June 2015

Subcommittee on Communications and Technology
House Commerce Committee
Thursday, June 11, 2015
10 AM
http://energycommerce.house.gov/hearing/oversight-fcc-field-offices



How Washington keeps states from regulating Internet providers

The US House is expected to vote June 9th on a bill that would prevent state and city governments from levying taxes on Internet access. The bill is important for a number of reasons, not least because it could help determine what you ultimately pay for service. But it also highlights an important tension between Washington and the states -- one that affects how we regulate what has become the most important connection technology of our time.

The Permanent Internet Tax Freedom Act, which has the backing of House Judiciary Committee Chairman Bob Goodlatte (R-VA) and nearly 190 co-sponsors, could take some of that power away, at least on paper. The bill itself is fairly simple: It reaffirms a preexisting ban on Internet taxes. Here's why that's significant: Until now, the ban had to be renewed by Congress every so often. But if the ban becomes permanent, Congress would be heading off any attempt by states to tax Internet providers and reassert themselves over those companies. The legislation would officially make regulating Internet providers more of a federal affair, with all of the consequences that implies.

The US Army’s main Web site is down -- and the Syrian Electronic Army is claiming credit

The Syrian Electronic Army hacked the official Web site for the US Army, a Twitter account apparently associated with the hacktivist group claimed. The site was down in the afternoon of June 8, while screenshots posted on the social network by SEA purported to show messages of support for beleaguered Syrian President Bashar al-Assad on the site earlier in the day.

The Army confirmed the site outage. "Today an element of the Army.mil service provider's content was compromised," said Brig. Gen. Malcolm B. Frost, an Army spokesman. "After this came to our attention, the Army took appropriate preventive measures to ensure there was no breach of Army data by taking down the Web site temporarily." The statement did not address the SEA army claims of responsibility. However, the official Facebook page for Fort Bragg in North Carolina warned people to "avoid" using the Army's Web site because it was down "reportedly from being hacked by the Syrian Electronic Army."

Apple Is Officially Spotify's Newest, Biggest Competitor

After months of speculation, Apple officially entered the music subscription market with the debut of Apple Music. Built in part on the guts of the Beats Music streaming service Apple acquired in 2014, the new service will offer a Spotify-style on-demand music library alongside human-curated Internet radio and playlists. Apple's new music streaming service will be available on June 30 in iOS 8.4 with the subscription component costing the standard industry rate of $10 per month (or $15 for a family plan). Its new radio feature will be anchored by a global radio station called Beats One, which will be DJed by well-known personalities like Zane Lowe, a veteran of the BBC that Apple poached earlier in 2015.

Feds plot course to resume NSA spying

The National Security Agency is taking steps to turn its massive collection of Americans’ phone records back on. After President Barack Obama signed legislation to end the controversial program, the Justice Department submitted a legal memorandum to the secretive federal court justifying authorization for the NSA collection for another six months, as the new law allows. “[T]he government respectfully submits that it may seek and this court may issue an order for the bulk production of tangible things” under the law, “as it did in ... prior related dockets,” the Justice Department said. The legal analysis was submitted on June 2, less than an hour after the White House announced that President Obama had signed the USA Freedom Act into law. The memo was not revealed to the public until June 8. The memo outlines the legal rationale for restarting the NSA program.

Sens Have Issues With FCC Office Closures

In a letter to Federal Communications Commission Chairman Tom Wheeler, Sens Kelly Ayotte (R-NH), Jeanne Shaheen (D-NH), and Susan Collins (R-ME) have told the FCC they are worried that his plan to close two-thirds of its field offices and cut almost half of the field agent staff could "jeopardize the agency's ability to prevent spectrum interference." They are particularly concerned about the FCC closing the Boston (MA) office, which serves New England. Chairman Wheeler proposed the closures and centralizing of their functions in the FCC's 2016 budget as a way to save money that he said would increase efficiency and not compromise the FCC's important interference monitoring.

Are Americans Ready to Pay for ‘Quad Play’?

A combination of T-Mobile and Dish Network would merge two companies rooted in different industries. For consumers, it would merge some of the fastest-growing bills in their budgets. American households spent more than $191 a month on average for television, Internet and phone services in 2013, according to Labor Department data. That was up 24 percent from 2007 and about what they spent on health insurance. The question is whether Americans are going to take to paying all that to one company. The prospect isn’t so far-out anymore.

With satellite broadcaster Dish Network pursuing a merger with wireless carrier T-Mobile US, AT&T about to close a $49 billion acquisition of Dish rival DirecTV and cable companies experimenting with cellphone plans, many of the services that keep people entertained and in touch are moving under the same roof. Such providers are betting on so-called convergence -- the idea that they will be better off if they can bulk up, as services that used to flow via different wires and satellite dishes all start traveling on the Internet. The biggest benefit for operators is that customers who sign up for multiple services are less likely to switch providers. However, people tend to have a negative reaction to bigger bills, even if it is the same amount previously spread out over multiple providers, said telecommunications consultant Chetan Sharma. “It is a phenomenon that is top down,” he said. “Industry pushes it rather than consumers seeking it.”

Comcast could be in for a period of smaller deals

Comcast's stunning decision in late April to abandon its $45 billion deal for Time Warner Cable will likely lead to a lull for the acquisitive cable company, experts say. Wall Street analysts said that federal regulators seem hostile to any new big transaction that Comcast brings to Washington and that they expect the merger-hungry Philadelphia (PA) company to lay low for a year or so, perhaps until a new President is sworn in to office in early 2017. Comcast customers, meanwhile, could see a greater focus on service as well as more options in TV packages.

Comcast could be forced to lean on revenue growth from its current portfolio of TV, Internet, and entertainment assets, or expand globally, as other telecommunications companies, such as AT&T and DirecTV, frantically arrange mergers in the United States. "Comcast is likely sidelined for the time being for any material transactions. Even large content deals would be a tough sell," telecommunications analyst Craig Moffett said. "That could force them to look overseas," he said. "But for now, they don't have to do anything at all. They are performing very well, and they still have lots of organic growth opportunities to pursue."

Pilot project in central Minnesota strives to set model for FirstNet

One of the big concerns about the First Responder Network Authority (FirstNet) is not only how a nationwide broadband network for public safety will be created but how it will be sustained with funding. A group in central Minnesota hopes to show that cooperation between the private and public sectors can work to support public safety. The pilot project involves the State of Minnesota, Great River Energy, Motorola, NewCore Wireless, Central Transport Group, the City of Elk River, Tessco and CommScope. Private-sector partners donated equipment, tower space, technical services and carrier services at no cost to the government.

"Our project reached out into the private sector, so we wanted to be able to demonstrate that if the FirstNet network is to be built and operated, there will have to be a financial budget put in place that allows that system to operate, and by just putting public safety devices on that network, it's going to be hard to generate enough revenue to pay for capital and operating expenses," explained Albert Kangas, GM and COO of NewCore Wireless. One of the ideas for supporting FirstNet involves the private sector purchasing bandwidth on the network, but those users would be pre-empted by first responders when they need it. "So it's finding that private sector use that fits in with the mission of FirstNet," as well as being able to fund the project.

Prioritization Upgrade: Expanding Diversity in Our Technology Ecosystem Now

[Commentary] We are excited to be out in California to roll up our sleeves and participate in the “Diversity in Tech” workshop, hosted by the White House and the Kapor Center for Social Impact. We are here to brainstorm and strategize with innovators from throughout the technology ecosystem to learn about what's worked for employers to recruit, retain, and advance top talent from under-represented communities, and for venture capitalists to fund and advise the full range of early start-up teams.

We will hear about what’s working already that could be scaled now, as well as understand where challenges need pilot exploration work and urgent innovation. We are in Silicon Valley because we know that when companies in our technology ecosystem focus on a goal, no industry is better at engineering innovative solutions that have the chance to ignite change throughout our economy. We are looking forward to today’s work, and we’ll share key highlights of what folks come up with!