June 2015

[Commentary] On June 2nd, the Senate Commerce Committee will convene a hearing on the future of the Federal Communications Commission’s Lifeline program. Given the recent GAO report on the program and the FCC report on the broadband Lifeline trial, some folks might argue that Lifeline is irreversibly broken and incapable of accomplishing any credible goals. While I would agree that the existing program is broken and in dire need of reform, I think it would be a mistake to conclude that the program cannot be fixed and modernized for the 21st Century. I was in the Reagan White House when the Lifeline program was debated and ultimately created. Back then the goal of the program was not to increase telephone penetration, but rather to create a program to help low income Americans through a difficult time in life by providing them a tool to get back on their feet. In short, Lifeline was envisioned as part of our country’s social safety net for those with very low incomes or out of work.

Communications technology -- voice service then -- was the critical tool that provided access to emergency services, friends and family, and job opportunities. If you had a phone, you had a chance. Fast forward 30+ years to the 21st Century. People still fall on hard times and they still need safety net programs like Lifeline. But increasingly in today’s society, having a voice line is not enough. The way people find job opportunities today is different than it was back in 1985. We’ve gone from want ads in the newspaper to posting available jobs online. Apps like Facebook and LinkedIn have become important job networking tools. Education and training courses -- even the process of applying for a job -- have all moved online, along with needed services like child care. In short, Internet access has quickly become the more needed Lifeline technology for the 21st century. If we still believe this part of the social safety net was soundly conceived and is still needed today -- and I do -- we need to focus on fixing the program to eliminate abuses and modernizing it to meet today’s needs, all while preserving the essence of the program’s good intentions.

Telecommunications companies seeking a stay of the Federal Communications Commission network neutrality rules are using their tailored request to stay part of the rules as a way to undermine them entirely, the Federal Communications Commission and a group of intervenors said in separate May 22 filings. “Petitioners’ stay motion is not what it seems,” the FCC said in its filing. “It asks the Court to halt the application of Title II of the Communications Act to broadband, while allowing three bright-line rules to go into effect. But those bright-line rules are precisely the kind of regulation this Court held could not be applied until and unless broadband was reclassified as a ‘telecommunications service,' ” the FCC said.

The intervenors supporting the FCC rule made similar arguments, stating that the potential harms of a stay would be significantly greater to them than to the groups opposing the FCC rules. The intervenors include 22 online video and voice over Internet protocol (VoIP) telephone providers, competitive Internet service providers (ISPs), Internet backbone operators, venture capitalists and advocates for privacy, accessibility, consumers and social justice. “Many Intervenors depend on the pipes controlled by Petitioners for their customers to access Intervenors’ services, even as they compete with Petitioners themselves in the provision of those services,” they said. The intervenors also said examples of harm provided by smaller ISPs in the petitioners' motion for stay were a smokescreen for the “shrug with which the majority of the industry has greeted the Order.” Intervenors added that petitioners' “litigation-driven rhetoric is belied by what many of their members have represented to the capital markets.” They and the FCC cited statements by Comcast and Cablevision Systems that indicated that Title II-based rules wouldn't significantly impact their businesses.

The US Supreme Court buttressed speech protections on the Internet, throwing out the conviction of a man who used graphic language on Facebook to suggest he might kill his wife, kindergarten students and an FBI agent. The case marks the first time the high court has ruled on the rights of people when they post on social media. It tested how the federal threat statute applies in a world of online communications, with their potential to reach thousands of people instantly and to be misunderstood. A lower court had said prosecutors needed to show only that a reasonable person would view Anthony Elonis’s statements as a threat.

Writing for the court, Chief Justice John Roberts said prosecutors need to prove more than that -- at least that Elonis’s comments were reckless and perhaps that he meant for his words to be taken as a threat. “Federal criminal law generally does not turn solely on the results of an act without considering the defendant’s mental state,” Chief Justice Roberts wrote. Elonis, who cites the rapper Eminem as an inspiration, said his posts were therapeutic rap lyrics and weren’t intended as threats. One post said, “I’m not gonna rest until your body is a mess, soaked in blood and dying from all the little cuts.” Another envisioned his wife’s “head on a stick.” The justices didn’t decide whether Elonis’s First Amendment rights were violated, instead interpreting the federal threat statute in a way that averted potential constitutional problems.

[Commentary] “We’re moving on” is a phrase that Comcast CEO Brian Roberts has been saying a lot lately. He said it the day before, when Comcast announced its blowout first-quarter earnings (a 10 percent rise, to $2.06 billion), and he said it on April 24, when the company walked away from its failed $45 billion bid for Time Warner Cable. It’s no wonder why. The experience was a traumatic one for the company -- or should have been. It wasn’t just that the merger fizzled. Lots of proposed unions don’t end up being consummated. It was how it failed.

The deal’s demise and the years leading up to it present a case study in corporate solipsism. Comcast, say many, has long acted like the company that never needed anybody -- seeming to alienate networks on its cable system, Silicon Valley partners, and countless numbers of its own customers -- to the point where it found itself with few allies when the merger was being reviewed. The Philadelphia (PA) company, indeed, might offer a rare lesson in whether having a reputation for good corporate community-ship actually matters in today’s hypercompetitive world. The company says it got serious about fixing its customer-service image before it ever thought of merging with TWC. Asked whether his customers’ criticisms had anything to do with the merger’s failure, Roberts had this to say at a press event during the big Chicago cable expo: “You would have to ask the decision-makers, but I think irrespective we have been on this journey for a while. Probably my own view, deep down, it didn’t. It wasn’t determinative.” We’ll never know that for sure, of course. But if the company’s mean-girl rep wasn’t “determinative” in thwarting the merger, it has clearly become the target of Comcast’s top brass today -- and this strategic refocusing for the cable company may ultimately be more essential to its long-term success than a marriage with TWC ever would have been. What may be the biggest irony in this case study in corporate relations is that Comcast’s legions of adversaries may have made the company that much stronger. The boys at Harvard will be studying this one for years.