February 2016

LIFELINE/UNIVERSAL SERVICE
BIPARTISAN SOLUTIONS FOR UNIVERSAL SERVICE
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairman Tom Wheeler]
The week of Feb 15, I circulated an Order to modernize universal support for rate-of-return carriers. The item now on the floor is the result of months of arduous efforts by Commissioners O’Rielly and Clyburn and their staffs. All three of us agreed on two principles: the need for reform in the program to assure the funds went to the delivery of service, and a focus on maintaining existing service and bringing broadband to unserved areas. All three of us had different ideas about how to achieve those goals. None of us got all we wanted in this item, but the public will get what it needs: broadband to rural areas and program reform. The proposed Order sets forth a package of reforms to address rate-of-return issues that are fundamentally intertwined—the need to modernize the program to provide support for stand-alone broadband service; the need to improve incentives for broadband investment to connect unserved rural Americans; and the need to strengthen the rate-of-return system to provide certainty and stability for years to come. The proposed Order would create an entirely voluntary path for rate-of-return carriers that prefer the predictability of defined support amounts over a ten-year term. Similar to the approach that has successfully spurred deployment by larger “price-cap” carriers, this model-based support comes with defined milestones for efficient, accountable deployment. This model-based option has been actively sought by some rate-of-return carriers, and reflects significant updates and carrier-submitted data from the rate-of-return community. For carriers who choose to continue receiving support based on traditional rate-of-return principles, the proposed Order would provide more certainty for carriers, increase fiscally responsible management of the fund, and ensure that a reasonable portion of support is spent on new buildout to connect those that remain unserved. To better meet the needs of consumers, for the first time, we would provide support for stand-alone broadband without a voice service subscription, building on the framework of our longstanding rules.
Joan Engebretson for telecompetitor noted that, "Surprisingly, [Chairman] Wheeler’s post does not mention the words “Connect America Fund” – although virtually all other FCC discussion about reforming the Universal Service program has referenced transitioning that program to a broadband-focused Connect America Fund. Perhaps this was just an oversight and not a deliberate choice on the chairman’s part." She continued, "[Chairman]Wheeler’s post also sidesteps another controversial issue- whether or not the order calls for the CAF program to continue to have a program focused on wireless service, as the current USF program does. [Commissioner] O’Rielly previously warned carriers to not to expect a wireless program, but [Commissioenr] Clyburn recently expressed a different point of view. At the January FCC meeting she argued that rural Americans need both fixed and mobile broadband."
benton.org/headlines/bipartisan-solutions-universal-service | Federal Communications Commission | telecompetitor
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DON’T LET FCC CUT OFF OKLAHOMA LIFELINE
[SOURCE: Indian Country Today, AUTHOR: Loris Taylor, Matthew Rantanen, Susan Feller]
[Commentary] In a February 2, 2016 press release, Federal Communications Commissioner Ajit Pai called the continuation of Tribal Lifeline subsidies in Oklahoma a “legal scandal” and a “bloated tax payer subsidy.” The Universal Service Fund is not tax based, but rather a federal subsidy program based on fees and designed to make services affordable to impoverished families. Enhanced Tribal Lifeline subsidies are designed to help those living on Tribal lands afford basic telephone service. At issue is the map used to determine “tribal lands.” Pai’s objections are based upon the fact that the FCC will, at least for a short period of time, continue to use a map that includes lands that were historically occupied by Native Americans. Pai’s knee-jerk statement implies that Tribes are somehow the culpable recipients of undeserved benefits. Pai's statements also suggest a misunderstanding of how the Lifeline program actually operates to assist all low-income families on Tribal lands, not just Tribal families. Rather than acknowledge that the key reason for continuing use of the historic map is simply to enable the FCC to consult with Oklahoma Tribes before unilaterally eliminating important Tribal subsidies, Pai simply ignores the complex historical relationship between the federal government and Native Nations. The real scandal is not the continuation of certain benefits to those who live on Tribal lands, but Pai’s suggestion that the FCC should not have engaged in government-to-government consultations with Oklahoma Tribal Nations before unilaterally eliminating important legal rights.
[Loris Taylor is the resident and CEO of Native Public Media; Matthew Rantanen is the director of technology for Southern California Tribal Digital Village; and Susan Feller is the executive director of the Association of Tribal Archives, Libraries and Museums]
benton.org/headlines/dont-let-fcc-cut-oklahoma-lifeline | Indian Country Today
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BRIDGING A DIGITAL DIVIDE THAT KEEPS SCHOOLCHILDREN BEHIND
[SOURCE: New York Times, AUTHOR: Cecilia Kang]
With many educators pushing for students to use resources on the Internet with class work, the federal government is now grappling with a stark disparity in access to technology, between students who have high-speed Internet at home and an estimated five million families who are without it and who are struggling to keep up. The divide is driving action at the federal level. Members of the Federal Communications Commission are expected to vote in March on repurposing a roughly $2 billion-a-year phone subsidy program, known as Lifeline, to include subsidies for broadband services in low-income homes. “This is what I call the homework gap, and it is the cruelest part of the digital divide,” said Commissioner Jessica Rosenworcel, a Democratic member of the FCC who has pushed to overhaul the Lifeline program. The Lifeline plan has drawn strong criticism from the two Republicans among the five FCC commissioners, and from some lawmakers, who say the program, which was introduced in 1985 to bring phone services to low-income families, has been wasteful and was abused. In 2008, when the commission added subsidies for mobile-phone services to discounts for landlines, some homes started double-billing the program, and the budget for the fund ballooned. Various investigations, including a government review in early 2015, questioned the effectiveness of the phone program and whether the commission had done enough to monitor for abuse. But advocacy groups for children and minorities have backed the FCC plan, saying it will be important in preventing students from falling further behind their peers.
benton.org/headlines/bridging-digital-divide-keeps-schoolchildren-behind | New York Times
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DIGITAL LITERACY AND INCLUSION: "WE ARE ALL IN IT TOGETHER"
[SOURCE: Benton Foundation, AUTHOR: Colin Rhinesmith]
All of the organizations I studied for my recent Benton Foundation report recognize that digital literacy, the ability to navigate the Internet, is key to meaningful broadband adoption. But they took different approaches to ensuring their clients have the skills needed to make use of broadband. Computer classes have traditionally been a popular way to provide digital literacy training. More recently, digital inclusion organizations have embraced one-on-one, personalized training approaches for community members in order to be relevant to each person’s everyday life experiences. In addition, several organizations noted that digital literacy is needed and requested by all, regardless of income. Perhaps I should stress one point in particular: these organizations I visited provided digital literacy training to people of all socioeconomic backgrounds. Having a low income is not a requirement for participating in many of the digital literacy training programs that digital inclusion organizations provide. As Susan Corbett of Axiom Education and Training Center explained, “Digital literacy is needed and requested by all, regardless of income. I think this is important as technology has evolved around us and we are all in the same place—the need to learn. This is the message we have tried very hard to convey to communities, business leaders, and the adult learners that we work with. It’s okay to admit that you need help; we are all in this together.”
benton.org/headlines/digital-literacy-and-inclusion-we-are-all-it-together | Benton Foundation
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INTERNET/BROADBAND

INTERNET AFFORDABILITY
[SOURCE: Alliance for Affordable Internet, AUTHOR: ]
Everyone should have access to the Internet. So concluded the 193 member states of the United Nations when they agreed on a new set of Sustainable Development Goals (SDGs) in September 2015. Underscoring the potential of the Internet to contribute to global development and empowerment, SDG target 9c calls for universal and affordable access in the world’s least developed countries by 2020. Reaching this goal will require bold and immediate action. On our current trajectory, A4AI predicts that we’ll only hit this target in 2042 — 22 years after the target date set by the global community. Without urgent reform, in 2020 we will see just 16% of people in the world’s poorest countries, and 53% of the world as a whole, connected. We won’t just miss the target, we’ll miss by a mile. This connectivity lag will undermine global development across the board, contributing to lost opportunities for economic growth. The Affordability Drivers Index (ADI) looks at the policies, incentives, and infrastructure investments in place across 51 developing and emerging countries, and assesses the extent to which they are being implemented. This includes policies which we believe drive progress towards more affordable Internet. Countries that do well on the ADI also tend to have lower broadband prices for their citizens, although the ADI does not measure price directly. Despite falling prices, not one of the 51 countries included in our analysis has met the 5% affordability target for those living in poverty. This is not an issue affecting small numbers of people — 1.9 billion people in the countries covered by the ADI live in poverty.
benton.org/headlines/internet-affordability-report | Alliance for Affordable Internet
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GOOGLE FIBER TO HUNTSVILLE (AL)
[SOURCE: WHNT, AUTHOR: David Kumbroch]
Huntsville (AL) city leaders and Google representatives announced that Google Fiber will bring its service to Huntsville. The announcement ends years of searching for an Internet provider to help the city accomplish Mayor Tommy Battle’s goal of ensuring all citizens have access to gigabit Internet. Huntsville's unique approach to partnership may have sealed the deal. In every other established Google Fiber market, Google owns the fiber network. In Atlanta (GA), Google built out a portion of the infrastructure and shared with a municipal network to expand their reach. In Huntsville, Huntsville Utilities will build out the entire fiber backbone. It will then lease space on the network to Google, who will connect it to individual addresses. Huntsville Utilities already planned on building out a fiber network to monitor their own systems. Now, it'll speed that process up, so they can lease space to Google. Of course, that requires a big spend up front for the utility company. Huntsville Utilities President and CEO Jay Stowe says its current plan is estimated at $57 million. It sees it as a low-risk investment, as compared to administering the gigabit Internet themselves, which would require a massive increase in personnel in an arena where they have limited expertise. Joanne Hovis, president of communications and IT engineering consulting firm CTC Technology & Energy, who advised Huntsville on the project, said, "With today’s news that Huntsville, Alabama will build fiber optics throughout its community, and that Google Fiber will lease much of that fiber in order to provide gigabit services to residences and small businesses, communities throughout the United States have entered into a new era of possibility — that of robust, sustainable broadband public-private partnerships."
benton.org/headlines/google-fiber-huntsville-al | WHNT | Benton Broadband Public-Private Partnerships Report | Google | CTC Technology & Energy | Multichannel News
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GOOGLE-HUNTSVILLE COULD REMAKE MARKET
[SOURCE: Brookings, AUTHOR: Blair Levin]
[Commentary] The announcement that the municipally-owned electric utility in Huntsville (AL) will lease its fiber lines to Google could transform how municipalities provide broadband access. What makes the Huntsville news potentially transformative is that the service provider is Google Fiber. The Huntsville model changes Google’s path to scale as it potentially decentralizes construction efforts to multiple cities. Further, it represents the first effort by a major company to decouple ownership of the fiber network from providing Internet services, potentially forcing both incumbents and other tech companies to rethink their strategies. The model also provides cities a new tool to accelerate the delivery of abundant bandwidth to its residents. One can see a number of forces—cities, construction companies, finance companies—joining forces to construct, and in some places complete, dark fiber networks far faster than Google Fiber has been doing with its current model. The new model also allows a city to address a number of city specific policy objectives, such as enterprise zones and closing the digital divide, along the way. This path resembles how America built out its electric grid; through local, rather than national efforts. Further, the model expands the number of communities that will benefit from the “game of gigs,” in which a Google announcement generates a network upgrade announcement from the incumbent telco and cable company. In short, if Google, or others, offer this opportunity broadly, it provides a win for cities that want new broadband options but without taking on problematic risks, a win in accelerating America achieving affordable, abundant bandwidth, and a win for America’s efforts to lead in the broadband delivered global information economy.
benton.org/headlines/google-fiber-huntsville-deal-could-remake-broadband-market | Brookings
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WHEN COMCAST'S BUSINESS AS USUAL TURNS OUT TO LIMIT MINORITY ACCESS
[SOURCE: Medium, AUTHOR: Susan Crawford]
[Commentary] Late in Jan, CTC Technology & Energy, an independent consulting firm that had been retained by the state of Connecticut, released a report that included some shocking stories about business connectivity in Hartford (CT), the capital of the state. Connecticut has the highest per capita income of all fifty states. Hartford is largely black (38%) and Hispanic (43%). Connecticut as a whole is mostly white (69%). CTC found that high-quality fiber and cable high-speed Internet access services did exist close to the business locations in Hartford that the firm visited. But close doesn’t mean connected. And the businesses CTC talked to said that they’d have to pay sky-high amounts to Comcast to get hooked up — and after that it would cost them enormous monthly fees to have a persistent connection. For all my own inveighing in the past few years against the unconstrained power of Comcast in America, I’ve always said the company is acting rationally — it’s not, itself, evil. Plutocrats are not necessarily prejudiced. But Comcast is a dividend-generating machine, an ATM with lawyers on top, whose reasonable, presumably benevolent actions over time are resulting in grave problems for areas that just “happen” to be non-white. Does motivation excuse consequences? What will America do about the reality that a basic utility — world-class access to the Internet — may be prohibitively expensive for businesses in low-income-area buildings Comcast has chosen not to serve? The answer is cheap, open wholesale fiber networks in every neighborhood and city — facilities that, just like street grids, enable retail competition to thrive.
[Susan Crawford is the John A. Reilly Clinical Professor of Law at Harvard Law School]
benton.org/headlines/when-comcasts-business-usual-turns-out-limit-minority-access | Medium
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WIRELESS/SPECTRUM

SMARTPHONE OWNERSHIP IN EMERGING ECONOMIES
[SOURCE: Pew Research Center, AUTHOR: Jacob Poushter]
In 2013, a median of 45% across 21 emerging and developing countries reported using the Internet at least occasionally or owning a smartphone. In 2015, that figure rose to 54%, with much of that increase coming from large emerging economies such as Malaysia, Brazil and China. By comparison, a median of 87% use the Internet across 11 advanced economies surveyed in 2015, including the US and Canada, major Western European nations, developed Pacific nations (Australia, Japan and South Korea) and Israel. This represents a 33-percentage-point gap compared with emerging and developing nations. For smartphone ownership, the digital divide between less advanced economies and developed economies is 31 points in 2015. But smartphone ownership rates in emerging and developing nations are rising at an extraordinary rate, climbing from a median of 21% in 2013 to 37% in 2015. And overwhelming majorities in almost every nation surveyed report owning some form of mobile device, even if they are not considered “smartphones.” While Internet access has been rising in emerging and developing nations, those worldwide who have Internet access are voracious users. Roughly three-quarters of adult Internet users across the 40 countries surveyed in 2015 say that they use the Internet at least once a day, with majorities in many countries saying that they access the web “several times a day.”
benton.org/headlines/smartphone-ownership-and-internet-usage-continues-climb-emerging-economies | Pew Research Center
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FACEBOOK SEEKS TO EASE TENSIONS WITH TELECOMS WITH CELLULAR-NETWORK PROJECT
[SOURCE: Wall Street Journal, AUTHOR: Sam Schechner, Stu Woo]
Facebook is trying to ease tensions with phone carriers that fear that giant technology firms will overtake their business. Facebook said that it has joined with Intel and Nokia and carriers including Deutsche Telekom AG to share information about designing cellular networks, and to make these blueprints available for anyone to use and improve upon. The stated goal of the Facebook-led initiative, called the Telecom Infra Project, or TIP, is to make it easier and less expensive for telecommunications companies to connect people in places that don’t have cellular service, from urban basements to rural villages. By launching the initiative, Facebook is also trying to send the message that it wants to work with telecommunications firms rather than replace them. Facebook’s move to spearhead progress in mobile networks comes amid ongoing tensions between Silicon Valley and telecom firms. Some of the world’s biggest tech and telecom firms are gathering in Barcelona for the mobile industry’s biggest annual conference.
benton.org/headlines/facebook-seeks-ease-tensions-telecoms-cellular-network-project | Wall Street Journal | The Verge
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SECURITY/PRIVACY

DIGITAL EQUILIBRIUM PROJECT
[SOURCE: Christian Science Monitor, AUTHOR: Jack Detsch]
The Digital Equilibrium Project brings together 15 experts with the aim of finding a framework that protects privacy while also giving law enforcement and intelligence agencies the ability to access the communications of suspected criminals and terrorists. The group says it plans to release guidelines for the government and private sector to cooperate on policies that support both consumer privacy rights and national security needs at the RSA Conference in San Francisco. So far, the group has received input from retired government officials including a former National Security Agency director and Homeland Security secretary as well as senior technology executives and digital privacy advocates.
benton.org/headlines/digital-equilibrium-project-seeks-solve-privacy-v-national-security-debate | Christian Science Monitor
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MEET THE POWERFUL DUO WITH A SENSIBLE ANSWER TO ENCRYPTION
[SOURCE: Morning Consult, AUTHOR: Amir Nasr]
For years, lawmakers have grappled with how to balance individual privacy protections and law enforcement’s need for access to encrypted communications. They haven’t gotten very far. That could change, thanks to a bipartisan partnership forged between House Homeland Security Chairman Michael McCaul (R-TX) and Senate Intelligence Committee member Sen Mark Warner (D-VA). Earlier in 2016, the pair floated an idea for a lengthy but doable way to satisfy both privacy and security concerns. At first blush, their proposal looks like a tame non-answer to the problem. But it may be the only way to bridge the gap between government-wary technophiles and security hawks. Sens McCaul and Warner want to set up a commission made up of members of the tech community, privacy advocates, and the law enforcement and intelligence communities to hash out a solution. That commission would be tasked with review of what law enforcement officials face when they are denied access to encrypted communications, even with a court order. The group would then draft recommendations for what to do about it. It was a sleeper issue that roused attention only with tech geeks. But now it may have new legs. Sources familiar with the proposal say Sens McCaul and Warner have spoken on the phone since the court issued its order to Apple. They are now thinking about how build momentum for their bill, which has yet to be introduced. Sens McCaul and Warner’s staffs have also been in daily contact (often multiple times a day) to work on it. The duo will have an opportunity Feb 24 at an event about encryption at the Washington-based Bipartisan Policy Center where they will discuss the legislation.
benton.org/headlines/meet-powerful-duo-sensible-answer-encryption | Morning Consult
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STORIES FROM ABROAD

EUROPE VS SILICON VALLEY
[SOURCE: Wall Street Journal, AUTHOR: Sam Schechner, Stu Woo]
Major European carriers including Deutsche Telekom AG and Spain’s Telefónica SA are using the telecom industry’s annual conference in Barcelona to step up a campaign to pressure the European Union to repeal some of the extensive regulations governing carriers, or to extend similar rules to Internet-based text-message and voice-call services such as Facebook’s WhatsApp. Top executives from 11 European carriers, including Vodafone Group PLC and Orange SA, are set to meet Feb 25 with the EU’s executive arm to urge for ways to “adapt its policy approach” to areas that include “online platforms” as part of a planned review of telecommunications policy in 2016. The major issue: Telecom firms complain that they do the expensive grunt work of building towers and other infrastructure, while online companies use those networks to offer services like WhatsApp or Google’s Hangouts for free. Telecom firms also argue that they are forced to pay special taxes, offer services at regulated rates and have strict industry-specific limits on how they can use their clients’ information. For instance, telecom executives chafe at privacy rules they contend make it difficult for them to sell location-based advertisements—a profit center for Google and Facebook.
benton.org/headlines/big-european-telecom-companies-are-renewing-their-push-new-rules-would-help-them-better | Wall Street Journal
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February 2016

February 23, 2016 (John Reinhardt)

Internet Affordability Report

Google Fiber Huntsville deal could remake broadband market

Digital Equilibrium Project seeks to solve privacy v. national security debate

Protests are planned across the nation Feb 23 supporting Apple's refusal to unlock the San Bernardino gunman's iPhone

David Lazarus: Car makers had to install air bags; shouldn't Apple have to hack its iPhone?

Bill Gates backs FBI iPhone hack request

Quinn DuPont op-ed: Why Apple isn't acting in the public's interest

William Bratton op-ed: How is not solving a murder, or not finding the message that might stop the next terrorist attack, protecting anyone?

Narrow Focus May Aid F.B.I. in Apple Case