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June 2015

GOP FCC Commissioners Slam AT&T Fine

Commissioners Ajit Pai and Michael O'Rielly of the Federal Communications Commission strongly dissented from the FCC's decision to fine AT&T $100 million for what it said was failing to sufficiently warn customers it would slow broadband speeds, and how much it would slow them, for the highest-volume users grandfathered into its since-ended unlimited data plans. AT&T said it did inform them and is fighting the fine, which is tied to the network management transparency rule, the only one of the FCC's 2010 Open Internet order rules not thrown out by a federal court.

Commissioner Ajit Pai's dissent was scathing. He called it "a government 'rule' suddenly revised, yet retroactive. Inconvenient facts ignored. A business practice sanctioned after years of implied approval. A penalty conjured from the executioner’s imagination." FCC Chairman Tom Wheeler has long argued that slowing speeds for "unlimited" plan customers was not delivering on both the promise of broadband and the promise of broadband suppliers in labeling it unlimited. But AT&T said it has made clear its policy of slowing speeds for what some have labeled bandwidth hogs as a way to insure service is not degraded for others. Chairman Wheeler has also made it clear that fast broadband for all is a government imperative. Commissioner O'Rielly was less stringent in his objection, calling the violation "tenuous at best." But he had plenty of issues with the decision. He also had trouble with the way the FCC handled the issue. "If the Enforcement Bureau thought there were deficiencies in some of AT&T’s disclosures, it should have taken steps to rectify any concerns prior to imposing a Draconian $100 million penalty and compliance measures," he said.

Crafting Balanced Incentive Auction Rules in the Public Interest

[Commentary] June 21 marks the first day of summer, and what will be the critical season for finalizing key details for 2016’s Incentive Auction. Now we turn to the crucial task of finalizing our auction rules.

On June 16, Federal Communications Commission staff briefed the Commissioners’ staffs on proposed recommendations to establish final rules for the auction that balance our statutory obligations, heeds commenters’ calls for simplicity and transparency in the flow of the auction, and -- most importantly -- serves the public’s interest in an effective, efficient, and timely auction. The proposal aims to clear the highest possible amount of spectrum for broadband consistent with broadcasters’ voluntary decisions to relinquish some or all of their spectrum usage rights. At the same time the proposal limits the number of impaired new licenses that are created in those isolated instances where it is necessary to relocate a TV broadcaster on the same or adjacent frequencies as those being auctioned. The proposal eliminates bidding procedures that many commenters believed were burdensome and could limit broadcaster participation. It also adopts a formula for opening bid prices that creates value for both broadcasters and American taxpayers. The proposal responds to requests to make more information about bidding available to bidders before and during the auction. And it ensures that competitive wireless carriers and new entrants have a clear shot at adding sufficient low-band spectrum to their portfolios so that they can compete more effectively in both rural and urban areas. The proposal reflects an incredible amount of modeling and the careful consideration and analysis of all parties’ comments and concerns in a robust public record. The proposed package of rules is designed to best serve the broad public interest -- and that’s the true test of good public policy.

APTS Posts Revised TV Station Sharing Agreement

The Association of Public Television Stations has posted an updated copy of a "model" TV station sharing agreement on its website. TV stations participating in the broadcast incentive auction have the option of giving up their spectrum but striking a sharing agreement with another station while retaining their license and must-carry rights.

“This channel sharing agreement is intended to help public television stations make decisions that are best for their stations and their local communities regarding the Federal Communications Commission’s (FCC) spectrum auction and repacking process,” said APTS executive VP, chief operating officer, Lonna Thompson. “A successful auction and repacking of our broadcasters is in the best interests of all involved industries,” she said. APTS has argued that an FCC decision that would be good for stations and communities would be if it reserved a noncommercial channel in each market after the repack. Currently, the FCC is planning to reject APTS's request for that channel reservation, a request seconded by PBS and CPB.

Lifeline: Tools for Building an Inclusive Society

[Commentary] Since 1985, the Lifeline Program has helped American families struggling economically to pay for basic telephone service that connects them to schools, doctors, emergency services, and jobs. This resulted in 97 percent of Americans being able to access a telephone line. Policymakers now have the opportunity to add essential broadband Internet service to this critical program.

On June 18, the Federal Communications Commission will vote to begin a proceeding on whether to include broadband service in the Lifeline program, as well as the best way to do this. The technical question policymakers will face is: Do we want to support broadband Internet service in the Lifeline program? But the deeper question before them is: Do we want to help build an inclusive society where all can participate and seek opportunity regardless of how much they can afford? As the political conversation about improving Lifeline to reflect the essential services Americans need in the 21st century unfolds, public interest advocates will be key in helping the FCC and elected representatives answer both the technical and societal questions. The FCC needs to find solutions and act when Americans cannot access these tools. A commitment to support Lifeline telephone and broadband service is a commitment to the sustainability and success of our nation, and this has no party affiliation. It’s time to improve Lifeline to build a unified society that allows for greater potential and success for all Americans.

ACA: AT&T/DirecTV Needs RSN-Related Conditions

The American Cable Association has told the Federal Communications Commission that it should heed past AT&T/DirecTV concerns about access to regional sports networks (RSNs) and apply conditions to insure their proposed merger does not result in higher prices for rivals' access to their four RSNs. ACA says program access rules are not sufficient protection against the incentive and opportunity for the combined company to charge competitors, like smaller cable operators with less discretionary income, higher prices for those RNSs.

In a filing in the merger docket, ACA said that "AT&T and DirecTV themselves have a long history of raising the same concerns as ACA about vertically integrated programmers, particularly with respect to access to RSN programming, the very programming assets at issue in this proceeding." ACA says the two companies have also argued that program access rules are flawed, and DirecTV has even sought conditions on others similar to ones ACA is asking for, which are a nondiscriminatory access condition and baseball style arbitration." "Applicants have long worried about the vertical integration of MVPD distribution and RSN programming assets, and have attested to flaws in the operation of the program access rules," ACA said. "The Commission should take heed of their prior advocacy, and adopt remedial conditions on the Applicant’s licenses that will actually work to ensure fair and non-discriminatory access to Applicants’ RSN programming, particularly for smaller MVPDs."

Benton Foundation Welcomes FCC Proceeding to Update Lifeline Program

Submitted by benton on Thu, 06/18/2015 - 10:05

On Thursday, June 18, 2015, the Federal Communications Commission (FCC) launched a new proceeding to reform and modernize its Lifeline program with a refocus on broadband. The following statement can be attributed to Amina Fazlullah, the Director of Policy of the Benton Foundation:

The Benton Foundation applauds the FCC's move today to modernize its Lifeline program. This is an important step to provide low-income Americans with meaningful access to robust broadband.

June 18, 2015 (An Early Network Neutrality Win)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for THURSDAY, JUNE 18, 2015

Today -- FCC Open Meeting see https://www.benton.org/node/217849


INTERNET/BROADBAND
   House Commerce Committee Approves Bipartisan Bill to Protect the Future of the Internet -- DOTCOM Act Poised for House Vote -- press release
   Stakeholder Proposals to Come Together at ICANN Meeting in Argentina - NTIA press release [links to web]
   35 Mayors and Elected Officials Call for Accessible Broadband Performance Information Following GAO Investigation - Next Century Cities press release [links to web]

NET NEUTRALITY
   An Early Network Neutrality Win: Rules Prompt Sprint to Stop Throttling
   House panel advances rider to block Net Neutrality rules
   Obama Administration knocks net neutrality riders in funding bill
   Title II's Full-‘Throttle’ History - analysis [links to web]
   Network neutrality and the return of state regulators - AEI op-ed [links to web]

WIRELESS/SPECTRUM
   FCC Plans To Fine AT&T $100 Million For Misleading Consumers About Unlimited Data Plans, Violating Transparency Obligations - press release
   CTIA: US mobile data traffic increased 26 percent in 2014, but growth rate falls sharply from 2014
   Is T-Mobile’s John Legere a dingo? - AEI op-ed [links to web]
   Comcast Patent Gets the Drop on Mobile [links to web]

PRIVACY/SECURITY
   Senators push warrants for spying in the skies [links to web]
   Even former NSA chief thinks USA Freedom Act was a pointless change [links to web]
   Dot-govs Score Points for Protecting Privacy but Poor E-mail Authentication Remains An Issue [links to web]
   In cyberattacks, blame the victim - USA Today op-ed [links to web]

TELEVISION/RADIO
   Appropriations Bill Would Grandfather TV Joint Sales Agreements
   Emergency Alert System Rules Revised - CommLawBlog analysis [links to web]
   Pay TV Subscriber Survey: Providers At Risk of Losing One Third of Subscriber Base
   Ideal A La Carte Package: 17 Channels [links to web]
   Rush Limbaugh Demoted To Another Irrelevant, Ratings-Challenged Station In A Major Market - Media Matters for America analysis [links to web]

CHILDREN & MEDIA
   Sen Nelson Quizzes Google On YouTube Kids [links to web]

ELECTIONS & MEDIA
   How Hillary Clinton Got Her Social Media Groove On [links to web]
   Tech Policy 2016: What Presidential Candidates Should Be Talking About [links to web]
   Tell presidential candidates, 'It’s the enterprise, stupid!' - Christian Science Monitor op-ed [links to web]
   Donald Trump comes out on top -- on Facebook [links to web]

DIVERSITY
   FCC Commissioner Clyburn at the Progressive Policy Institute - speech [links to web]

STORIES FROM ABROAD
   Deadline reached for switchover from analogue to digital TV for 119 countries in Europe, Africa, Middle East and Central Asia - ITU press release [links to web]

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INTERNET/BROADBAND

HOUSE COMMERCE COMMITTEE APPROVES DOTCOM ACT
[SOURCE: House of Representatives Commerce Committee, AUTHOR: Press release]
The House Commerce Committee approved the Domain Openness Through Continued Oversight Matters (DOTCOM) Act (HR 805), bipartisan legislation to protect the future of the Internet. Authored by Rep John Shimkus (R-IL), the DOTCOM Act ensures that Congress continues its oversight role over the administration’s work to transition its Domain Name System authority from the United States to the global Internet community. “The DOTCOM Act serves as an essential check within our government. The Internet has come a long way from its days as a government research network and the concrete steps toward privatization have made it stronger. As we look toward taking another step in that process – removing the US government from its oversight of the Internet Assigned Numbers Authority – we must look before we leap,” added Chairman Fred Upton (R-MI). Ranking Member Frank Pallone, Jr. (D-NJ) added, “The DOTCOM Act continues the long-standing congressional support for the global, open Internet while appropriately conducting oversight of the National Telecommunications and Information Administration. I believe our bill provides the necessary safeguards for the timely transition of the Internet Assigned Numbers Authority or IANA.” “The DOTCOM Act is our best way forward to ensure Congress can exercise a meaningful and appropriate oversight role in the IANA stewardship transition,” said Rep Shimkus. “This is an important moment for the Internet but there’s no moving back into mom and dad’s basement if it doesn’t work out. We only have one chance to get this right.”
benton.org/headlines/house-commerce-committee-approves-bipartisan-bill-protect-future-internet-dotcom-act | House of Representatives Commerce Committee | The Hill
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NET NEUTRALITY

SPRINT STOPS THROTTLING
[SOURCE: Wall Street Journal, AUTHOR: Thomas Gryta]
The Federal Communications Commission’s new network neutrality rules are already having an effect. Sprint, the third-largest US wireless carrier, had been intermittently choking off data speeds for its heaviest wireless Internet users when its network was clogged. But it stopped on June 12, when the government’s new net neutrality rules went into effect. The rules, unlike prior attempts by the commission to ensure Internet traffic isn’t blocked or slowed, cover wireless networks like Sprint’s for the first time. That raises the stakes for carriers, whose past policies could in theory run afoul of newly vigilant regulators. Sprint said it believes its policy would have been allowed under the rules, but dropped it just in case. The company also had reserved the right to prioritize data traffic depending on a subscriber’s plan. It had never done so, but has now decided the policy isn’t needed.
benton.org/headlines/early-network-neutrality-win-rules-prompt-sprint-stop-throttling | Wall Street Journal
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HOUSE PANEL ADVANCES RIDER TO BLOCK NET NEUTRALITY RULES
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
The House Appropriations Committee approved a funding bill that includes a policy rider to block newly implemented network neutrality rules temporarily. The 30-20 party-line vote on the financial services and general government appropriations bill is the most direct action by Republican Representatives to stall the new rules since they were approved by the Federal Communications Commission in February. During the markup, Democratic Representatives said policy riders like the net neutrality provision included in the funding bill could lead to a shutdown of numerous agencies in October. "We have received more phone calls on this issue than any other issue in a long, long time," Rep José Serrano (D-NY) said of the Internet regulation. "And I don't understand why some people can't understand that net neutrality is here, it is here to stay and it is what the American people want." Republican Reps have floated a number of other proposals seeking a legislative compromise on net neutrality or to kill the rules outright. But none has made progress in either chamber. An amendment from Democratic Reps to strip the net neutrality provisions out was voted down 31-19, mostly along party lines. Rep Henry Cuellar (D-TX) was the only Democratic Representative who voted to leave it in place.
benton.org/headlines/house-panel-advances-rider-block-net-neutrality-rules | Hill, The
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OBAMA ADMINISTRATION KNOCKS NET NEUTRALITY RIDERS IN FUNDING BILL
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
The Obama Administration poked holes in a House appropriations bill that includes language to temporarily prevent the Federal Communications Commission from implementing new network neutrality rules. Ahead of a scheduled markup, the Office of Management and Budget expressed “serious concerns” that the House’s Financial Services and General Government Appropriations bill contains “highly problematic ideological riders.” “The inclusion of these provisions threatens to undermine an orderly appropriations process,” OMB Director Shaun Donovan wrote in a letter to House Appropriations Committee Chairman Hal Rogers (R-KY). The Federal Communications Commission’s funding and the net neutrality riders were only a sliver of the concerns outlined in the six-page letter, which also dealt with IRS funding, restrictions on some Cuba travel and provisions related to DC’s budget. The Administration stopped short of threatening a veto this early in the process but called for a number of improvements. OMB Director Donovan described cuts to the FCC’s funding as unnecessary since it is funded by regulatory fees and auction funds. In addition to a blanket delay of the net neutrality order, the appropriations bill would prohibit “certain direct or indirect regulations that could independently prevent the order from being implemented,” according to the letter.
benton.org/headlines/obama-administration-knocks-net-neutrality-riders-funding-bill | Hill, The
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WIRELESS/SPECTRUM

FCC PLANS TO FINE AT&T $100 MILLION FOR MISLEADING CONSUMERS ABOUT UNLIMITED DATA PLANS
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission plans to fine AT&T Mobility $100 million for misleading its customers about unlimited mobile data plans. The FCC's investigation alleges that AT&T severely slowed down the data speeds for customers with unlimited data plans and that the company failed to adequately notify its customers that they could receive speeds slower than the normal network speeds AT&T advertised. AT&T began offering unlimited data plans in 2007, allowing customers to use unrestricted amounts of data. Although the company no longer offers unlimited plans to new customers, it allows current unlimited customers to renew their plans and has sold millions of existing unlimited customers new term contracts for data plans that continue to be labeled as "unlimited". In 2011, AT&T implemented a "maximum Bit Rate" policy and capped the maximum data speeds for unlimited customers after they used a set amount of data within a billing cycle. The capped speeds were much slower than the normal networks speeds AT&T advertised and significantly impaired the ability of AT&T customers to access the Internet or use data applications for the remainder of the billing cycle. The FCC charges AT&T with violating the 2010 Open Internet Transparency Rule by falsely labeling these plans as "unlimited" and by failing to sufficiently inform customers of the maximum speed they would received under the Maximum Bit Rate policy.
benton.org/headlines/fcc-plans-fine-att-100-million-misleading-consumers-about-unlimited-data-plans-violating | Federal Communications Commission | LA Times | Washington Post | Revere Digital | USA Today | The Hill
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CTIA: US MOBILE DATA TRAFFIC INCREASED 26%, BUT GROWTH RATE FALLS SHARPLY FROM 2014
[SOURCE: Fierce, AUTHOR: Phil Goldstein]
Americans continue to guzzle more wireless data, but data traffic is not increasing at the rapid rate it once was, according to a new report from CTIA. The report also found that wireless service revenue fell in the US in 2014; service revenue had increased every year since 2000 before 2014, the trade group's report said. In its annual report on the state of the industry, the lobbying group for US carriers said that US wireless providers handled more than 4.06 trillion megabytes of mobile data traffic, up around 26 percent from 3.23 trillion megabytes of data traffic in 2013. However, while data traffic is still growing, the growth is slowing, as CTIA has reported 2014 that data traffic increased 120 percent in 2013. In 2012, CTIA reported that participating wireless carriers reported handling 1.47 trillion MB of data, which was up 69.3 percent from 2011. CTIA said that total reported service revenues fell 0.7 percent year-over-year in 2014 to $187.8 billion, down from $189.2 billion in 2013. Service revenues likely fell in 2014 for several reasons.
   CTIA: US mobile data traffic increased 26 percent in 2014, but growth rate falls sharply from 2014

benton.org/headlines/ctia-us-mobile-data-traffic-increased-26-percent-2014-growth-rate-falls-sharply-2014 | Fierce | CTIA: The Wireless Association | CTIA: The Wireless Association
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TELEVISION/RADIO

APPROPRIATIONS BILL WOULD GRANDFATHER TV JOINT SALES AGREEMENTS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Broadcasters may not have to unwind those joint sales agreements after all. The House Appropriations Committee June 17 passed a Federal Communications Commission appropriations bill that included an amendment grandfathering TV station sharing agreements in place before March 31, 2014, the date that a divided FCC voted to make TV station joint sales agreements (JSAs) over 15 percent attributable as ownership interest. That required either unwinding the agreements (by 2016) or selling stations (also by 2016) in markets where the agreement meant de facto ownership of two stations in markets where duopolies are not allowed. The National Association of Broadcasters, which had opposed the FCC move, pointed out that the amendment passed by a vote of 38 to 11, including eight Democrats. "NAB thanks the House Appropriations Committee for passing this bipartisan amendment that allows local broadcasters to continue operating joint sales agreements already approved by both Republican and Democratically controlled FCCs," said National Association of Broadcasters spokesman Dennis Wharton. "These sharing agreements have allowed television stations, especially in small and midsized markets across America, to bolster their local news and other public service programming to the benefit of their communities. We look forward to working with lawmakers to advance the legislation through Congress." “We are disappointed that the House Appropriations Committee sided with media conglomerates’ attempt to gut the FCC policy against the covert consolidation of local TV broadcasters," said Free Press policy counsel Lauren Wilson.
benton.org/headlines/appropriations-bill-would-grandfather-tv-joint-sales-agreements | Broadcasting&Cable
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PAY TV PROVIDERS AT RISK OF LOSING ONE THIRD OF SUBSCRIBER BASE
[SOURCE: telecompetitor, AUTHOR: Andrew Burger]
Despite their best efforts to date pay-TV providers are increasingly feeling the heat from over-the-top (OTT) competitors rolling out leaner, more personalized and less expensive on-demand video content to viewers. Nearly 8 percent (7.7) of respondents to a survey conducted by TiVo-owned Digitalsmiths for its 1Q 2015 Video Trends Report said they switched pay-TV providers in the last three months. That’s up 2 percent year-over-year (YoY). Moreover, 15.3 percent of respondents said they intend to either switch (3.1 percent), change (7.4 percent), or cut their current pay-TV service over the next six months. Nearly one-third (32.4 percent) aren’t sure about whether or not they will stay with their current provider, prompting Digitalsmiths to suggest they might need to be enticed to stay. All told, incumbent pay-TV providers may need to take immediate action to prevent nearly half (47.7 percent) of survey respondents from jumping ship, reducing viewing or cutting off their pay-TV service subscriptions. The percentages of pay-TV subscribers surveyed who plan to switch or change providers or cancel their subscriptions are up 1.7 percent and 3.5 percent since 1Q 2013, the TiVo-owned market research provider notes. More than 4 in 10 (44 percent) of the 32.4 percent of survey respondents “on the fence” said they would stay with their pay-TV provider if it were to provide new functionality that improved the content search and discovery process. That’s up 6.6 percent from a year ago.
benton.org/headlines/pay-tv-subscriber-survey-providers-risk-losing-one-third-subscriber-base | telecompetitor
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An Early Network Neutrality Win: Rules Prompt Sprint to Stop Throttling

The Federal Communications Commission’s new network neutrality rules are already having an effect. Sprint, the third-largest US wireless carrier, had been intermittently choking off data speeds for its heaviest wireless Internet users when its network was clogged. But it stopped on June 12, when the government’s new net neutrality rules went into effect.

The rules, unlike prior attempts by the commission to ensure Internet traffic isn’t blocked or slowed, cover wireless networks like Sprint’s for the first time. That raises the stakes for carriers, whose past policies could in theory run afoul of newly vigilant regulators. Sprint said it believes its policy would have been allowed under the rules, but dropped it just in case. The company also had reserved the right to prioritize data traffic depending on a subscriber’s plan. It had never done so, but has now decided the policy isn’t needed.

Network neutrality and the return of state regulators

[Commentary] In the heady days of the Bell monopoly, state regulators reigned alongside the Federal Communications Commission as co-sovereigns, setting the rates and terms of service for intrastate communications, which many considered more essential than long-distance. But as the Internet replaced the telephone system as America’s primary telecommunications network, state authority receded. The FCC classified broadband as an information service and largely preempted state regulation. State regulators may not have disappeared completely, but it appeared that, like local newspapers, they were destined for a much more circumscribed role in the Internet age. But a funny thing happened on the way to the Open Internet order. The FCC’s effort to turn back the regulatory clock by 20 years may have breathed new life into state public utility commissions.

If the Internet is not a revolutionary new network, but simply the next iteration of a Title II telecommunications system, then states may be justified in claiming the co-regency that Congress intended for them to wield over the intrastate aspects of Title II networks. There remain two fairly significant sources of potential authority for states within the statute. First, Section 332 allows states to regulate “other terms and conditions” of commercial mobile radio service (CMRS). Second, the court’s blessing of Section 706 in Verizon v FCC as a source of regulatory authority applies to states as well as federal regulators.

On balance, greater state regulatory oversight of broadband service is likely to do more harm than good.

[Lyons is an associate professor at Boston College Law School]

Appropriations Bill Would Grandfather TV Joint Sales Agreements

Broadcasters may not have to unwind those joint sales agreements after all. The House Appropriations Committee June 17 passed a Federal Communications Commission appropriations bill that included an amendment grandfathering TV station sharing agreements in place before March 31, 2014, the date that a divided FCC voted to make TV station joint sales agreements (JSAs) over 15 percent attributable as ownership interest. That required either unwinding the agreements (by 2016) or selling stations (also by 2016) in markets where the agreement meant de facto ownership of two stations in markets where duopolies are not allowed.

The National Association of Broadcasters, which had opposed the FCC move, pointed out that the amendment passed by a vote of 38 to 11, including eight Democrats. "NAB thanks the House Appropriations Committee for passing this bipartisan amendment that allows local broadcasters to continue operating joint sales agreements already approved by both Republican and Democratically controlled FCCs," said National Association of Broadcasters spokesman Dennis Wharton. "These sharing agreements have allowed television stations, especially in small and midsized markets across America, to bolster their local news and other public service programming to the benefit of their communities. We look forward to working with lawmakers to advance the legislation through Congress." “We are disappointed that the House Appropriations Committee sided with media conglomerates’ attempt to gut the FCC policy against the covert consolidation of local TV broadcasters," said Free Press policy counsel Lauren Wilson.

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