August 2015

Tech-Media Mergers’ Flimsy Script

[Commentary] Big Tech and Big Media may partner to shape the future of TV. But that doesn’t necessarily mean they’re getting together completely. The view that cable industry consolidation, advertising pressures and declining pay TV subscriber numbers will push major US media firms to merge has been a topic of conversation since Comcast first announced plans to buy Time Warner Cable in early 2014. But for at least as long, media bankers, investors and even the media firms have talked up another merger idea: namely, that technology giants such as Apple, Google, Facebook, Netflix or Amazon.com will acquire media companies.

The tech industry has long aimed to muscle in on pay TV and its advertising dollars. Netflix and Amazon already have streaming services, helping to undermine TV ratings and fuel cord-cutting. Yet all prospective TV entrants face tough gatekeepers in the form of major media firms whose content is seen as essential to the success of Web-based TV. Still, that doesn’t mean Big Tech will simply go shopping for companies. For one, tying the knot with a single media firm might hinder negotiations with others. A deal might hedge the costs of buying content. But for most tech companies where TV isn’t the core business, those costs are less material anyway versus what they represent for a cable company like Comcast, which owns NBCUniversal. And any tech-sector acquirer would be paying a premium for a business model tied directly to the very TV ecosystem the buyer seeks to disrupt. Netflix, one of the biggest video innovators, has never bought another firm.

Congress Still Has a Long Way to Go On Surveillance Reform

[Commentary] In 2013, the Information Technology and Innovation Foundation estimated that if concerns about US surveillance caused even a modest drop in the expected foreign market share for cloud computing services, it could cost the United States between $21.5 billion and $35 billion by 2016. But it has since become clear that the US tech industry as a whole, not just the cloud computing sector, has underperformed as a result of the US government’s surveillance activities. Therefore, the economic impact will likely far exceed the ITIF’s initial estimate. To turn back the tide of protectionism and boost US competitiveness in the tech sector, it is incumbent on Congress and the Obama Administration to establish new standards for transparency, cooperation, and accountability.

First, the US government should be forthcoming and transparent about its surveillance practices and clearly inform the public about the data it collects domestically and abroad. Second, the US government should work with its trading partners to establish international legal standards for government access to data. This should include international rules for transparency, settle questions of jurisdiction, and limit unnecessary access by governments to citizens of other countries. Only by being forthcoming and honest with the world can the United States hope to repair the trust it has lost and regain its competitiveness.

[Alan McQuinn is a research assistant with the Information Technology and Innovation Foundation]

Wisconsin giving millions to broadband providers to expand in rural areas

For fiscal year 2015, Wisconsin received 13 applications, totaling $1.9 million, for broadband expansion grants -- more than four times the amount awarded. The Public Service Commission gives preference to projects where there are matching funds. Going forward, there also will be a preference for projects that can be expanded in a cost effective way, according to the agency. A PSC panel makes recommendations, but the final decisions are made by the agency's three commissioners, appointed by Gov. Scott Walker (R-WI), who review the applications. "Local politicians send us letters of support ... and in some cases (their communities) put up money. This is a competitive process. We are going to get many more applications than we can possibly fulfill," said Dennis Klaila, a program and policy analyst for the agency. So far, there hasn't been an analysis to determine whether the work funded by the grants was completed or how effective it's been. "We have site visits tentatively scheduled for October, but there's nothing I can show you at this point," Klaila said.

Some of the grants have been for large providers, such as TDS Telecom, which owns Central State Telephone Co., the firm that received $100,000 for extending broadband near Wisconsin Rapids. TDS, the seventh-largest local exchange telephone company in the United States, also received millions of dollars in federal stimulus money to expand broadband services in Wisconsin and other states. All of the easy-to-serve areas of the country have broadband. It's reaching the remaining 10 percent or 15 percent that's difficult, said Andrew Petersen, a TDS vice president. "We would love to see the size of the (state) broadband grant program increase 100 fold," Petersen said. "We will spend more than $180 million in cap

FCC maps intersection of broadband and health in Virginia

The first state map visually demonstrating the connection between broadband access, technology and health is up on the Federal Communication Commission’s website. The Connect2HealthFCC map of Virginia is a result of an FCC task force formed March 2015 to consider ways to accelerate the adoption of health care technologies by leveraging broadband and other next-generation communications services.

The FCC envisions that future healthcare systems will use broadband-based tools that will allow clinicians, social services providers and pharmacies to collaboratively help reduce disease and optimize health outcomes – all in an interconnected health care ecosystem. For this first map, the FCC task force collected broadband-based health and technology metrics in Virginia to identify current trends, issues and potential gaps. Besides population and download speeds, those metrics include the number of primary care providers per county, online access to health information, obesity prevalence and broadband provider distribution.

FCC Promotes Greater Supplier Diversity

[Commentary] On Aug 20, I had the opportunity to attend the morning sessions of the Federal Communications Commission’s Fourth Supplier Diversity Conference, which highlighted the importance of these efforts in the communications industry. The FCC’s Office of Communications Business Opportunities (OCBO) organized the event and during my welcoming remarks, I gave a special “shout out” to Director Thomas Reed because, prior to his tenure, the agency had never held supplier diversity workshops.

It is not often mentioned, but diversity is woven into the very fabric of our national communications policy. Section 257 of the Communications Act directs the FCC to lower barriers to entry for entrepreneurs and small businesses, in the provision of parts and services, to communications companies. Even if this directive were not in our federal statute, supplier diversity is important because it yields tremendous benefits to all stakeholders, not just the companies awarded the bid. Supplier diversity adds great economic value to our nation because it enables these diverse businesses to grow, which in turn, produces incredible multiplier effects.

FCC Authorizes The Micronesian Telecommunications Corporation To Receive Over $2.5 Million and Hawaiian Telcom Inc. to Receive Over $4 Million In Connect America Phase II Support

The Wireline Competition Bureau of the Federal Communications Commission authorizes the Micronesian Telecommunications Corporation (MTC) to receive Connect America Phase II model-baed support for the Northern Mariana Islands and authorizes Hawaiian Telecom Inc. (Hawaiian Telecom) to receive Connect America Phase II model-based support of the state of Hawaii. Accordingly, we authorize and direct the Universal Service Administrative Company (USAC) to obligate and disburse from the Universal Service Fund the Phase II support amounts identified below of MTC and Hawaiian Telecom.

As required by the FCC, consistent with MTC and Hawaiian Telecom's election, we direct USAC to disburse to each carrier form the broadband reserve account a lump sum payment associated with January through July 2015 because the Phase II model-based support for the areas where they are accepting support is greater than their Phase I support.

FCC Seeks Comment on M2M Specturm Networks Petition for Rulemaking to Allow Specialized Mobile Radio Services Over 900 MHz Business/Industrial Land Transportation Frequencies

On June 26, 2015, M2M Spectrum Networks, LLC (M2M) filed a Petition for Rulemaking requesting that the Federal Communications Commission open a rulemaking proceeding to allow use of 896-901/935-940 MHz (900 MHz) Business/Industrial/Land Transportation (B/ILT) channels to provide for-profit service to B/ILT eligibles. By this Public Notice, the FCC seeks comment on the Petition for Rulemaking. M2M proposes that Section 90.617(c) be amended to permit SMR systems of 900 MHz B/ILT channels provided that the end-users are B/ILT-eligible.

Commenters that support permitting for-profit service to third-party B/ILT eligibles on 900 MHz B/ILT channels should discuss whether the proposed rule amendment is the best approach, or whether other or additional rules changes should be made, such as redesignating the 900 MHz B/ILT channels as General Category channels. More generally, commenters should address whether use of 900 MHz channels to provide for-profit service to B/ILT elgibles is desirable, the effect that such a rule change would have on the availability of 900 MHz B/ILT spectrum for traditional B//ILT users, and the extent to which such for-profit operations already may exist despite the prohibition in Section 90.617(c). Finally, commenters are asked to address whether the M2M proposal is compatible with the petition for rulemaking filed November 14, 2014 by the Enterpirse Wireless Alliance and Pacific DataVision, Inc., proposing that the 900 MHz band be divided into a 3/3 MHz broadband segment (898-901/937-40 MHz) and a 2/2 MHz narrowband segment (896-98/935-37 MHz).

Vice President Biden Announces New Communications Director

Vice President Joe Biden announced that Kate Bedingfield will serve as his Communications Director, starting Aug 24. She succeeds Shailagh Murray, who was appointed Senior Advisor to President Barack Obama.

Bedingfield comes to the Vice President’s office from Motion Picture Association of America, where she was the Vice President of Corporate Communications. Prior to working at MPAA, Bedingfield was an associate communications director at the White House where she managed communications planning around the Administration's priorities. While at the White House, Bedingfield also served as the Deputy Director of Media Affairs and the Director of Response. In 2008, Bedingfield was the communications director for Jeanne Shaheen for Senate. A native of Atlanta (GA) Bedingfield graduated from the University of Virginia. She and her husband live in Washington (DC) with their son.

A New Kind of Media Using Government Data

[Commentary] MSNBC has published a data-heavy story collection that takes advantage of the Internet’s power to communicate not only faster, but in different and meaningful ways. “The Geography of Poverty” combines narrative, data graphics, and photo-essay content through an interface so seamless as to be almost invisible. So far they have released three of what will eventually be five parts, but already they have tapped datasets from BLS, Census, the Department of Agriculture, and EPA. They combined these federal sources with private data: factory data from Randy Peterson and Chemplants.com; displacement information from news sources; Mary Sternberg's “Along the River Road”; and Steve Lerner's Diamond and Kate Orff's research in “Petrochemical America.” These layers of data feed visualizations which provide a deeper understanding of the highly personal stories the photos tell; the text weaves the elements into a cohesive whole.

Today’s web tools make this kind of reporting not only possible, but fairly simple to assemble. The result is a new kind of media that mixes the personal and the societal, the social and the environmental, fitting small scale stories of individuals and local communities into the broader context of our whole nation.

[Eric Newburger is Senior Scientist for Data Training, Office of the Chief Data Officer]