July 2015

LIFELINE

FCC'S LIFELINE PROGRAM RIPE FOR FRAUD, ABUSE
[SOURCE: Politico, AUTHOR: FCC Commissioner Michael O'Rielly, Rep Marsha Blackburn (R-TN)]
[Commentary] The Federal Communications Commission’s low-income program, known formally as Lifeline, has spent billions of ratepayer dollars to provide phone service for poorer Americans. Because of significant waste, fraud and abuse in the program, however, a good portion of that funding has not been used as intended. More than once, the Government Accountability Office has taken the FCC to task for failing to control the program, evaluate its flaws and improve accountability. In June, the FCC proposed to expand Lifeline to subsidize broadband services without adequate controls to prevent further misuse of funds. We have significant concerns about this new course of action. It is not too late to change direction, but doing so would require the FCC to confront the substantial issues plaguing the program and adopt strong solutions. While many reforms are appropriate, two in particular are critical, and the FCC has shown little interest to date in fixing them. First, the FCC must set a spending cap for the program. If the FCC fails to control costs, hard-working taxpayers facing higher phone bills may drop service altogether. The FCC, therefore, has a responsibility to set a spending limit that balances the goals of the program against the burden on consumers nationwide. Second, the program must be better targeted to eligible low-income individuals who would not otherwise sign up for service. Given the significant problems with Lifeline, it is not surprising that many have lost confidence in the program. Rather than rush headlong down a path that will increase spending and multiply concerns about waste, fraud and abuse, the FCC needs to reevaluate the program and address its serious flaws. This means, at a minimum, an overall cap and better targeting. To do less would betray the FCC’s responsibility to Americans to ensure that their money is well spent.
benton.org/headlines/fccs-lifeline-program-ripe-fraud-abuse | Politico
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SURVEILLANCE

ACLU TO APPELLATE COURT: PLEASE HALT NSA'S RESUMED BULK DATA COLLECTION
[SOURCE: ars technica, AUTHOR: Cyrus Farivar]
The American Civil Liberties Union (ACLU) has asked one of the nation’s top appellate courts to order the National Security Agency to stop its bulk records collection, which resumed in limited form in June as part of the USA Freedom Act. The Second Circuit Court of Appeals had previously ruled in ACLU v. Clapper in May 2015 that the dragnet data collection went beyond the scope of what was authorized by Congress. “This dragnet surveillance program should never have been launched, and it should certainly be terminated now,” said Jameel Jaffer, deputy legal director of the ACLU. “Not even the government contends anymore that the program has been effective, and the Second Circuit has already concluded that the program is illegal. It’s a needless and unlawful intrusion into the privacy rights of millions of innocent Americans.” The previous collection program was stopped temporarily when Section 215 of the Patriot Act expired -- but with the passage of USA Freedom on June 2, 2015, the government can access the phone records from the telecommunication companies with an individualized court order from the Foreign Intelligence Surveillance Court (FISC). The FISC allowed the government to continue its existing bulk collection as it transitions to compliance with the USA Freedom Act.
benton.org/headlines/aclu-appellate-court-please-halt-nsas-resumed-bulk-data-collection | Ars Technica
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INTERNET/BROADBAND

HERE'S HOW DATA CAPS REALLY AFFECT YOUR INTERNET USE
[SOURCE: Washington Post, AUTHOR: Brian Fung]
A new paper published by the National Bureau of Economic Research takes actual, real-world data on data usage from a North American Internet provider and shows that even for people on fixed, wired home broadband, data caps have a dramatic effect on consumer behavior. It turns out that data caps are incredibly effective at getting people to use less data, and not merely on cellphone plans. The study looks at tens of thousands of subscribers belonging to an unnamed provider of high-speed broadband in four markets. And one key takeaway is that the closer people get to hitting their data caps, they more they make a conscious decision to use less Internet. Meanwhile, consumers who are near the end of their monthly billing cycle but still have a chunk of unused data will use more of it, in an attempt to make the most of their plans. This might sound obvious in the context of your cellular bill; you probably know how much data you pay for by heart. But Williams was studying the effect of data caps on residential Internet. Such limits on home broadband are relatively rare in the industry, but some providers have considered rolling them out more widely. The really interesting difference has to do with folks on data-capped or usage-based plans versus those on "unlimited" plans with no data caps. At the time the data was collected, in 2012, this particular provider offered higher speeds to those on capped plans, perhaps as incentive to get unlimited data users to switch. People valued the extra speed they got from the metered plans far more than they valued the extra data they got on unlimited data plans.
benton.org/headlines/heres-how-data-caps-really-affect-your-internet-use-according-data | Washington Post | Usage-Based Pricing Study
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REGULATION AND INVESTMENT: UNCERTAINTY, WITH AN APPLICATION TO FCC TITLE II
[SOURCE: Georgetown University, AUTHOR: Kevin Hassett, Robert Shapiro]
The impact of regulation on investments in fixed capital has been a central focus of economic inquiry for decades. As a general rule, economic theory can suggest either a positive or a negative role for regulation, depending on the circumstances. Recent years have seen a surge in empirical studies that seek to estimate the overall impact of regulation on investment and overall economic activity. In addition, more traditional studies analyzing specific micro-level policies have continued to contribute to our understanding. In this paper, we explore the unique challenges facing policy evaluations of the effects of regulation on investment and provide guidance on overcoming the adverse circumstances. In addition, we discuss the impact of two types of uncertainty – uncertainty regarding the actions of regulators, and uncertainty regarding the likely impact of regulations – and draw implications for the modeling of the actions of both. We close with a specific application to the current debate over net neutrality regulation of Internet service providers. We showed that Title II regulation should be expected to increase costs, and therefore is the type of policy that should be expected to reduce investment. Second, we reviewed field-specific evidence that suggested that the scale of the negative effect could be quite large, from about 5.5 percent to as much as 20.8 percent.
benton.org/headlines/regulation-and-investment-uncertainty-application-fcc-title-ii-regulation-internet | Georgetown University
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BROADCASTING/TELEVISION

NAB ACCUSES RETRANSMISSION REFORMERS OF MANUFACTURING A CRISIS
[SOURCE: Katy on the Hill, AUTHOR: Kathryn Bachman]
Broadcasters warned the Federal Communications Commission that retransmission reform advocates of “manufacturing” disputes to “spur the government to regulate more heavily.” The FCC is about to tread into the thorny, never-ending debate over the retransmission consent regime as prescribed by language in the satellite reauthorization bill (STELAR) passed in 2014. In a section (103) of the bill, Congress asked the FCC to commence a rule making within nine months “to review its totality of the circumstances test for good faith negotiations.” Meeting with FCC officials the week of July 6, executives from the National Association of Broadcasters argued that nearly all retransmission consent agreements are inked without any interruption to consumers’ service. But as August draws near, the NAB predicted that some pay TV companies would create conflict to try and convince the FCC to make changes to the current retransmission consent regime. “The commission should… not be surprised by an uptick in pay TV-manufactured disputes as it launches its… proceeding. The commission should keep a close eye on this trend, as bad actors should not be rewarded with government assistance, especially when those actions come, yet again, at consumers’ expense,” the NAB wrote in an ex parte filed with the FCC on July 13. Citing recent SNL Kagan data, the NAB argued that retrans fees are not the leading reason why consumers’ pay TV bills are growing.
benton.org/headlines/nab-accuses-retransmission-reformers-manufacturing-crisis | Katy on the Hill
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FCC ANNOUNCES ROUNDTABLE EVENT TO DISCUSS CLOSED CAPTIONING OF PUBLIC ACCESS AND GOVERNMENTAL PROGRAMMING
[SOURCE: Federal Communications Commission, AUTHOR: Public notice]
The Federal Communications Commission announced it will hold a forum on November 10, 2015, to promote discussion about closed captioning of public access and governmental programming shown on television. The event will include discussions about the benefits of captioning such programming, the relevant captioning obligations of programmers and stations, and effective and efficient captioning solutions. The event will engage local government professionals, policy makers, captioning vendors, consumer groups, engineers, representatives from the programming industry, and others as appropriate. The goal of this event is to raise awareness of the issues surrounding captioning of public access and governmental programming.
benton.org/headlines/fcc-announces-roundtable-event-discuss-closed-captioning-public-access-and-governmental | Federal Communications Commission
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CONTENT

AUTHORS GUILD DEMANDS ISPS MONITOR, FILTER INTERNET OF PIRATED GOODS
[SOURCE: ars technica, AUTHOR: David Kravets]
The Authors Guild, one of the nation's top writer's groups, wants the US Congress to overhaul copyright law and require Internet service providers (ISPs) to monitor and filter the Internet of pirated materials, including e-books. The guild, in a letter to the House Judiciary Committee as it mulls changes to copyright law, says the notice-and-takedown provisions of the Digital Millennium Copyright Act favor large corporations like Google over individual writers. The group said that ISPs purge the Internet of infringing content on their own. As the law now stands, ISPs are not legally liable for pirated content, and they get "safe harbor" immunity from infringement allegations as long as they remove infringing content at the owners' request. The guild's executive director, Mary
Rasenberger, believes that ISPs have the technology and resources to remove pirated works without being notified that pirated content is on their networks. In the letter to the committee, Rasenberger wrote, "Technology that can identify and filter pirated material is now commonplace. It only makes sense, then, that ISPs should bear the burden of limiting piracy on their sites, especially when they are profiting from the piracy and have the technology to conduct automates searches and takedowns. Placing the burden of identifying pirated content on the individual author, who has no ability to have any real impact on piracy, as the current regime does, makes no sense at all. It is technology that has enabled the pirate marketplace to flourish, and it is technology alone that has the capacity to keep it in check."
benton.org/headlines/authors-guild-demands-isps-monitor-filter-internet-pirated-goods | Ars Technica
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JOURNALISM

THE EVOLVING ROLE OF NEWS ON TWITTER AND FACEBOOK
[SOURCE: Pew Research Center’s Journalism Project, AUTHOR: Michael Barthel, Elisa Shearer, Jeffrey Gottfried, Amy Mitchell]
The share of Americans for whom Twitter and Facebook serve as a source of news is continuing to rise. This rise comes primarily from more current users encountering news there rather than large increases in the user base overall, according to findings from a new survey. The new study, conducted by Pew Research Center in association with the John S. and James L. Knight Foundation, finds that clear majorities of Twitter (63 percent) and Facebook users (63 percent) now say each platform serves as a source for news about events and issues outside the realm of friends and family. That share has increased substantially from 2013, when about half of users (52 percent of Twitter users, 47 percent of Facebook users) said they got news from the social platforms. Although both social networks have the same portion of users getting news on these sites, there are significant differences in their potential news distribution strengths. The proportion of users who say they follow breaking news on Twitter, for example, is nearly twice as high as those who say they do so on Facebook (59 percent vs. 31 percent) -- lending support, perhaps, to the view that Twitter’s great strength is providing as-it-happens coverage and commentary on live events. Among other key findings in the report:
Twitter news users are more likely than their counterparts on Facebook to report seeing news about four out of 11 topics.
The rise in the share of social media users getting news on Facebook or Twitter cuts across nearly every demographic group.
When it comes specifically to news and information about government and politics, Facebook users are more likely to post and respond to content, while Twitter users are more likely to follow news organizations.
benton.org/headlines/evolving-role-news-twitter-and-facebook | Pew Research Center’s Journalism Project
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ELECTIONS AND MEDIA

UBER AND CAMPAIGN 2016
[SOURCE: San Jose Mercury News, AUTHOR: Michelle Quinn]
[Commentary] If you are running for president, chances are you are going to talk about Uber, whether your spin is boosting entrepreneurship, heralding the creative use of technology or cautioning against the erosion of labor protections. GOP candidates are evoking these sharing-economy companies to show that they are modern, pro-tech, pro-innovation. But beware the trendy campaign stunt. Holding up Uber as a model of American ingenuity is risky when the company is facing legal challenges over how it treats workers. Likewise, knocking the sharing economy can make a candidate look out of step with the modern world. "It's the first election that this is a real part of people's daily life and an important part of our economy," said Michael Beckerman, chief executive and president of the Internet Association, which counts Uber, Lyft and Airbnb, the room-listing site, as members. "It's going to create an interesting voting block of people who understand the opportunities."
benton.org/headlines/how-did-uber-become-campaign-issue | San Jose Mercury News
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STORIES FROM ABROAD

UK SURVEILLANCE REPORT
[SOURCE: The Guardian, AUTHOR: Ewen MacAskill]
Privacy campaigners have secured significant concessions in a key report into surveillance by the British security agencies. The 132-page report, A Democratic Licence To Operate, which Nick Clegg commissioned in 2014 in the wake of revelations by the US whistleblower Edward Snowden, acknowledges the importance of privacy concerns. “Privacy is an essential prerequisite to the exercise of individual freedom, and its erosion weakens the constitutional foundations on which democracy and good governance have traditionally been based in this country,” the report says. It says that there are “inadequacies in both law and oversight that have helped create a credibility gap that has undermined public confidence”. The report proposes that the intelligence services retain the power to collect bulk communications data on the private lives of British citizens, but it also now concedes that privacy must be a consideration throughout the process. The report, written for the Royal United Services Institute (RUSI) by a panel that includes three former heads of UK intelligence agencies, also calls for an overhaul of existing legislation. Despite its concessions to the privacy lobby, the report overall is more favourable to the police and intelligence services than to the campaigners.
benton.org/headlines/privacy-campaigners-win-concessions-uk-surveillance-report | Guardian, The
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Analysis

July 2015

Airwaves auction may shrink -- not increase -- wireless competition

Remarks of FCC Public Safety Bureau Chief Rear Adm. David Simpson at NARUC Panel on E911 Governance

Entercom Required to Divest Three Denver Radio Stations As Part Of Lincoln Acqusition

DOJ official: FOIA pilot program is aware of some journalists’ exclusivity concerns

Google Fiber Expands in Austin

House Appropriations Committee Dents Budget for Cyber Tool That Scoped Out OPM Breaches

Cybersecurity warnings: Will we ignore all of this?

Digital Ad Report: Google Hitting Plateau on Search, Feeling Heat From Facebook

July 15, 2015 (Lifeline; Surveillance; Data Caps)

How did Uber become a campaign issue?