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April 2016

The San Bernardino case is already changing Apple’s arguments over another locked iPhone

Apple on argued that the government has “utterly failed” to show that the tech giant is the only party that can crack a drug dealer’s locked iPhone in a closely watched legal battle in Brooklyn.

In a new filing, Apple invoked the Justice Department’s handling of the high-profile San Bernardino case, in which prosecutors initially insisted that only Apple could help the FBI access a phone used by one of the shooters. Then on the eve of oral arguments last month, prosecutors abruptly announced that an “outside party” had shown the bureau a possible method to unlock the phone. In the Brooklyn case, prosecutors have similarly asserted that Apple is the “only entity” that can pull data from the iPhone, the firm’s lawyers said in their brief. But the tech firm said “the government has failed to demonstrate it has conducted an ‘exhaustive search’ for alternative option.”

The digital Gilded Age: DC faces Silicon Valley's riches – and ever-growing power

The late 19th century was a period known as “the Gilded Age” in America. As the railroads, mining industries and factories boomed, millions of workers were inspired to migrate from Europe, yet the wealth became concentrated among a small set of industrialists such as Andrew Carnegie, a steel magnate, and the oil baron John D Rockefeller. These men wielded massive power through business, political efforts and philanthropy. Yet even Carnegie, whose ruthlessness earned him a reputation as a “robber baron”, would have been amazed by the power the heads of technology firms wield today, according to the Carnegie biographer David Nasaw.

“Carnegie could never have imagined the kind of power Zuckerberg has,” said Nasaw, a history professor at City University of New York. “Politics today is less relevant than it has ever been in our entire history. These CEOs are more powerful than they’ve ever been. The driving force of social change today is no longer government at all.” Tech CEOs have spent 2016 wading into politics when it suits their own ends, and even going head-to-head with the US government.

CURB Your Enthusiasm: House Considers Capping Lifeline Program and Passes Ban on Broadband Rate Regulation

Two important communication bills are winding their way through the House: On April 13, the House Communications Subcommittee held a hearing on seven (seven!) communications bills. One of those bills, the Controlling the Unchecked and Reckless Ballooning of the Lifeline Fund Act (CURB Lifeline) (HR 4884) seeks to impose a hard budget cap on the Lifeline program. Separately, the full House this week considered the No Rate Regulation of Broadband Internet Access Act (HR 2666), which would prevent the Federal Communications Commission from imposing rate regulations on broadband service. But some fear the bill would go far beyond blocking telephone-style rate regulations, gutting the FCC’s authority to enforce its Open Internet rules.

Attorney General Lynch Announces Renata B. Hesse to Serve as Head of Antitrust Division

Attorney General Loretta E. Lynch announced that Principal Deputy Assistant Attorney General Renata B. Hesse of the Antitrust Division will assume leadership of the Division. Hesse succeeds Bill Baer, who became the Acting Associate Attorney General. Before her selection to run the Antitrust Division, Hesse served as the Deputy Assistant Attorney General for Criminal and Civil Operations in the division for almost four years. During this time, she also served as the division’s Acting Assistant Attorney General immediately prior to Baer’s confirmation.

Hesse was a career trial attorney in the division between 1997 and 2006, in the last four years of which she served as the Chief of the Networks and Technology Section. Hesse has also served as a senior counsel to the Chairman of the Federal Communications Commission, where she was responsible for overseeing the FCC’s review of AT&T’s proposed acquisition of T-Mobile, and was a partner at Wilson Sonsini Goodrich & Rosati. Hesse received her JD from the University of California, Berkeley School of Law and her B.A. from Wellesley College.

Will Cheap Broadband Actually Make It to Rural America? Here's How It Might Happen

In Marty Newell’s part of eastern Kentucky, the only internet connection available is sluggish: a 12-megabytes-per-second download and a laughable 1 mbps-upload rate. Newell, coordinator of the Rural Broadband Policy Group, an Internet access advocacy organization, says he’s hopeful about the future after the Federal Communications Commission’s expansion of its Lifeline program to require affordable access to the Internet through phones and portable Wi-Fi hotspot devices. “If kids can go home and use a tethered mobile device to connect tablets to school, they are miles ahead,” Newell said. “I think that’s one of the most promising features of this expansion.”

The problem is far more pervasive among rural communities, where 53 percent of residents living in these areas lack basic broadband speeds. It’s not necessarily the case that those 22 million people can’t afford broadband — although that is certainly part of the issue — but it’s more so that Internet providers don’t consider the cost of servicing these areas economically profitable. It’s a problem that the FCC knows well: It’s devoted a two-part program called the Connect America Fund and the High Cost program, each of which provide different subsidies to Internet service providers, depending on the carrier. However, Mark Wigfield, deputy director of the FCC’s Office of Media Relations said that since its adoption in 2011, the Connect America Fund is just now starting to pick up steam. But while these two programs address Internet service providers directly, the Lifeline program could have a greater indirect effect.

Wisconsin Broadband Legislation Aims to Cut Through Red Tape

The state of Wisconsin has passed a bill aimed at making it easier for network operators to deploy broadband, which Gov Scott Walker (R-WI) signed late in March. The Wisconsin broadband legislation, which was spearheaded by the Wisconsin State Telecommunications Association (WSTA), lays out requirements that “political subdivisions” such as cities, towns and counties must meet in order to obtain a “Broadband Forward!” designation. The subdivisions are required to adopt ordinances spelling out those requirements. The Wisconsin broadband legislation includes the following requirements for communities to obtain the Broadband Forward! designation:

  • Imposing permit fees of no more than $100 for network operators and prohibiting additional fees
  • Prohibiting moratoriums on applications, permits or cable installation
  • Requiring communities to inform network operators within 10 days if an application is incomplete and to provide an explanation of why it is incomplete. If this notification is not provided, the application is considered to be approved
  • If an application is denied, the community must provide evidence that the decision is not arbitrary or capricious

The Wisconsin “Broadband Forward!” news illustrates two important trends in the broadband business: heightened awareness of the importance of cutting through red tape to spur broadband deployment and the creation of catchy phrases to call attention to broadband preparedness.

The digital pressures weighing on telecoms

Digitization is profoundly changing the competitive boundaries of the telecommunications industry. Core voice and messaging businesses have continued to shrink, in part because of regulatory pressures, but also because social media has opened new communications channels beyond traditional voice service. Today, companies face another wave of change, from new digital devices and more robust models for delivering telecom services—a point confirmed by a recent survey of 254 executives from companies representing more than a third of global revenues in telecommunications, media, and technology.

We asked the respondents about three areas of industry disruption: new consumer touchpoints created by devices based on Internet of Things technologies, over-the-top (OTT) business models that disintermediate existing communications platforms and services, and the potential of these changes to commoditize the incumbents’ brand positions (exhibit). A lot is up for grabs as the boundaries between telecommunications and information technology continue to blur. Our survey suggests that industry leaders are well attuned to the far-reaching implications of these shifts. How to counter—or, better yet, surpass—the attackers is a bigger challenge.

Broadcast TV's Future Is In Chairman Wheeler's Hands

[Commentary] Now that the National Association of Broadcasters has asked the Federal Communications Commission to authorize the use of next-gen TV transmission standard ATSC 3.0 on a voluntary basis, FCC Chairman Tom Wheeler has a chance to create a wonderful legacy for himself. If he moves to quickly approve the request, he could say that on his watch, he not only found new spectrum for wireless broadband through the incentive auction, but also put broadcasting on a new course that will insure the availability of free, universal over-the-air television for years to come.

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