June 2015

Tom Wheeler -- The Halftime Report

[Commentary] Tom Wheeler’s tenure as Federal Communications Commission Chairman is at the halfway point. This is a good time to assess what he has accomplished and what is to come. Chairman Wheeler is acutely aware of the ticking clock, as reflected by this recent speech given by one of his top aides. He started out quickly; within a few weeks after his arrival, he had jawboned the wireless industry into changing its policy refusing to unlock customers’ cellphones. This not only showed a desire to get things done, but was also a response to critics who had opposed his confirmation because of his history as a cable and wireless industry lobbyist. He also began a review of the agency’s operating procedures, which demonstrated that he intended to manage the agency aggressively. More importantly, Chairman Wheeler began to work on his major legacy issues: reform and expansion of universal service, promoting broadband deployment, and making more spectrum available for wireless broadband.

Lessons in Government Action in a Changing Landscape

[Commentary] We saw evidence of two rare government actions: a long debated issue that reaches a critical juncture that is resolved, and an action emanating from a small group charged with evaluating strengths, weaknesses, opportunities and threats related to a mission, and successfully building the path and political capitol for achieving the mission. We saw these rare actions with the Federal Communications Commission's reclassification decision coming more than a decade after the issue first gained prominence, and several events commemorating the fifth anniversary of the National Broadband Plan.

Not surprisingly, most of the media attention was on the reclassification decision. The real world impact of the two efforts, however, provides an interesting view on how policy battles can make change manifest in the world. This is not to suggest that Net Neutrality and the National Broadband Plan were in conflict. Both reflect the government and public's belief that the Internet is fundamentally important to he economy and society, and both wrestle with how to protect long-standing principles of equity, diversity, and innovation, when the economic and technological substructure shifts.

[Blair Levin is a Senior Non-Resident Fellow at the Metropolitan Policy Program of the Brookings Institution]

Levin: Broadband Opportunities Council Mission Consistent with National Broadband Plan

[Commentary] The mission of the Broadband Opportunities Council (BOC) is critical for the economic and social progress of this country. I believe it is consistent with the fundamental vision of the National Broadband Plan, which I would summarize as ubiquitous, affordable, abundant bandwidth, with all Americans online, and using that platform to better deliver public goods and services. The Plan set forth four strategies to pursue that vision:

Drive Fiber deeper into the network
Use Spectrum more efficiently
Create the right incentives for adoption by all
Encourage the development of applications to improve the country's ability to make progress in certain national purposes, including health care, education, public safety, and energy, among others.

The BOC Request for Comment focuses on deployment and adoption, but it is important that the relationship between those goals and all four strategies is understood. Simply put, improvements in each can drive improvements in the others; bottlenecks in any can stifle progress in all. That is, for robust, encouraging adoption by increasing the value of being on-line, making applications that create public goods more valuable, and with those increasingly valuable applications driving greater value and adoption, the economics to improve the fixed and mobile network increase.

Vast data warehouse raises HealthCare.gov privacy concerns

A government data warehouse that stores personal information on millions of HealthCare.gov customers is raising privacy concerns at a time when major breaches have become distressingly common. A government privacy assessment dated Jan 15 says data “is maintained indefinitely at this time,” but the Obama Administration said June 15 that no final time frame has been decided, and the National Archives has recommended a 10-year retention period.

Known as MIDAS, the system is described on a federal website as the “perpetual central repository” for information collected under the health care law. The information stored includes names, Social Security numbers, birthdates, addresses, phone numbers, passport numbers, employment status and financial accounts. The vast scope of the information -- and the lack of a final plan for destroying old records nearly four years after the system was commissioned -- have raised concerns about privacy and the government’s judgment on technology.

President Obama admits HealthCare.gov was a ‘well-documented disaster’

President Barack Obama is again acknowledging critics of his signature health-care initiative as the government continues to grapple with new, technologically complex demands. President Obama concedes that HealthCare.gov was a "well-documented disaster" and a kind of wake-up call for the way government relates to technology, saying "With all the crises we were dealing with -- the economy collapsing, the auto industry on the verge of collapse, winding down wars—this did not get the kind of laser-focused attention until Healthcare.gov, which was a well-documented disaster, but ended up anyways being the catalyst for us saying, 'Okay, we have to completely revamp how we do things.'"

President Obama goes on to blame ancient procurement rules that didn't allow officials any flexibility in designing a massive Web site that Washington had never tried before. Since then, he said, he's taken steps to make sure government and technology work better together in the future.

Senators jump on PayPal user agreement

Four senators are pressing PayPal over a new user agreement that requires customers to automatically opt-in to robocalls when signing up for an account. The Federal Communications Commission’s enforcement bureau sent a warning to the payment processing company that its terms of service slated to take effect in July might violate the law.

“We share the FCC’s perspective and believe consumers should not have to agree to submit themselves to intrusive robocalls in order to use a company’s service,” the Senators wrote in a letter to the company that expressed "concern." The letter was signed by Sens Ed Markey (D-MA), Al Franken (D-MN), Robert Menendez (D-NJ) and Ron Wyden (D-OR). “This new policy could adversely affect consumers by exposing them to a barrage of unwanted calls that are unstoppable unless consumers choose to discontinue using PayPal,” according to the senators.

FBI baffled over wave of nighttime fiber-optic cable vandalism

The Federal Bureau of investigation is stumped, and it's seeking the public's assistance in nabbing those responsible for severing fiber-optic cable throughout the San Francisco Bay Area. In one of the latest incidents, happening in the Oakland suburb of Walnut Creek (CA), cable responsible for landline and wireless AT&T customers was severed on June 9. AT&T is offering a $1,000 reward for info leading to the conviction of those responsible.

At least 10 incidents, beginning July 2014 in Berkeley, have knocked out various California telecommunications services. "Anyone who may have been in these areas during these times and saw anything either suspicious or related to normal telecommunications maintenance is urged to contact the FBI," said Greg Wuthrich, an FBI special agent. "The individuals may appear to be normal telecommunications maintenance workers or possess tools consistent with that job role."

Study: Media Cross-Sector Plays on Rise

The vast majority of telecommunication, media and entertainment (TME) executives in the US, Europe and Asia (84 percent) expect to see more cross-sector mergers and acquisitions in the next two years as companies converge beyond their core businesses, a survey of 100 senior technology executives has found. The forecasted activities include cable operators creating quadruple plays of TV, broadband, fixed and mobile telephony, and technology companies like Apple and Amazon offering products and services far beyond their original businesses, according to the survey, conducted by Mergermarket on behalf of law firm Reed Smith.

Among the key findings: Entertainment companies are the most willing to reach beyond the core, with 33 percent planning to make a non-entertainment purchase, and cross-sector also increasingly means cross-border, with 67 percent saying their next purchase was likely to be outside their home country. And all that merging comes with a price: 23 percent of the respondents said they expect increased convergence "to drive creative disruption for business models in the technology and media/entertainment sectors."

Facebook The Vote

Iowa, New Hampshire, and South Carolina have marked the route to the White House for more than a generation. But in 2016, the path to the presidency will run through new territory -- your Facebook news feed. As the race begins in earnest, the world's largest social network is emerging as the single most important tool of the digital campaign, with contenders as different and disparate as Hillary Clinton, Ben Carson, and Sens Rand Paul (R-KY) and Bernie Sanders (I-VT), all investing in the platform already.

Thanks to powerful new features unveiled since the 2012 campaign, Facebook now offers a far more customized and sophisticated splicing of the American electorate. And, for the first time in presidential politics, it can serve up video to those thinly targeted sets of people. That unprecedented combination is inching campaigns closer to the Holy Grail of political advertising: the emotional impact of television delivered at an almost atomized, individual level. It makes the old talk of micro-targeting soccer moms and NASCAR dads sound quaint. "I can literally bring my voter file into Facebook and start to buy advertising off of that," says Zac Moffatt, who was Mitt Romney's digital director and whose firm now works for Rick Perry's campaign and Scott Walker's super PAC.

Online sales tax debate reignited in the House

Republican lawmakers reignited the online sales tax debate, rolling out a new bill that they said could assuage previous Republican concerns about the issue. The bill, from House Oversight Chairman Jason Chaffetz (R-UT) and a group of 15 other House members, would give states greater latitude to charge sales taxes on online purchases from out-of-state customers. But supporters say it also improves upon previous online sales tax legislation, called the Marketplace Fairness Act, that made it through the Senate last Congress before getting stonewalled by House GOP leaders.

“We think this is a viable solution. What we’re trying to do is empower states to make these types of decisions,” Chairman Chaffetz said, alongside Rep Steve Womack (R-AR), an original co-sponsor of the measure. Reps Chaffetz and Womack both stressed that their bill would finally bring parity to the issue of taxing online sales. The Supreme Court has said that states can only collect sales taxes from companies that have a physical location within their borders.

Benton

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