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May 2015

Bipartisan FCC Process Reform Act Resurfaces

A Federal Communications Commission process reform bill is being reintroduced in the House Communications Subcommittee and will be one of the subjects of a May 15 hearing on agency transparency and reforms. House Communications Subcommittee Chairman Greg Walden (R-OR), Ranking Member Anna Eshoo (D-CA) and Rep Adam Kinzinger (R-IL) have circulated a discussion draft of the FCC Process Reform Act, which passed the House last March but failed to get traction in the Senate.

The National Cable & Telecommunications Association had backed the bill, saying it "furthers the important objective of encouraging greater transparency and predictability in FCC decision making, and ensures that business can continue to invest and innovate with more consistent federal oversight." Among many other things, the bill gives the FCC a year to set minimum comment periods, establishes procedures for putting specific language of a proposed rule in notices of proposed rulemaking and comes up with performance measures for evaluating the effectiveness of rules.

Two Years of Transformative Open Data for Public Good

Two years ago, in 2013, President Barack Obama signed an Executive Order to improve how our government shares information for the benefit of the American people. The EO meant that for the first time in history, Federal government data was required to be open by default with common standards and machine-readable formats. As a result, government information is now more easily discoverable with the necessary safeguards to prevent release of sensitive and personally identifiable information. Data is a vital national resource, empowering Americans to fuel entrepreneurship, innovation, scientific discovery, and economic growth throughout all 50 states.

Through implementation of the Open Data Policy and US Open Data Action Plan, today’s Federal government serves as an engine to expand economic growth and opportunity for all Americans through the release of government data. Moreover, since information about government operations is more readily available, this data helps create a more efficient and transparent government. In opening government data, the United States has proven itself a world leader. Just a few years ago, only a few other countries had national open data sites like data.gov. Now 75 other countries have open data sites and are committed to expanding open government to their citizens. We’re excited to continue implementing the US Open Data Action Plan and we look forward to sharing an update on progress of that implementation soon. We remain committed to helping advance the open data movement worldwide, and look forward to seeing the creative ways that people like you continue to use open data to benefit society.

AOL Has Been in Talks to Spin Off HuffPost as Part of Verizon Acquisition Deal

Apparently, while it has been negotiating its deal to sell to Verizon, AOL has also been in advanced discussions with a number of parties to spin off its flagship Huffington Post content unit. The talks have been most serious with Axel Springer, the German media conglomerate, but a number of private equity firms have also expressed interest in the high-profile property. Sources said the Huffington Post has been valued at above $1 billion in this scenario, which would either be a complete sale or, more likely, structured as a joint venture. The move would be designed to bring in more investment for growth for the Huffington Post, which AOL bought several years ago for $300 million.

High content costs and the ability to monetize those assets, as well as grow them -- AOL also owns TechCrunch and a number of other content properties -- has been hard for the company. And competitors like BuzzFeed and Business Insider have garnered massive fundings to spur expansion. AOL’s earnings report from Q1 spells out the issue quite clearly: Its “Brand” group -- which includes HuffPo and TechCrunch -- grew its revenue by eight percent over the past year and posted operating income of $13 million. Meanwhile, its “Platforms” group -- which specializes in automated ad sales on other publishers’ properties -- grew by 21 percent but lost $10 million. Of course, Verizon could pony up more dough for the site’s leader, Arianna Huffington, part of a alleged strategy on the part of the phone giant to own more content. But sources said Verizon was far more focused on advertising tech and video and that some kind of spin-off or joint venture was far more likely for the Huffington Post.

Verizon is buying AOL for its video content and ad technology

[Commentary] Announcing the deal, Verizon said the acquisition "further drives its LTE wireless video and OTT (over-the-top video) strategy." Un-jargoned, that means video that Verizon Wireless subscribers can access on their phones, and streaming video that cord-cutting Verizon wired Internet (via DSL or Fios) can watch without a cable television subscription. On that account, this is basically a content acquisition. AOL's portfolio of media brands -- which includes the Huffington Post and other things that don't have AOL logos slapped on them -- produce videos that could be delivered to Verizon customers through Verizon's infrastructure, allowing Verizon to either charge a premium relative to competitors or extract extra value through ad sales. Verizon making a content deal makes some sense. But the price paid here seems awfully high. As a professional content man myself, I don't want to devalue what content brings to the table. But the price offered here is more than the combined valuation of BuzzFeed and the New York Times, which sounds like a much more formidable content portfolio.

That said, one asset AOL brings to the table that no other media company has is its ridiculous legacy dial-up business. There is absolutely no point to buying dial-up internet from AOL, but a cohort of confused individuals do it anyway, and this brings in profits. Given the nonexistent growth potential in this business, nobody is going to buy AOL because of the subscriptions, but from a valuation point of view the revenue is real, which means you have to pay for it. That explains some of the premium here, but it's still a bit fishy. The deal could be about ad technology. The answer to the riddle probably lies in something the press releases didn't really deal with: AOL's growing ad tech business, which lets advertisers automate ad buying and distribution.

Verizon-AOL: A War of All Against All

[Commentary] When Steve Jobs released the first iPhone in June 2007, Apple and Verizon were worth almost exactly the same in the public markets: About $115 billion. What came over the next eight years was one of the greatest transfers of power and wealth in corporate history. Mobile phone operators -- who had been brutish, intractable gatekeepers to the customer -- were turned into Apple’s lackeys. The customer was still spending money with the carriers, but now she was spending far more with Apple. Today Apple is worth about $735 billion, nearly double that of Verizon and AT&T combined. The carriers still love to romance the “power of the network,” but this has the feel of a crumbling empire, vainly proclaiming its domain over places long overrun. The shock announcement of a Verizon purchase of AOL makes these big changes ever more clear. Physical communications networks are less of a competitive advantage. They are becoming table stakes.

Google and Facebook are launching gliders and blimps and laying fiber in the ground; cable TV operators are deploying Wi-Fi workarounds; there are now mobile-phone carriers in which Wi-Fi is the default; and cellular technology is the backup. Neither Verizon nor AT&T is going away. But their place in the world seems ever more insecure. Over the long-term it seems the benefits will accrue to the company that can stitch everything together -- software, connectivity, content -- into one undeniable package. Right now, the advantage seems strongest with Facebook and Google. Of course, that was precisely the idea of the wretched ur-merger of AOL and Time Warner. A generation later, we are still chasing its ideal, with Verizon just the latest to pick up the harpoon and pursue the great white whale.

Verizon just bought Engadget and TechCrunch -- can they stay independent?

Verizon is buying AOL for $4.4 billion, and it's pretty clear that the emphasis is on mobile, video, and ad tech -- AOL CEO Tim Armstrong's memo announcing the deal made that clear. But there's zero mention of editorial independence in Armstrong's memo, which has to be troubling for the staff at The Huffington Post, Engadget, and TechCrunch, all of which cover technology. Engadget and TechCrunch in particular are two of the world's largest and most influential tech publications (and, of course, competitors to The Verge), and it's not at all clear how they can continue to offer independent commentary on tech and mobile. Just last year in 2014 Verizon launched and then was forced to shutter a tech blog called SugarString after it was revealed that writers were forbidden from writing about network neutrality. That's not a good sign.

Apparently, there's a possibility AOL will spin off or sell its content brands -- German conglomerate Axel Springer is apparently in the mix. That might be the best possible situation here; unless Verizon and AOL can commit to full editorial independence, the looming specter of a Verizon executive getting mad about coverage and making a phone call will be too hard to ignore. Running a media company isn't like running a mobile operator; the value comes from journalistic integrity and independence. That's not a lesson many companies learn quickly.

Verizon FiOS Stays Atop Netflix ISP Rankings

Verizon FiOS retained its crown as the speediest major US Internet service provider as viewed through the Netflix lens, producing an average Netflix streaming speed of 3.55 Mbps during primetime hours for the month of April. According to the latest Netflix’s ISP Speed Index, Cox Communications was next, with an average of 3.49 Mbps, just enough to edge past Cablevision Systems (3.48 Mbps). Netflix noted in a blog post that streaming speeds over Cox’s network has been steadily increasing, up from 3.11 Mbps in November 2014.

Among other movers, Time Warner Cable (3.29 Mbps) jumped one spot, to No. 7, swapping places with Mediacom Communications (3.26 Mbps). AT&T-DSL (2.32 Mbps) and CenturyLink (2.30 Mbps) also jumped two spots, while Frontier Communications (2.28 Mbps) dropped one slot, to number 13, and Windstream Communications (2.25 Mbps) dropped three spots, to No. 14, putting it ahead of only Verizon-DSL and Clearwire. In Netflix’s expanded results for the US, Google Fiber (3.63 Mbps) continued to top all ISPs, outpacing Grande Communication, Verizon FiOS, EPB, CDE Lightband, and Midcontinent Communications.

Post-Snowden, NSA Crafts New Plan to Protect National Secrets

In the aftermath of Edward Snowden's revelations, the National Security Agency has "reached a point where a single individual can cause catastrophic harm," said NSA's first chief risk officer, Anne Neuberger. Named CRO last September, Neuberger described the philosophy behind NSA's nascent risk management framework, saying it's a system that measures the risks of each decision and each program. The agency has been developing its own framework over the past several months, and "building a common definition of what low, medium and high risk means" and that the value of a program's mission "always exceeds that risk." The framework could include principles such as not putting an employee's life at risk "without X approval, without Y value determinant," she said. It could also help employees assess, and potentially mitigate, the risk of sharing sensitive information.

Being transparent with employees about that kind of framework shows employees "the way we as an enterprise value you, the value of your work, [and] how we approach that value." The agency should then continually assess, and re-assess that framework, Neuberger said. A risk management framework might also pay more attention to risk indicators that could tip them off to potential problems, Neuberger said. She noted, for instance, an influx of letters to Congress about the Department of Veterans Affairs -- mostly from veterans complaining about extended wait times and lack of care -- indicated that some programs were at risk of failing.

Government surveillance: Turmoil and division in the EU and US

[Commentary] Huge battles have broken out on both sides of the Atlantic regarding the terms and extent of government surveillance over citizens and organizations in the fight against terrorism. In the United States, Congress is deeply divided over legislation either to extend or curb the National Security Agency’s domestic and international surveillance activities. And with a June 1 deadline looming over current NSA legal authority in these areas, a US court of appeals last week further muddied the waters when it declared “illegal” the NSA’s sweeping metadata program. In Europe, there is a cacophony of voices and actions, with individual states such as France and Germany moving in opposite directions in their responses to the challenges. The French government has been developing surveillance legislation for over two years, but the horrific Charlie Hebdo massacre galvanized the effort to produce concrete action. On May 5, the lower house of the French Assembly passed a new law granting wide-ranging new authority to French intelligence agencies, largely unburdened with administrative or judicial oversight and review. Under the new law, the government would be allowed to tap phone calls, read e-mails, conduct bulk collection and analyze data, as well as force Internet providers to comply with requests to sift through subscribers’ communications.

It is inconceivable that Germany would enact legislation such as that which passed in France. Taken together, the contrasting details of events in Germany and France give a preview of a future where European states will not act in unison over government surveillance, and indeed may act across purposes. This stands in great contrast to the developing story in the United States, where, one way or another, Congress will adopt over the next month a unified federal position, either by default or through issuing a new mandate as current legislative authority over domestic surveillance lapses.

[Claude Barfield is a former consultant to the Office of the US Trade Representative]

May 12, 2015 (Verizon to Acquire AOL)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, MAY 12, 2015

Spectrum Management Advisory Committee and The Impact of Technology Transitions on Rural Communities https://www.benton.org/calendar/2015-05-12

PRIVACY/SECURITY
   With deadline looming, the future of government spying is in flux
   White House backs bill that would end NSA bulk collection of phone records [links to web]
   Sen Wyden pledges to filibuster rubber-stamp Patriot Act [links to web]
   Sen Paul: NSA court ruling should spur President Obama to stop bulk collection of phone records [links to web]
   Tech Groups, Progressives Write In On USA Freedom Act [links to web]

INTERNET/BROADBAND
   AT&T to fix Internet congestion before it can be hit with complaint - analysis
   Sony would probably buy fast lanes in a world without net neutrality
   Title II Petitioners Must Combine Arguments
   Quo Vadis, Net Neutrality? - CommLawBlog analysis
   Dot What?: The surprisingly interesting history of the Internet domain system. - Danielle Kehl/New America Fdn op-ed
   ICANN’s accountability and transparency mechanisms need to be in place before the IANA transition takes place - AEI op-ed
   Unique Event Launches FTC Alabama Gigabit Service [links to web]

SPECTRUM/WIRELESS
   Licensed Spectrum for Commercial Wireless Networks Generates More Than $400 Billion in Annual Economic Activity for America - CTIA press release [links to web]
   A New Way Forward With the FCC's DE Program - AT&T press release
   T-Mobile to shut down legacy MetroPCS CDMA network on June 21 [links to web]

OWNERSHIP
   Verizon to Acquire AOL - press release
   AT&T-DirecTV deal poses threat to consumers - Troy Wolverton editorial

ADVERTISING
   Comcast Hires SS+K to Help Bridge the Digital Divide [links to web]

TELEVISION/RADIO
   Public TV Groups Seek FCC Help for DBS Carriage [links to web]
   Why Some Low-Rated TV Shows Keep Getting Renewed [links to web]
   Radio is the most stable part of the music industry, but that's not a high bar to clear [links to web]
   Pay-TV Decline Strikes a Cord - analysis [links to web]

ELECTIONS AND MEDIA
   Sen Rand Paul Talks About Appealing to Young People on Tech Issues
   Why Is DC Media "Primed To Take Down Hillary Clinton"? - Eric Boehlert analysis [links to web]
   Joining the Chorus: GOP Presidential Hopefuls Take On Title II - editorial

CONTENT
   Publishers Warily Embed With Facebook [links to web]

FCC REFORM
   House Communications Subcommittee closing in on FCC reform vote

LOBBYING
   This think tank fundraising e-mail offers a disconcerting glimpse into how Washington works [links to web]

POLICYMAKERS
   The White House Names Dr. Ed Felten as Deputy US Chief Technology Officer

STORIES FROM ABROAD
   For most countries, a nationwide Internet outage is a big deal. For North Korea, it’s routine. [links to web]

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PRIVACY/SECURITY

WITH DEADLINE LOOMING, THE FUTURE OF GOVERNMENT SPYING IS IN FLUX
[SOURCE: Washington Post, AUTHOR: Andrea Peterson]
The decision ruling the NSA domestic phone records program illegal by the US Court of Appeals raised the stakes on Capitol Hill, where Senate Majority Leader Mitch McConnell (R-KY) is advocating for an extension of Section 215 of the Patriot Act through 2020. But that would likely push the issue to the Supreme Court to settle. On the other side of the debate, long-time government surveillance critic Sen Ron Wyden (D-OR) threatened to filibuster a short-term extension of the law "unless there are major reforms like getting rid of this bulk phone record collections." Sen Wyden is a supporter of the USA Freedom Act, a compromise bill that supporters say would effectively end the government's bulk collection of phone records by requiring the agency to request information from service providers instead of maintaining its own database. But the bill, which would extend the altered version of Section 215 through 2019, has split privacy advocates. Some groups argue that the legislation might impede the progress being made in court challenges of surveillance programs or more comprehensive legislative reform efforts. The deciding factor, more than anything at this point, may be time. While the official deadline for Section 215 is June 1, Congress has a recess scheduled for the last week of May -- meaning the effective deadline is more like May 22. The House Judiciary Committee has passed a version of the USA Freedom legislation and the bill is scheduled for a floor vote -- which it is expected to pass. The real action is likely to be in the other chamber. "Start popping your popcorn and find a comfy chair, because it looks to be a dramatic couple of weeks in the Senate," said Kevin Bankston, the policy director at New America's Open Technology Institute and a supporter of the bill. "There’s no way there are 60 votes in the Senate for a clean [Section 215] reauthorization, and the clock is running down fast."
benton.org/headlines/deadline-looming-future-government-spying-flux | Washington Post
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INTERNET/BROADBAND

AT&T TO FIX INTERNET CONGESTION BEFORE IT CAN BE HIT WITH COMPLAINT
[SOURCE: ars technica, AUTHOR: Jon Brodkin]
[Commentary] With a month left before network neutrality complaints can be filed to the Federal Communications Commission, Internet service providers are continuing to sign agreements to prevent network congestion and a potential scolding from regulators. The latest agreement was announced between AT&T and Level 3, an Internet backbone operator that has accused broadband providers like AT&T of not upgrading interconnection points, allowing Internet performance for consumers to be degraded. In April, Level 3 said that it was "evaluating our options" and "still experiencing interconnection point congestion as some large consumer Internet service providers continue to attempt to leverage control over access to their users to extract arbitrary tolls." While the FCC's net neutrality order bans paid prioritization of traffic after it enters providers' networks, it doesn't ban payments for interconnection, which happens at the edges of the network. However, the FCC set up a complaint process so it can decide whether particular demands are unreasonable and prod companies into providing enough capacity to prevent Internet slowdowns. Complaints can be filed beginning June 12. The Level 3/AT&T congestion should be eliminated because of the new agreement. The "long-term, bilateral interconnection agreement for their IP networks... will result in improved efficiency of traffic exchange, and the additional capacity and new interconnection locations between the networks will allow customers to continue to experience high-quality performance and network reliability," the companies said. The companies did not say whether Level 3 is paying AT&T for interconnection. Level 3 may not have to pay because the FCC's new complaint process provides leverage to network operators who insist that they should not have to pay for network connections.
benton.org/headlines/att-fix-internet-congestion-it-can-be-hit-complaint | Ars Technica
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SONY WOULD PROBABLY BUY FAST LANES IN A WORLD WITHOUT NET NEUTRALITY
[SOURCE: The Verge, AUTHOR: Jacob Kastrenakes]
Sony Pictures executives spent months discussing how they should handle the subject of network neutrality. As revealed in a series of leaked e-mails, executives waffled on whether or not they should file a comment with the Federal Communications Commission to present their view. Ultimately, Sony declined to file because of concerns that it was difficult to get the entirety of Sony on the same page, that Sony may not be able to add much value to the discussion, and that Sony could end up burning some bridges. But during the months leading up to the comment filing deadline in mid-September, Sony executives were still discussing what they would write in a filing, should they decide to comment. While there was no final consensus, Sony appeared to move more and more toward supporting paid fast lanes as the September deadline approached. Sony Pictures and other Sony units such as Crackle "are in the premium content business and do not want to be on equal footing with a random 'mom and pop' video streaming service," Keith Weaver, Sony Pictures' executive vice president of worldwide government affairs, wrote in early July. About a week later, Jim Morgan, Sony Electronics' government counsel, wrote that he was cutting out comments that touched on fast lanes because "[Sony Pictures Entertainment] or other parts of Sony may want to take advantage of paid prioritization, and so doesn’t want to be constrained by any arguments we make in these comments." Basically, Sony writes that it can see itself wanting to use paid fast lanes to help its many content businesses, be it delivering video games, movies, or something else. "The bottom line," Weaver wrote just over a week before the filing deadline, "net neutrality rules should not apply to content producers."
benton.org/headlines/sony-would-probably-buy-fast-lanes-world-without-net-neutrality | Verge, The
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TITLE II PETITIONERS MUST COMBINE ARGUMENTS
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
It could take cable and telecommunications company operators a few more days to put together their combined request that the US Court of Appeals for the DC Circuit stay the June 12 effective date of the Federal Communications Commission's Title II reclassification order until the court hears their underlying legal challenge. The court on May 8 denied a motion by the National Cable & Telecommunications Association and American Cable Association to exceed the 20-page stay request page limit by allowing the two groups to file a single, 35-pager. Instead, the court will require all the petitioners -- more than a half dozen -- to file a single, 35-page brief; the FCC will get to file 35 pages in response, and the petitioners may file 18 pages in response to that. Given that the lawyers now have to get together on a single request, it could take more time. Also adding to the time is the fact that the same parties sought stay requests from the FCC first. The FCC denied those last week, but in doing so made numerous points about why the stay should be denied, points that the parties will likely respond to in buttressing their argument for the court stay.
benton.org/headlines/title-ii-petitioners-must-combine-arguments | Multichannel News
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QUO VADIS, NET NEUTRALITY?
[SOURCE: CommLawBlog, AUTHOR: Harry Cole]
[Commentary] Just because the Federal Communications Commission finally released its behemoth Report and Order (R&O) in the network neutrality proceeding in April, don’t think that the fun and games are over. Not by a long shot. Au contraire, the battles rage on … and they will soon be waged in two separate arenas, the FCC and one or another US Court of Appeals. As might be expected, we’re already seeing new twists and turns that may further complicate an already complicated proceeding. When the FCC releases a decision, folks unhappy with the decision generally have two obvious options: they may go back to the FCC and seek reconsideration, essentially trying to convince the Commission to change its mind; or they can run to an appropriate US Court of Appeals, in which case they are asking the court to tell the FCC that its decision was in some way(s) flawed. In a rulemaking proceeding (like net neutrality), it’s not unusual for some disgruntled parties to take one approach which others take the second approach. And that’s the way things seem to be shaping up here.
benton.org/headlines/quo-vadis-net-neutrality | CommLawBlog
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DOT WHAT?: THE SURPRISINGLY INTERESTING HISTORY OF THE INTERNET DOMAIN SYSTEM.
[SOURCE: Slate, AUTHOR: Danielle Kehl]
[Commentary] On a daily basis, you probably type dozens of URLs into your browser to get the websites where you read the news, check your e-mail, access your bank records, and shop online. But chances are you don’t know much about the complex, decentralized naming and numbering system that makes it all work behind the scenes -- or the worldwide discussion about who should be responsible for overseeing this system when the US government gives up that role at the end of 2015. Few people know much, if anything, about the Internet’s Domain Name System, or DNS, which helps keep the Internet working on a technical level. Yet it’s a critically important piece of the network’s underlying infrastructure -- it’s how you can be confident that when you type a URL like "http://www.slate.com" into your Web browser, you’ll get to the website you intend to visit. And pretty soon it could be under new oversight as the US government gives up its formal role in the DNS. The transfer of DNS oversight from the US government to the global multi-stakeholder community is an important moment in the evolution of the global Internet, and if successful will prove that critical Internet resources can be managed by the global Internet community.
[Danielle Kehl is a policy analyst at New America's Open Technology Institute]
benton.org/headlines/dot-what-surprisingly-interesting-history-internet-domain-system | Slate
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ICANN'S ACCOUNTABILITY AND TRANSPARENCY MECHANISMS NEED TO BE IN PLACE BEFORE THE IANA TRANSITION TAKES PLACE
[SOURCE: American Enterprise Institute, AUTHOR: Shane Tews]
[Commentary] Since the inception of the Internet Corporation for Assigned Names and Numbers (ICANN) the US government has always planned to transition oversight of the Internet Assigned Numbers Authority (IANA) functions to a private-sector-led organization that could better adapt to the increasingly global, rapidly changing nature of the Internet. True to this goal, Assistant Secretary Larry Strickling announced in March 2014 that the Department of Commerce would allow its IANA functions contract to expire if an appropriate transition plan was put in place by September 30, 2015. Since 2014’s announcement however, many of us who monitor ICANN have worried about the IANA functions contract being dissolved before the accountability and transparency structure of ICANN has been assured. Due to the importance of the IANA functions to the core existence of the current Internet infrastructure and the digital global economy, it is critical that the IANA functions remain in capable and accountable hands. Once a suitable accountability structure is in place, ICANN can be given the independence it desires, and oversight can move away from one government and towards the global community. Any transition process should recognize the “backstop” function currently provided by the US government and replace it with a multi-stakeholder accountability function that can ensure ICANN’s stability and legitimacy moving forward. Once this global safety net is established, the IANA functions should be the next big item up for discussion, but not before then.
[Shane Tews is the Chief Policy Officer at 463 Communications]
benton.org/headlines/icanns-accountability-and-transparency-mechanisms-need-be-place-iana-transition-takes | American Enterprise Institute
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SPECTRUM/WIRELESS

A NEW WAY FORWARD WITH THE FCC'S DE PROGRAM
[SOURCE: AT&T, AUTHOR: Joan Marsh]
In the wake of the AWS-3 auction, there has been a broad, bipartisan call to reform the [Federal Communications Commission]’s Designated Entity, or DE, program. When the veil of the auction was lifted, we all learned that some bidders attempted to use the rules to obtain a windfall, and, in the process, prevented the intended beneficiaries of the program -- small business and rural [telecommunications companies] -- from obtaining valuable spectrum licenses. For this reason, AT&T is pleased to join a group of small carriers in proposing a new way forward. Together, we envision a DE program that redefines ‘small business’ in a way that is more aligned with the structure of the modern wireless industry and that seeks to benefit true small entities -- many of which operate in rural America. To avoid incentives for abuse, we propose a strict cap of $10 million on the bidding credit available to any individual eligible applicant -- an amount that will provide a meaningful benefit to the very types of business the program is designed to benefit while ensuring policymakers that those who seek to abuse the program will not be rewarded. We also support strict build requirements as we believe scarce spectrum resources should be licensed only to those willing to deploy them for the benefit of US consumers. We believe that this proposed framework provides strong footing for a logical, equitable and sustainable Designated Entity program -- one that encourages broad participation at auction and diverse opportunity in the industry while closing loopholes attractive to those interested only in speculation or financial arbitrage. We hope the FCC will give the proposal careful consideration.
benton.org/headlines/new-way-forward-fccs-de-program | AT&T
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OWNERSHIP

VERIZON TO ACQUIRE AOL
[SOURCE: Verizon, AUTHOR: Press release]
Verizon Communications agreed to purchase AOL (America Online) for $50 per share -- an estimated total value of approximately $4.4 billion. The combination of Verizon and AOL creates a scaled, mobile-first platform offering directly targeted at what eMarketer estimates is a nearly $600 billion global advertising industry. AOL’s key assets include its subscription business; its premium portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, as well as its millennial-focused OTT, Emmy-nominated original video content; and its programmatic advertising platforms. Lowell McAdam, Verizon chairman and CEO, said: “Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.” The transaction will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon upon completion. The transaction is subject to customary regulatory approvals and closing conditions and is expected to close this summer.
benton.org/headlines/verizon-acquire-aol | Verizon
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AT&T-DIRECTV POSES THREAT TO CONSUMERS
[SOURCE: San Jose Mercury News, AUTHOR: Troy Wolverton]
[Commentary] AT&T's bid to buy DirecTV has been floating under the radar, drawing neither the scrutiny nor the scorn of Comcast's recently abandoned proposal to buy Time Warner Cable. But that doesn't make the deal any better for consumers. If the reports and rumors coming out of Washington are true, federal regulators are likely to wrap up their review of the AT&T-DirecTV merger soon, and are likely to approve it. That would be a grave mistake. Having allowed way too much consolidation in the past, regulators should be pushing for more competition in the telecommunications market, not acquiescing to less. Less competition is exactly what you'd get if AT&T and DirecTV are allowed to merge. The regulators ought to just flat-out reject the merger. Any potential benefits it may offer to consumers are questionable at best, and the potential harms are all too certain.
benton.org/headlines/att-directv-deal-poses-threat-consumers | San Jose Mercury News
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ELECTIONS AND MEDIA

SEN RAND PAUL TALKS ABOUT APPEALING TO YOUNG PEOPLE ON TECH ISSUES
[SOURCE: National Journal, AUTHOR: Eric Garcia]
In a speech in San Francisco (CA), Presidential candidate Sen Rand Paul (R-KY) told Silicon Valley conservatives that he could win over Californians and other voters not normally associated with the Republican Party largely on issues of civil liberties and technology. At the Disrupting Democracy speaker series hosted by Lincoln Labs, a tech-friendly conservative organization, Sen Paul made the case for appealing to younger voters by way of ending mass data collection, an activity he said went against one of the main reasons young people voted for Barack Obama in 2008. "I also think people who voted for President Obama was because they thought he was a civil libertarian," Sen Paul said. The speech was part of Sen Paul's message of reaching to nontraditional GOP voters. Sen Paul made the case that criminal justice reform could be a way to appeal to voters, noting that the Republican Party often touts itself as the party of the Second Amendment. "I want to also be the party of the First Amendment, the Fourth Amendment but also the Fifth and Sixth Amendment," Sen Paul said. As part of this, Sen Paul talked about restoring the right to vote for convicted felons. Sen Paul also held firm to his opposition to network neutrality, saying he had not seen concerns about Internet monopolies that could control rates being manifested. "I don't think there is yet evidence that there's absolute control of rates," adding if there was any organization involved with monopolies, it was government monopolies. He also dismissed the idea that it would make it harder for small startup companies to succeed. "The government didn't create Facebook and the government didn't create Google," he said.
benton.org/headlines/sen-rand-paul-talks-about-appealing-young-people-tech-issues | National Journal
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JOINING THE CHORUS: GOP PRESIDENTIAL HOPEFULS TAKE ON TITLE II
[SOURCE: Broadcasting&Cable, AUTHOR: Editorial Staff]
[Commentary] The GOP Presidential field is filling up with candidiates very publicly opposed to the Federal Communications Commission’s Title II push -- Sens Ted Cruz (R-TX), Marco Rubio (R-FL), and now Carly Fiorina. Having run computer giant Hewlett-Packard, Fiorina has definite ideas about why the government should not try to run Internet companies.After the FCC’s February vote to reclassify Internet access as a Title II service, Fiorina took to the Web in an op-ed on CNN's website. “Title II regulation gives the Federal Communications Commission nearly unlimited authority to micromanage how, when and where Internet companies innovate,” she wrote. Fiorina was echoing arguments made by cable and telecommunications officials, who have asked the FCC to stay enforcement while a federal court decides whether the commission got it wrong yet again. At issue is whether the commission broadly asserted authority over not only the last-mile connections to the home, but interconnections between large companies with competing financial interests. “Whereas the old Internet was ‘permission-less,’ the new Internet will require bureaucratic approval for the most mind-numbing minutiae and create huge areas of uncertainty,” Fiorina continued in her opinion piece. “Major companies such as Google, Facebook, Amazon, eBay and Netflix now have a government-conferred advantage over start-ups because they can afford the lobbyists and lawyers necessary to navigate the new Title II landscape. When influence trumps innovation, big entrenched companies benefit.” We could quibble with some of her language (are cable operators “big entrenched companies?”), but the fact that Fiorina and other GOP hopefuls are taking aim at Title II is noteworthy. Let the debate play out far beyond the INTX convention hall in Chicago (IL).
benton.org/headlines/joining-chorus-gop-presidential-hopefuls-take-title-ii | Broadcasting&Cable
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FCC REFORM

HOUSE COMMUNICATIONS SUBCOMMITTEE CLOSING IN ON FCC REFORM VOTE
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
The House Communications and Technology Subcommittee is readying the first votes on process reform at the Federal Communications Commission since the FCC approved controversial network neutrality rules earlier in 2015. The subcommittee will take up a host of reform bills proposed by both Democrats and Republicans. Republican commissioners on the FCC have taken an active role in FCC oversight since the FCC approved net neutrality rules that would reclassify broadband Internet access under rules governing traditional telephones. Democrats have said many of the Republican reforms seem to be “political retribution” for the net neutrality vote, which is strongly opposed by Republicans and Internet service providers. Many of the GOP proposals harken back to the net neutrality debate. Republicans criticized FCC Chairman Tom Wheeler for not releasing the text of the regulations ahead of the vote and for taking weeks after the vote to finally make it public. One of the GOP bills would require the FCC to publicly release draft rules ahead of a vote, at the same time commissioners get to see them. Another would force the FCC to publish the finalized rules the day they are approved. The third proposal would require the FCC to publicly list the actions the FCC takes at the staff level. The subcommittee is slated to hold a hearing on the Democratic proposals on May 15, which subcommittee Chairman Greg Walden (R-OR) said make “a lot of sense.” The Committee will also debate the draft FCC Process Reform Act, which has won support from Chairman Walden, Rep. Adam Kinzinger (R-IL) and the subcommittee’s Ranking Member Anna Eshoo (D-CA).
benton.org/headlines/house-communications-subcommittee-closing-fcc-reform-vote | Hill, The
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POLICYMAKERS

THE WHITE HOUSE NAMES DR. ED FELTEN AS DEPUTY US CHIEF TECHNOLOGY OFFICER
[SOURCE: The White House, AUTHOR: Alexander Macgillivray, Megan Smith]
The White House Office of Science and Technology Policy is announcing that Dr. Ed Felten is joining the team as Deputy US Chief Technology Officer. Dr Felten joins a growing number of techies at the White House working to further President Barack Obama’s vision to ensure policy decisions are informed by our best understanding of state-of-the-art technology and innovation, to quickly and efficiently deliver great services for the American people, and to broaden and deepen the American people’s engagement with their government. Dr Felten's expertise in the intersection of public affairs and computer science has led him to experiences in government, academia, and advising. Currently, he serves as the Robert E. Kahn Professor of Computer Science and Public Affairs at Princeton University, where he is also the founding Director of the Center for Information Technology Policy. Before rejoining the Princeton faculty, Dr Felten served as the first Chief Technologist at the US Federal Trade Commission, and worked with the US Department of Justice Antitrust Division. He has published more than 100 papers and two books on technology law and policy. Dr Felten is a member of the National Academy of Engineering and the American Academy of Arts and Sciences, and is a Fellow at the Association for Computing Machinery. He earned his bachelor’s degree in Physics with Honors from the California Institute of Technology and his master’s and doctoral degrees in Computer Science and Engineering from the University of Washington.
benton.org/headlines/white-house-names-dr-ed-felten-deputy-us-chief-technology-officer | White House, The | Washington Post
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