June 2015

Like unlimited data plans, the two-year contract and the subsidized cellphone are on the endangered species list. “I think it is one of those options that is going to go away slowly,” said AT&T CEO of mobile and business solutions. The shift will happen, de la Vega said, “not because we insist on it but because customers will choose it less often.” Already AT&T has been shifting its focus toward plans where customers pay full price for their phones by financing them over a period of months. An iPhone that would cost $199 with a two-year contract would cost $649 paid over a period of 18 to 30 months on these new plans. Nearly two-thirds of last quarter’s smartphone sales were on one of the so-called Next plans where devices are sold without a subsidy.

AT&T took a huge step toward doing away with subsidized phones by eliminating two-year contract pricing at third-party stores such as Best Buy and the Apple Store. Smaller rival T-Mobile spearheaded the move away from subsidized devices when CEO John Legere eliminated the two-year contracts back in March 2013 and began selling all phones unsubsidized. Though T-Mobile was an outlier at the time, it is a move embraced across the industry with all major carriers focusing on plans that separate the cost of a device from the cost to provide wireless service.

[Commentary] Concern about seniors being left behind in the digital divide is not a recent phenomenon. Some efforts date back to the mid-1990s. Others emerged when the federal government began to pay serious attention about a decade ago. The Obama Administration has made 21st century telecommunications technology a priority for all Americans. Faced with the Great Recession, the President Barack Obama signed the American Recovery and Reinvestment Act in February 2009. This economic stimulus package included funds to expand broadband infrastructure, increase the number of public computer centers and implement broadband adoption programs. ARRA funds created the Broadband Technology Opportunities Program (BTOP), administered by the Department of Commerce’s National Telecommunications & Information Administration (NTIA).

In his January 14, 2015 announcement of Broadband USA’s plans to help with community broadband plans, NTIA Administrator Larry Strickland stated, “Our grantees also have established or upgraded 3,000 public computer centers, trained more than four million people and helped roughly 735,000 households sign up for broadband.” BTOP funding ended in December 2013. A small number of BTOP projects focused on seniors. Here are a few highlights.

[Cecilia Garcia, former Executive Director of the Benton Foundation, is a communications advisor with an extensive background in public affairs, television production and advocacy]

House Democratic Whip Steny Hoyer (D-MD) warned that Senate changes to legislation reining in the National Security Agency's surveillance powers would likely sink the bill in the House. The Senate voted to advance a House-passed proposal that reauthorizes certain post-9/11 spying powers while ending the National Security Agency’s bulk collection of phone records. But Senate Majority Leader Mitch McConnell (R-KY) is urging a series of amendments to the bill, which if approved would require another vote in the lower chamber.

Top lawmakers on the House Judiciary Committee -- including Chairman Bob Goodlatte (R-VA), Ranking Member John Conyers Jr. (D-MI) and Reps Jim Sensenbrenner (R-WI) and Jerrold Nadler (D-NY) -- warned that the House "is not likely to accept" Majority Leader McConnell's changes. Rep Hoyer predicted the same outcome. "There could be an amendment that is relatively noncontroversial. We'll see. But none of the amendments that I've heard talked about are noncontroversial," Rep Hoyer said. "Clearly, what the four most-involved members on the Judiciary Committee have said is that if the amendments that are being discussed … if those are adopted, they do not believe they would be acceptable by the House. "I agree with their proposition."

The House Commerce Committee will take up a formerly bipartisan Federal Communications Commission process reform bill with Democratic Representatives no longer on board, according to House Communications Subcommittee Chairman Greg Walden (R-OR). He said he hoped Ranking Member Anna Eshoo (D-CA) would "rethink her position." According to Chairman Walden, she is planning to introduce her own version of the bill that includes three Democratic bills and a key change. One of Ranking Member Eshoo's primary problems with the bill is that it delays allowing more than two FCC commissioners to meet outside of public meetings until other reforms in the bill are already in place.

Chairman Walden pointed out in a contentious Subcommittee markup on the reform bills that the delay had been part of the bill when it passed the House unanimously last Congress, and felt he had an agreement with Ranking Member Eshoo on the provision. But Democratic Representatives also have issues with Republican Representative amendments, including one that would require the FCC to make public decisions being made on delegated authority 48 hours before the actions were taken and one that would require it to publish drafts of proposed decisions before they are voted. Democratic Representatives have said that latter proposal stemmed from FCC Chairman Tom Wheeler's decision not to publish a draft of his Title II order, which House Republicans had pressed for. Chairman Walden says the proposed reform predates that. Chairman Walden has said those proposals would not be "burdensome" on the FCC. "We are moving forward on these bills," he said, but "have not been able to get support from our Democratic colleagues," which he said puts them in the box of supporting continued secrecy at the FCC."