October 2015

PRIVACY

JUDICIAL REDRESS ACT
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
The House approved the Judicial Redress Act, a bill that would extend certain Privacy Act rights to European citizens — a must-pass bill if the United States wants to finalize an agreement with European countries to share law enforcement information. The Judicial Redress Act, which passed by voice vote, would allow European citizens to file legal action in US courts if the United States unlawfully disclosed their personal information. Technology companies have seen the bill as an important way to improve overseas trust after a series of U.S. surveillance disclosures. The United States and European countries have tentatively agreed to a privacy agreement to allow them to more easily share law enforcement information. But Europeans said no final agreement would be penned until Congress extended the Privacy Act rights to its citizens.
benton.org/headlines/house-votes-extend-privacy-rights-europeans | Hill, The | National Journal
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WILL WE SEE A "SAFE HARBOR 2.0" SOON?
[SOURCE: International Association of Privacy Professionals, AUTHOR: ]
[Commentary] At first I expected the European Commission to patch the current safe harbor within weeks or months. This is also the approach the European Commission is currently working on. After a second review of the European Court of Justice's (ECJ) judgment, it will be very hard to come up with a solution that addresses all problems identified by the Court, given the US position. It also seems questionable if a "Safe Harbor 2.0" will have real benefits for US controllers in practice compared to transfer methods under Art 26 of Directive 95/46. It will be very interesting to watch the dynamics in the coming months. After thinking through the options under the ECJ ruling, it seems that the intended “quick fix” will hardly lead to a new Safe Harbor that provides the necessary legal certainty for controllers. Minding that the two parties have debated for two years to not even get the (very weak) “13 recommendations” program by the European Commission done, it seems a switch to “alternative” transfer methods under Art 26 will be more reasonable than hoping for a Safe Harbor 2.0.
benton.org/headlines/will-we-see-safe-harbor-20-soon | International Association of Privacy Professionals
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MICROSOFT'S PLAN TO AVOID A 'RETURN TO THE DIGITAL DARK AGES' IN WAKE OF SAFE HARBOR DECISION
[SOURCE: Washington Post, AUTHOR: Andrea Peterson]
Tech companies are still reeling from a top European court's decision invalidating Safe Harbor, a trade agreement used by thousands of American companies to transfer European's data across the Atlantic. Microsoft president and chief legal officer Brad Smith argues that privacy is a human right and the Safe Harbor decision is an opportunity for stronger privacy regulations. Smith also warns that without policy changes, the invalidation could signal "a return to the digital dark ages" by setting the stage for a world where data is segregated by nation. But Smith lays out a four-step proposal to address what he calls the "privacy Rubik's cube" of balancing privacy rights, a global Internet and public safety within a legal framework that the company hopes will appease those on both side of the Atlantic. The Microsoft plan is perhaps the most detailed road map released by a company in the wake of the Safe Harbor decision, and would require significant changes to law. The tone of the blog post and speed that such a plan was pulled together likely signals the real threat major tech companies feel from the ruling, which grew out of revelations about US government surveillance from former government contractor Edward Snowden.
benton.org/headlines/microsofts-plan-avoid-return-digital-dark-ages-wake-safe-harbor-decision | Washington Post
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FACEBOOK WILL NOW TELL YOU IF A STATE GOVERNMENT IS HACKING YOUR ACCOUNT
[SOURCE: Quartz, AUTHOR: Josh Horwitz]
Facebook will begin notifying users when it suspects a state-affiliated entity has attempted to hack into their account, chief security officer Alex Stamos said on Oct 17. The company implemented this system because attacks from state-affiliated organizations “tend to be more advanced and dangerous than others,” Stamos said. Facebook won’t reveal how it distinguishes between security breaches that originate from the government versus those that come from other hackers. Facebook has chosen a timely moment to announce this feature, from a user point of view. But given the company’s ambitions in China, it is also a somewhat unusual time.
benton.org/headlines/facebook-will-now-tell-you-if-state-government-hacking-your-account | Quartz
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INTERNET/TELECOM

CABLE COMPANIES ARE EXPERIMENTING WITH METERED DATA
[SOURCE: Slate, AUTHOR: Eli Dourado]
[Commentary] As of Oct 1, Comcast customers in a few small markets are now subject to metered data use. Households that use more than 300 gigabytes of data per month will have the choice to pay $10 for an extra 50 gigabytes or $30 per month for unlimited service. The cable giant joins the No. 4 player in the industry, Cox Communications, in offering tiers that vary in price depending on data use. Metered data has a bad reputation with many Internet users. Nobody wants to calculate how much streaming a movie or downloading a new video game costs in data charges. But in fact, metered data is good for most consumers and for the Internet. Broadband networks are composed almost entirely of fixed costs -- costs that don’t vary very much with usage. Cable companies have to spend many billions of dollars to build and maintain their networks whether or not we use them. One way or another, users of the network have to collectively pay those billions of dollars. Metering broadband is an efficient way to expand access and improve speeds for customers of all income levels. Without pricing flexibility for Internet service, we run the risk of shutting our most vulnerable populations off from the many opportunities in our networked world.
[Eli Dourado is a research fellow at the Mercatus Center at George Mason University and director of its technology policy program]
benton.org/headlines/cable-companies-are-experimenting-metered-data | Slate
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BROADBAND USAGE CAPS ARE PROBABLY INEFFICIENT
[SOURCE: Digitopoly, AUTHOR: Joshua Gans]
[Commentary] In Slate, Eli Dourado has a post in support of Comcast’s move to cap broadband usage at 300GB per month unless you want to pay $10 for a little more or $30 for unlimited. I have played the "rational economist explains to consumers why a restriction is good for them card" more times than I can count and Dourado has set himself up nicely for a shellacking. While he has a point, I think it is only part of the story and that he is likely on the wrong side of the argument in a historical sense. The problem is that this logic rests on there being a competitive market and US broadband does not look that competitive to me. While Dourado’s argument still holds for a monopolist, an Internet service provider (ISP) with market power is going to find it worthwhile to squeeze consumers more to get them to pay more. Specifically, the function that relates charges to download limits is going to be much steeper than it would be if there was a pure cost-recovery thing going on. This was the finding in a paper by Economides and Hermalin that took into account the features that Dourado focussed on. Yes, the ISP will install more bandwidth but it will also cap usage more stringently than would be efficient in a social sense.
benton.org/headlines/broadband-usage-caps-are-probably-inefficient | Digitopoly
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WHY INTERNET PLATFORMS DON'T NEED SPECIAL REGULATIONS
[SOURCE: Information Technology and Innovation Foundation, AUTHOR: Joseph Kennedy]
The main value of an Internet platform is in providing a common place for other market participants to find each other and easily conduct transactions. These companies create value in several ways: 1) improving resource use; 2) increasing competition; 3) reducing transaction costs; 4) reducing asymmetric information between buyers and sellers; and 5) bringing new buyers and sellers into the market. The danger is that, because these often enormous benefits are hard to quantify, policymakers will discount them and only look at the perceived market power of the platform. Antitrust regulators still need to be watchful, but they cannot merely assume that a platform is behaving in an illegal manner and harming consumers just because it is doing something that they don’t like or understand. Instead, regulators need to make detailed, case-by-case determinations about whether total social welfare has been harmed. Standard antitrust orientations and tools may be of limited use. Given the value created and the existing market constraints, there are few reasons to fear that Internet platforms pose a unique challenge to markets and competition. Moreover, regulators already have sufficient legal powers to act against the most likely problems. The question is whether they will instead divert their attention to unlikely ones, and in the process risk reducing Internet platform innovation.
benton.org/headlines/why-internet-platforms-dont-need-special-regulations | Information Technology and Innovation Foundation
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ON ENTERPRISE BROADBAND, THE FCC CAN'T LEAVE WELL ENOUGH ALONE
[SOURCE: Fortune, AUTHOR: Larry Downes]
[Commentary] Back in 2012, I flagged what I saw as a cynical decision by the Federal Communications Commission to take a closer look at the fast-changing market for enterprise broadband services. Such services constitute the middle mile of the Internet, and include dedicated business-to-business access as well as backhaul for mobile networks carrying data from cell towers to the rest of the network. The FCC refers to these services as “special access." Even at the time, there was undisputed evidence of growing middle mile competition from cable and fiber providers offering faster IP-based connections. Still, the FCC bizarrely chose to reimpose price regulations it had long suspended on the rapidly fading part of the market offered by incumbent phone companies and their increasingly obsolete analog networks. The FCC’s renewed tinkering with the regulated special access market, in other words, is simply prologue for future regulation of new cable and fiber-based competitors, all of it considered and applied at the same leisurely pace we’ve seen since the 2012 order. And why stop at special access? The FCC’s about-face on a decade of decisions to leave the middle mile of the Internet alone won’t just stymie incumbent phone companies eager to retire obsolete analog equipment. Next will be the first mile, the last mile, and every mile in-between. One way or the other, every participant in the Internet ecosystem will feel the hot gaze of the FCC -- or at least the ones the agency is pressured to focus its withering attention on by one set of special interests or another.
[Larry Downes is project director at the Georgetown Center for Business and Public Policy]
benton.org/headlines/enterprise-broadband-fcc-cant-leave-well-enough-alone | Fortune
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SPECIAL ACCESS AND THE FCC'S REGULATORY REVIVAL
[SOURCE: Phoenix Center, AUTHOR: George Ford]
[Commentary] Over the past five years the Federal Communications Commission either has, or has sought to, undermine a large part of the bi-partisan deregulatory achievements of the past two decades. On Oct 16, the FCC added on more item to this growing list when the Wireline Competition Bureau issued an Order launching an investigation into the contract terms of Special Access services offered by the nation’s largest phone companies (including AT&T, Centurylink, Frontier and Verizon). At the heart of the matter are claims by the large phone company customers (e.g., Sprint, Level 3, Windstream, BT Americas, XO, and so forth) that they are no longer happy with the terms of their contracts, including the terms for volume discounts that require the buyers hold relatively stable their purchases over the contract horizon. The earlier FCC data request on pricing was, in the end, so limited that it will shed little light on the service. This new investigation will eventually reach its own dead end -- it’s targeted to a diversion and the deals it will study are too complex for regulatory control. What the Commission’s Investigation Order does do is signal once more to investors that this Administration is committed to shifting value out of the network core. As a result, investors will increase their assessment of risk in the sector with predictable consequences -- less competition and less investment.
benton.org/headlines/special-access-and-fccs-regulatory-revival | Phoenix Center
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WIRELESS/SPECTRUM

MY INSANELY LONG FIELD GUIDE TO THE LTEU DUST-UP PART II
[SOURCE: Tales of the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] The Vorlons have a saying: “Understanding is a 3-edged sword.” In this case, the three edges are the Wi-Fi dependent, the LTE dependent, and the Federal Communications Commission (FCC). Last time on Spectrum Game of Thrones (hereinafter “SGoT”) I spent 6500 words discussing the first two edges of the sword. The Wi-Fi dependent side has strong reason to suspect the LTE-U crowd of either reckless indifference or actual malice toward deployment of Wi-Fi based streaming services in the newly refurbished U-NII-1 band up in 5 GHz. Even if the Wi-Fi Dependents could trust the motives of the LTE-U crowd, what happens if everyone is wrong about the ability of the two technologies to co-exist? Under the current structure, the Wi-Fi dependents would be screwed, and they could do nothing about it. So the rational Wi-Fi Dependent must fight tooth and nail against deployment of LTE-U. So, as we get to SGoT 2: Storm of Spectrum Swords, we come to another dramatic turning point. Will the Wi-Fi Dependents and the LTE-U Dependents see the wisdom of allowing the FCC assert authority over the land of Spectrumos? Can the FCC be persuaded to fulfill its destiny and its duty? And will the anti-Regulatory Zombies from beyond the Wall crash the party and devour both Wi-Fi and LTE-U because of their hatred of the FCC?
benton.org/headlines/my-insanely-long-field-guide-lteu-dust-part-ii-storm-spectrum-swords | Tales of the Sausage Factory
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VERIZON EXEC HINTS THAT COMCAST, OTHERS WILL EXECUTE ON MOBILE VIRTUAL NETWORK OPERATOR DEAL
[SOURCE: Fierce, AUTHOR: Sue Marek]
It sounds like Comcast and perhaps Time Warner Cable, Bright House Networks and Cox Communications may be preparing to execute on their mobile virtual network operator (MVNO) deals with Verizon, and that offering, as rumored, will probably be a Wi-Fi-first mobile service. During an investor call to discuss the company's third quarter earnings, Fran Shammo, CFO of Verizon, said that Verizon has been notified that the cable companies will execute on the 2011 MVNO deal but said he would not discuss specifics of the agreements. "Obviously the industry is moving. Cable will do what they are going to do and we will do what we will do," Shammo said. However, he then emphasized Verizon's views on Wi-Fi as a complementary service and not a replacement for LTE. "Wi-Fi will not replace LTE," he said. The Verizon MVNO agreement with the cable companies stems from Verizon's 2011 purchase of AWS-1 spectrum from Comcast, TWC, Bright House and Cox. The FCC approved the deal in the summer of 2012 and permitted the MVNO agreement, but the cable companies so far have not launched wireless offerings related to the deal. It's been widely rumored for the past few months that Comcast was planning to execute on its agreement with Verizon and would use that deal as an entry point to launch a Wi-Fi-first service.
benton.org/headlines/verizon-exec-hints-comcast-others-will-execute-mobile-virtual-network-operator-deal | Fierce
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WHY CHINA'S INSATIABLE APPETITE FOR IPHONES COULD HURT CARRIERS IN AMERICA
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Apple's influence on China is so powerful that it could soon skew the market there for used cell phones -- with a ripple effect for the rest of the cellular industry. There are now so many iPhones being sold in China, Verizon chief financial officer Fran Shammo said, that it may wind up affecting the prices that resellers are able to get for their second-hand phones. "There is a lot of Apple product hitting in the Chinese market now, where China was one of the larger areas where we sold off used handsets," Shammo said. "So, as these markets get heavily penetrated with newer product, that could impact the residual value of these phones going forward."
benton.org/headlines/why-chinas-insatiable-appetite-iphones-could-hurt-carriers-america | Washington Post
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ADVERTISING

WIRELESS CARRIER VERIZON IS ALSO IN THE MARKET FOR EYEBALLS
[SOURCE: Associated Press, AUTHOR: ]
Verizon has long been known as a home phone and wireless service provider. But it's evolving to make more money by tracking what we watch and read on our phones. Magna Global, a unit of advertising firm IPG, predicts that digital media ad sales will grow 62 percent in 2015 on mobile. So Verizon is preparing its next act by beefing up its advertising and media business. It spent $4.4 billion earlier in 2015 to snap up AOL, which runs a digital-ad business as well as big Internet sites such asTechCrunch and the Huffington Post. It has also started tracking its mobile users' Internet surfing and other online behavior via controversial identifying code called "supercookies." Verizon's traditional business is still doing just fine. The New York company said that third-quarter revenue rose 5 percent to $33.2 billion, while net income climbed 9.9 percent to $4.17 billion. That makes mobile ads and video "an investment in the future," as eMarketer analyst Martín Utreras puts it, one that for now remains a small part of Verizon. The company is the country's biggest wireless carrier and sells phone, Internet and TV service to millions of homes and businesses. It doesn't break out advertising revenues.
benton.org/headlines/wireless-carrier-verizon-also-market-eyeballs | Associated Press
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TELEVISION

COMCAST TV DATA
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran, Suzanne Vranica]
Comcast is sitting on a potential treasure trove of data on how Americans watch TV. Now, the cable giant is working to unlock that information in ways that it hopes could save the $70 billion US television advertising market. Comcast is seeking to harness viewing data from the set-top boxes and streaming apps used by its millions of cable-TV subscribers to create products it can license to other companies, according to people familiar with its plans. That will require organizing a vast pool of details into “dashboards” that TV networks and marketers can use to tap specific slices of data. Comcast is in talks with audience-measurement firms and television networks, including Walt Disney’s ESPN, Time Warner’s Turner Broadcasting and Discovery Communications, about licensing its data to them. It already has a deal with its own NBCUniversal unit and at least one other media company, said people familiar with the deals.
benton.org/headlines/comcast-seeks-harness-trove-tv-data | Wall Street Journal
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WHY GOOGLE AND TIVO ARE FACING OFF AGAINST COMCAST AND HOLLYWOOD
[SOURCE: Washington Post, AUTHOR: Brian Fung]
Third-party set-top boxes, with certain exceptions, can't get easy access to that live content. How to fix that is shaping up to be a big fight involving some of America's biggest companies, ranging from Google to Comcast. And the outcome could define how you watch your subscription channels for years to come. On one side, you have cable companies that want you to get your cable or satellite TV channels -- such as ESPN or HGTV -- through apps that they design and control. These apps would show up on your iPhone, Xbox One, Fire TV and other devices as coming from Comcast or Time Warner Cable, or whomever your pay-TV company happens to be. Cable operators say replicating the existing pay-TV experience on other devices this way is the only realistic method to honor the complicated rights contracts they have with film and TV creators. For critics of the pay-TV industry, changing the marketplace is the whole point. These consumer advocates and companies want more freedom to create a world where the TV programming doesn't feel so tied to your cable company. Instead, they envision being able to plug different devices into your subscription and getting a different layout and interface every time. At the center of the fight is Hollywood, whose films and TV shows stand to be powerfully affected by the decisions that get made here. And it's warning that opening up pay-TV channels would be bad for business, and possibly even unconstitutional.
benton.org/headlines/why-google-and-tivo-are-facing-against-comcast-and-hollywood | Washington Post
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INSTEAD OF PRESSING 'PLAY' ON NEW VIDEO REGULATIONS, FCC SHOULD TAKE FRESH LOOK
[SOURCE: The Hill, AUTHOR: Thomas Lenard]
[Commentary] The Federal Communications Commission is proposing to "modernize" its definition of Multichannel Video Programming Distributor (MVPD) to include video services delivered over the Internet in addition to cable and satellite video providers. The proposal would apply to prescheduled streams of video programming, which the proposal refers to as "linear programming." It would thus not apply to on-demand services such as Netflix and Hulu. We should pause, but we should do more than that. Indeed, this should be an opportunity for the FCC to take a fresh look at the current video regulatory regime, given the rapidly changing distribution and consumption patterns. If a thorough analysis does indicate that the right policy move would be to deregulate, the FCC should then determine whether it is possible to do so under current law. If it is not possible, the appropriate course would be new legislation. Under any circumstances, it is highly unlikely, if the existing regime doesn't yield net benefits, that extending it would be a good idea. The FCC should take the steps necessary to find out before hitting play on any new regulations.
[Lenard is president and senior fellow at the Technology Policy Institute]
benton.org/headlines/instead-pressing-play-new-video-regulations-fcc-should-take-fresh-look | Hill, The
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DIVERSITY

NEWS ORGANIZATIONS SHOULD USE SOCIAL MEDIA TO IDENTIFY DIVERSE VOICES
[SOURCE: Poynter, AUTHOR: Meredith Clark]
[Commentary] Communication technology has extended the gap between news workers and audiences so that we’re mostly through channels we (media elites) control: letters to the editor, online comments, phone calls that can go ignored and voicemails that can vaporize at the push of a button. Social media, however, has made it a little harder to ignore the din of readers who take umbrage with outlets’ coverage. We live in a world where insight is available from thousands of readers at any given time, yet ignore them for lack of strategy in dealing with social media “outrage.” Make no mistake, there is no shortcut to addressing the diversity imperative in America’s newsrooms. Using social media as a means to identify diverse voices and further engage readers beyond the screen and the page is merely making meaningful use of an outlet’s social-media channels. The labor of diversity work isn’t the audience’s burden; that belongs to the outlet. Using social media to co-develop better coverage is just one part of a shared solution. Media is no longer a one-to-many system in which the traditional approach to tackling issues of diversity will work. The voices of the masses now ring as loudly as the headlines; they cannot be ignored. And they shouldn’t be. Instead, it’s time we listen closely, elevate, and challenge ourselves to amplify readers’ voices rather than give a simple response or ignore them altogether. We have the tools to do it. What we lack is the will.
[Meredith Clark is an assistant professor at the Mayborn School of Journalism at the University of North Texas]
benton.org/headlines/news-organizations-should-use-social-media-identify-diverse-voices | Poynter
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ELECTIONS AND MEDIA

REPUBLICANS TO CHARGE MEDIA TO COVER 2016 CONVENTION
[SOURCE: Associated Press, AUTHOR: ]
Representatives for news organizations who plan to cover 2016's convention are protesting a move by the Republican National Committee to charge news media organizations a $150 access fee for seats on the press stand. Seats on risers constructed for newspapers, magazines, wire services and online print publications have been awarded without charge in the past. Representatives for daily and periodical press galleries in the Capitol protested Oct 19 that the media "should not be charged to cover elected officials at an event of enormous interest to the public." The four-day event will be held in Cleveland's (OH) Quicken Loans Arena. "We are concerned that the proposed fee smacks of forcing the press to pay for news gathering," said Heather Rothman, chairwoman of the Executive Committee of Periodical Correspondents, and Jonathan Salant, chairman of the Standing Committee of Correspondents. "We urge the (GOP convention committee) to follow the precedent of previous conventions of both parties and drop plans for an access fee so the press can continue to inform the public about a major news event." The RNC says the $150 charge covers a fraction of the $750-per-seat construction cost. In addition to the precedent, the fee could prove burdensome to smaller news organizations. Television networks generally cover the cost of constructing their skyboxes. "There is no access fee," said RNC spokeswoman Alison Moore. "For outlets who prefer a special work station, there will be a minimal charge for construction at a fraction of the actual cost."
benton.org/headlines/republicans-charge-media-cover-2016-convention | Associated Press
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COMPANY NEWS

GOOGLE-YAHOO
[SOURCE: San Jose Mercury News, AUTHOR: Matt O’Brien]
Yahoo has partnered with Google in an advertising pact. The three-year deal means Google will help power Yahoo's search engine and provide it with advertisements. Google will pay Yahoo a percentage of revenue from ads, and Yahoo will pay Google for requests for word or image search results. Yahoo, which is already partnered with the third of the top three search engines -- Microsoft's Bing -- said the new Google deal gives Yahoo "additional flexibility to choose among suppliers of search results and ads." Having three different search engines at its disposal "really improves search," Yahoo CEO Marissa Mayer said, providing the company "greater stability as well as choice and a better user experience." Yahoo has discretion to select which search queries to send to Google and will not have to send a minimum number.
benton.org/headlines/google-and-yahoo-sign-search-partnership | San Jose Mercury News | FT
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Analysis

October 2015

The White House Releases New Strategy for American Innovation, Announces Areas of Opportunity from Self-Driving Cars to Smart Cities

Hillary Clinton and Net Neutrality: Being pro-business doesn’t mean hanging consumers out to dry

FCC to Publish Consumer Complaint Details to Deter Robocalls

LEAP Broadband Library Program Targets Five States

Facebook's latest diversity strategy? Talking to moms and dads

What Really Sank Safe Harbor?

Federal CIO Wants New Policy for Refreshing Aging Federal IT Systems

The Timothy McVeigh case and its impact on media law

USA Fiber Exec Explains Dark Fiber Peering

October 21, 2015 (Happy Back to the Future Day)