May 2015

FCC Allows Pandora to Buy South Dakota Radio Station

The Federal Communications Commission gave Pandora Media permission to buy a small radio station in South Dakota, bringing to an end one of the company’s more contorted fights with the music industry.

In June 2013, when Pandora, an Internet radio service, reached a $600,000 deal to buy KXMZ-FM in Rapid City, S.D., the company said that owning a terrestrial station would give it access to industry deals for cheaper songwriting royalties. Pandora, which competes with radio stations for listeners and advertising, has long complained that it pays much more in total royalties than radio stations do. Music industry groups quickly objected to the proposed deal, however, calling Pandora’s move a “stunt.” Ascap, one of the major music licensing agencies, asked the FCC to block the transaction, citing federal laws that prevent companies from acquiring broadcast licenses if more than 25 percent of their shares are owned by foreigners.

In its ruling the FCC rejected Ascap’s opposition and said that “it would serve the public interest to permit a widely dispersed group of shareholders” to own shares in Pandora.

Live streams of copyrighted content pose a threat to cable giants

The "Fight of the Century" has ignited a battle between cable giants and upstart live-streaming apps.

The conflict centers on video apps such as Twitter's Periscope and rival Meerkat, which allow smartphone users to instantly broadcast anything to anyone, anywhere. Such apps allowed thousands of users to skip the $100 pay-per-view fee for the bout between Floyd Mayweather Jr. and Manny Pacquiao and watch online for free. That poses a serious threat to cable companies that rely on subscribers ponying up big bucks to watch marquee events. The free-for-all adds one more complication for cable companies already reeling from cord cutters switching to cheaper streaming TV platforms such as Netflix. It also poses problems for sports leagues and any other organization with copyrighted content worth protecting.

US trade negotiations like TPP should not be secret

[Commentary] Tech heavyweights such as Apple, Intel and Facebook want to hasten the adoption of free-trade agreements that will help them compete with global rivals. We're sympathetic. So is President Barack Obama. His solution is to give him the authority to fast-track international trade deals by limiting the ability of Congress to participate in them.

Backed by the Silicon Valley Leadership Group and other trade organizations, President Obama is pushing the Bay Area's congressional delegation to get on board so he can accelerate deals such as the Trans-Pacific Partnership, which could enormously help the tech community. But many lawmakers, including Sen. Dianne Feinstein (D-CA) and Reps. Zoe Lofgren (D-CA), Anna Eshoo (D-CA), Mike Honda (D-CA), Jackie Speier (D-CA), Eric Swalwell (D-CA), Mark DeSaulnier (D-CA), Barbara Lee (D-CA) and Jerry McNerney (D-CA), are either undecided or flat against it. Some, such as Reps Lofgren and Eshoo, typically are on tech's side. We're all for free trade, but we see their point. Trust is in short supply in Washington on both sides of the aisle. This is not the time to hunker down on secrecy. Let people see what's in the works and maybe catch fixable problems before they blow up in a yes-or-no showdown.

Cisco CEO John Chambers retires and becomes executive chairman

One of Silicon Valley's longest-serving CEOs, John Chambers, called an end to two decades at the helm of Cisco Systems, leading it as it became the world's most valuable corporation during the dot-com bubble, stabilizing it after the bust but occasionally stumbling as it grappled with the wrenching changes that have shaken the networking industry in recent years. Chuck Robbins, currently Cisco's vice president of worldwide operations, was named the company's new CEO. Chambers, 65, will become executive chairman and continue as board chairman and said he'll stay involved with the company. Chambers' departure comes as a disruptive wave of innovation coming from cloud computing and the much-touted Internet of Things is sweeping through the computing industry.

Senate Bill Would Grandfather TV station joint sales agreements

Sen Roy Blunt (R-MO) introduced a bill that would exempt all television joint sales agreements (JSAs) in effect at the time of the Federal Communications Commission's decision that made most of them attributable as ownership interest.

The one-paragraph bill simply says that parties to JSA's in effect on the effective date of the FCC decision (March 31, 2014) "shall not be considered to be in violation of the ownership limitations..." Sens Barbara Mikulski (D-MD), Chuck Schumer (D-NY) and Tim Scott (R-SC) are co-sponsors of the bill.

Africa’s Mobile-Sun Revolution

[Commentary] Many years of visiting the developing world have taught me that, given the tools, people -- including the very poor -- will quickly and easily put them to uses that exceed even the well-intentioned ideas of the developed world. Poor people want to and can do everything people of means can do, they just don’t have the money. Previously, I’ve written about the rise of ubiquitous mobile payments across Africa, and the work to bring free high-speed Wi-Fi to the settlements of South Africa. One thing has been missing, though, and that is access to reliable sources of power to keep these mobile phones and tablets running. In just a short time — less than a year — solar panels have become a commonplace site in one relatively poor village I recently returned to. I think this is a trend worth noting.

[Sinofsky is a board partner at Andreessen Horowitz]

Vint Cerf warns about plans for technology ‘back doors’

One of the godfathers of the Internet has harsh words for federal efforts to insert “back doors” in digital security systems. “If you have a back door, somebody will find it, and that somebody may be a bad guy or bad guys, and they will intentionally abuse their access,” Vint Cerf, one of the co-founders of the Internet, said during remarks at the National Press Club. “Creating this kind of technology is super-, super-risky,” he added. “I don’t think that that’s the right answer.”

The statement from one of the most respected Internet pioneers adds to a chorus of opposition to the Obama Administration’s efforts to force companies like Google and Apple to create openings in their technological defenses so the FBI and other government agencies are able to get access to people’s information. Law enforcement officials worry that Silicon Valley’s increasing desire to adopt encryption technology -- which has sped up in the wake of disclosures from former government contractor Edward Snowden -- is putting data beyond the reach of police officers who have obtained a warrant.

FCC Plans $100,000 Fine Against Simple Network For Failing To Register As A Telecommunications Provider

The Federal Communications Commission plans to fine Simple Networks, Inc., a New Jersey prepaid calling card provider, $100,000 for allegedly providing interstate telecommunications services without registering with the FCC through the Universal Service Administrative Company (USAC). Simple Network's alleged failure to register allowed the company to avoid payments that support federal programs, including the Universal Service Fund, and potentially created higher fees for companies which followed the law by registering with USAC.

New Verizon Deals: Could Peering Disputes Be On the Way Out?

Three months after the Federal Communications Commission threatened closer oversight of Internet interconnection agreements as part of its Open Internet order, Verizon has reached traffic exchange agreements with two companies that previously were the focus of high-profile interconnection disputes. On April 23, Verizon noted that it had reached an Internet interconnection agreement with Level 3 and on May 1st the company announced a similar agreement with Cogent Communications. Both Level 3 and Cogent provide Internet connectivity to content providers -- and because companies in that business tend to deliver more content to broadband providers such as Verizon than they receive from those providers, Verizon had argued that companies should pay for any traffic imbalance. Neither announcement details the terms of the settlements. But Cogent’s CEO Dave Schaefer reportedly said that his company won’t have to pay Verizon for exchanging traffic. Neither Level 3 nor Verizon would answer the same question.

Companies like Verizon that have resisted free peering agreements with companies like Level 3 and Cogent may be in a weaker bargaining position now that the Federal Communications Commission has reclassified broadband as a Title II telecommunications service, and has said it will hear complaints about Internet interconnection and take enforcement action if necessary. Retail broadband providers aren’t giving up without a fight however. Several broadband providers and provider associations have sued the FCC over the Title II decision and on Friday, five broadband provider associations petitioned for a stay on broadband reclassification. In their arguments, USTelecom, AT&T, CenturyLink and others expressed concern about increased FCC control over Internet peering agreements as a result of broadband reclassification.

Comcast's total bill for its attempted TWC buy: $336 Million

After 14 months of lobbying federal, state and municipal government officials, running ads and shuffling stacks of paperwork to the Federal Communications Commission, Comcast revealed to investors that its entire tab for its failed acquisition of Time Warner Cable comes to around $336 million. The tally required a little bit of math: Comcast reported that its first-quarter merger expenses came to $99 million. Add that to the $234 million reported for 2014, and you get the final bill. Comcast made its latest disclosure during its Q1 earnings call.

Benton

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