizable household brands, such as the Huffington Post, Techcrunch and Engadget, to name a few. One big question emerging is what Verizon will do with these content goliaths. For now, Verizon says everything about AOL will remain the same. Its chief executive, Tim Armstrong, will keep leading AOL, for example. But in the long run, the Verizon acquisition could have big implications for AOL's content properties. Apparently, the Huffington Post could be spun off from Verizon, in part or in whole. AOL bought Huffington Post for about $300 million in 2011, and it may now be worth more than $1 billion.

"The company is spending a fortune to step outside of its core competency" of providing telecommunications service and "into the content production market, where it has already shown a willingness to censor news coverage," said Derek Turner, research director at the advocacy organization Free Press. AOL's media brands will be free to write about those controversial issues even after the deal closes, said Verizon spokesman Edward McFadden. Still, SugarString raised questions about Verizon's content strategy that are likely to persist as the company forges even deeper into the media business. Verizon's merger with AOL will link together two increasingly important components of the Internet economy: Online content, and the pipes necessary to deliver that content to readers and viewers. All of this adds up to a murky future for some of AOL's biggest brands, even if Verizon has no immediate plans to change how they run.

Verizon and Sprint To Pay $158 Million To Settle Mobile Cramming Investigations

The Federal Communications Commission Enforcement Bureau announced that Verizon Wireless will pay $90 million and Sprint Corporation will pay $68 million to settle investigations that revealed the companies billed customers millions of dollars in unauthorized third-party premium text messaging services, a practice called "cramming." With the two cramming cases, the FCC, working together with the Consumer Financial Protection Bureau, the Federal Trade Commission, and states' attorneys general has brought a total of $353 million in penalties and restitution against the US's four largest wireless carriers, structuring these settlements so that $267.5 million of the total will be returned to affected customers. The monthly charge for these third-party premium text messaging services ranged from $0.99 to $14.00, but typically were $9.99 per month. Verizon retained 30 percent or more of each third-party charge that it billed, while Sprint received approximately 35 percent of collected revenues for each of its third-party charges.

Numerous consumers have complained to the FCC, other government agencies, and the carriers that they never requested or authorized the third-party services for which they were charged. Customers who called to complain were often denied refunds, and yet, when the FCC requested proof that customers had authorized charges, the carriers were unable to prove that these services were ever requested. In addition to requiring the carries pay a total of $158 million, the Enforcement Bureau has also secured strong consumer protections in the settlement that reform both internal processes as well as how the company interacts and discloses information to their consumers. These protections include requirements that the carries:

no longer offer commercial third-party PSMS charges
obtain informed consent from customers prior to allowing third-party charges
clearly and conspicuously identify third-party charges on bills
offer a free service for customers to block all third-party charges
regularly report to the FCC on compliance and refunds to customers

Every computer border search requires case-by-case reasonableness, DC court holds

[Commentary] Imagine you’re flying from the United States to a foreign country and you’re carrying a laptop. Federal agents stop you on the jetway as you’re about to board your flight. They want to take your computer and search it. Can they? And if they can do that, what are the limits on how much they can search, for how long, and where? Lower courts have divided on the question. Some courts have concluded that the “border search exception” that the Supreme Court has applied for searches of physical objects should also apply equally to computers. Under that approach, agents can seize and search computers at the border (or at its “functional equivalent,” such as at international airports where passengers are boarding international flights) apparently without limit.

The Ninth Circuit has adopted a different approach, ruling that agents need “reasonable suspicion” to seize and search a computer at the border if the search is a “forensic” search but not if it is a “manual” search. May 8, Judge Amy Berman Jackson of the DC District Court adopted a third approach in a new case called "United States v. Kim". The opinion holds that that every computer search at the border must be justified as reasonable under the totality of the circumstances. After concluding that the search in this case was not reasonable under that test, she suppressed the evidence. I think Judge Jackson’s decision is highly problematic. I won’t be surprised if Justice Department appeals it, as it raises a really important set of questions and answers them in some unusual ways. Will the Court of Appeals agree with Judge Jackson? Time will tell.

[Orin Kerr is the Fred C. Stevenson Research Professor at The George Washington University Law School]

Public Knowledge Urges FCC to Issue NPRM to Protect Consumer Privacy

Verizon announced the acquisition of AOL Inc. for $50 per share, amounting to $4.4 billion. Public Knowledge encourages the Federal Communications Commission (FCC) to issue a Notice of Proposed Rulemaking to secure consumer privacy as broadband carriers leverage their unique relationship with subscribers to harvest private information traditionally considered confidential or proprietary. Whether or not the combination of a major online advertiser with the largest mobile services provider raises substantial antitrust concerns, it raises extremely substantial and urgent privacy concerns. Verizon has already shown an alarming tendency to harvest private information from subscribers to bolster its foray into online advertising. In 2014, privacy advocates revealed that Verizon was using a tracking identifier referred to as a “SuperCookie” to track users without their consent and potentially exposing subscriber information to third parties. Only after significant public pressure did Verizon modify its subscriber tracking program to allow users to ‘opt out’ of having the tracking ID inserted into their bitstream.

Following the reclassification of broadband as a Title II telecommunications service, the FCC began a process to consider how to apply the Title II privacy statute to broadband providers. The Verizon/AOL acquisition underscores the need for the FCC to move quickly to put basic privacy protections in place that recognize the unique and privileged access broadband providers have into our personal communications. Your broadband provider can see your every electronic bill-pay, your every online political contribution, and every website you visit or video you download. Consumers deserve the same protection they currently enjoy for their private phone calls for their private online communications.

Benton

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