March 30, 2011 (Could AT&T Merger Be Inevitable?)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, MARCH 30, 2011
Busy agenda today http://benton.org/calendar/2011-03-30/ -- a preview follows below
TODAY'S AGENDA
Republicans to grill FCC chief on Google 'Wi-Spy' probe
Public Safety Alliance Pleads For Safety Spectrum Set-Aside
AT&T|T-MOBILE
Could AT&T Merger Be Inevitable?
As Regulators Weigh AT&T Bid, a Look at Wireless Markets Abroad
The Case Against AT&T&T
AT&T Deal Troubles States
AT&T’s T-Mobile Bid Draws New York Attorney General Review
Benton Foundation Opposes Proposed AT&T Acquisition of T-Mobile USA
What's the use of antitrust law if Obama allows AT&T|T-Mobile deal?
American Community Television Calls For PEG Commitments In AT&T/T-Mobile
Consumers may be losers in an AT&T merger with T-Mobile
CEOs Tap Record Cash for Payouts as M&A at Post-Lehman High
MORE ON WIRELESS/SPECTRUM
How Commissioner Baker Can Solve Chairman Genachowski's Spectrum Politics Dilemma
Smartphone Market Expected to Soar in 2011
The LightSquared enigma
INTERNET/BROADBAND
Netflix gets friendly with consumer groups for lobby support
Broadband bill passes North Carolina House
Minnesota fiber networks on the rise -- and telcos continue to fight them
Cox Business: Local cable infrastructure helped win bid to build OSHEAN broadband stimulus project
Israeli firm gets OK for Houston WiFi service
Bell Canada backtracks on plan for Internet usage billing
TELECOM/UNIVERSAL SERVICE
FCC Requests Data Related to Universal Service and Intercarrier Compensation Reform
FairPoint to put $7 million it owes Vermont in penalties toward expanding broadband
CONTENT
Music In The Cloud: What's In Store For Consumers?
Nearly 50% of tweets consumed are from tiny fraction of Twitter users
Film industry lauds Web crackdown on violators of federal copyright law
UK questions EU online privacy plan
EMERGENCY COMMUNICATIONS
FCC's Clyburn: Funding needed for Next Generation 911
TELEVISION
White House Gives In to Networks on Matter of National Importance
Top Fox News Executive Admits Lying On-Air About Candidate Obama
Among Media, TV Is Still on Top
UK Minister Hunt is ‘Confident’ BSkyB Plan Strengthens Media Plurality
HEALTH
Major 'digital divide' seen in personal health record use
EDUCATION
New online-learning rule could have worst impact on small states
It's a Family Affair
TAXES
San Francisco considers variety of tech company tax breaks
MORE ONLINE
Hiring is hot again for tech sector
Sunlight tells Congress to save transparency sites
Tribune creditors propose revised bankruptcy plan
Overseas Events Continue to Dominate the News
TODAY'S AGENDA
WED HEARING AGENDA
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Federal Communications Commission Chairman Julius Genachowski will face tough questions about his investigation into a privacy breach by Google during a House hearing on March 30, according to a House aide. The aide said Rep Tom Graves (R-GA) is expected to question Chairman Genachowski on an apparently-lagging FCC probe into the infamous Google Wi-Fi data breach. The FCC probe was announced to great fanfare in November but has yet to produce any publicly available results. Chairman Genachowski, who is testifying on the FCC budget, is also expected to take questions on whether the government should fund the implementation of network neutrality rules. Republicans say the agency overstepped its authority when it passed the controversial rules last year.
benton.org/node/54262 | Hill, The
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PLEA FOR SAFETY SPECTRUM SET-ASIDE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Public Safety Alliance will be on Capitol Hill Wednesday testifying in support of a bill (HR 607) that would authorize paying broadcasters to give up spectrum as a way to free it up for auctions that would, in turn, help pay for a national interoperable broadband network. The hearing, "Public Safety Communications: Are the needs of our First Responders being met?" is in the House Homeland Security Committee, and the alliance's answer will be: Not until you create this network, which some have been pushing for since not long after 9/11, almost a decade ago. Members of the Association of Public-Safety Communications Officials, National Sheriffs' Association and the International Association of Fire Chiefs will together "implore" Congress to pass the bill, and do so before the Sept. 11 10-year anniversary of the attacks.
benton.org/node/54254 | Broadcasting&Cable
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AT&T|T-MOBILE
COULD DEAL BE INEVITABLE?
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
Investment research firm Stifel Nicolaus said in a research note that "an air of inevitability" appears to have settled in Washington and on Wall Street over the proposed merger of AT&T and T-Mobile USA. "Public-interest and consumer groups criticized the deal, and Sprint said it should be blocked, but initial congressional responses were generally muted, with calls for 'close scrutiny,' which has become something of code for a protracted government review concluding in approval with a set of conditions that the merging companies carry triumphantly to investors," the firm said. However, Stifel Nicolaus cautioned that this inevitability does not extend to antitrust officials' review of the deal. "There is a material risk that the government will block the deal or seek conditions so substantial that AT&T walks away," it said.
benton.org/node/54280 | National Journal
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GLOBAL WIRELESS MARKETS
[SOURCE: New York Times, AUTHOR: Jenna Wortham, Kevin O'Brien]
While cellphone customers in the United States tend to pay more every month than consumers in other developed countries, they get more for their money in terms of voice and data use. For example, Americans pay an average of 4 cents for a minute of talk time, while Canadians and the British pay more than twice that, according to recent data from Merrill Lynch and Bank of America. In Japan, where the top three wireless carriers control 97 percent of the market, locals pay 22 cents a minute. The question for regulators in Washington is how AT&T’s $39 billion bid to buy T-Mobile might change that. Analysts and industry experts worry that the deal could hurt consumers, in particular by eliminating T-Mobile’s low-cost phone plans. Some are urging regulators to block the acquisition, which would leave two major companies, AT&T and Verizon, with nearly 80 percent of the wireless market, followed by the much smaller Sprint. AT&T has said the merger will benefit consumers, in part by improving network quality and reach. As they consider the deal, regulators may look abroad to see how competition affects wireless markets. With only three major network operators, the market in the United States would function similarly to some European markets, like France, which also has three operators, said J. Scott Marcus, the former chief technology officer at the telecommunications company GTE and former Internet policy adviser at the Federal Communications Commission. Of course, using other countries as a guide to how consolidation may play out is tricky, because every market is shaped by local cultural and business factors.
benton.org/node/54278 | New York Times
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THE CASE AGAINST AT&T&T
[SOURCE: Public Knowledge, AUTHOR: Gig Sohn]
[Commentary] The communications world was rocked last week when AT&T, the 2nd largest national wireless carrier announced that it was buying T-Mobile, the fourth (out of four) largest national wireless carrier for $39 Billion. If the merger is approved, the combined entity would serve anywhere between 42-44% of all wireless subscribers, and together, AT&T&T and Verizon would control nearly 80% of all subscribers, with a weakened Sprint far behind. So much for the wonderfully competitive wireless market that is the mantra of every debate on network neutrality and broadband deployment! As others have said, there are no winners in this merger other than AT&T and to a lesser extent, T-Mobile. And the biggest loser of all is you, the consumer, because you will be faced with fewer choices, likely higher prices and less innovation. T-Mobile, a feisty competitor that is known for its low prices, unlimited bandwidth and relative openness to new applications and services will be swallowed by AT&T, a company that is famous for high prices, low bandwidth caps and a history of blocking innovative applications (Skype, Sling and Google, to name just three).
benton.org/node/54203 | Public Knowledge
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NEW YORK REVIEW OF AT&T
[SOURCE: Bloomberg, AUTHOR: Karen Freifeld]
AT&T Inc.’s proposed $39 billion purchase of T-Mobile USA will undergo a “thorough review” by New York Attorney Eric Schneiderman for possible anti-competitive impact in the state. “Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future,” AG Schneiderman said. “We want to ensure all New Yorkers benefit from these important innovations that improve lives.” AG Schneiderman said the potential impact of the merger may be greater in places such as Rochester, Albany, Buffalo and Syracuse, where there are fewer wireless options than in New York City. He said he’s also concerned about the impact on consumers who have T-Mobile as a “low-cost option."
benton.org/node/54215 | Bloomberg
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ACM CALLS FOR PEG COMMITMENTS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
American Community Television (ACT) has called for a commitment to public, educational and government (PEG) channels as part of any AT&T/T-Mobile merger. The group pointed to Comcast's "willingness" to make PEG access commitments in securing Federal Communications Commission approval of its deal to join up with NBCU, and wants the AT&T/T-Mobile meld to include PEG provisions on AT&T's U-Verse video service. Comcast pledged not to move PEG channels to digital until a community was ready or its system went all-digital, and to "safeguard the continued accessibility and signal quality of PEG channels on its cable television systems and introduce new on demand and online platforms for PEG content." ACT has complained that the channels on U-Verse, which is already digital and so has no migration issues, are hard to find and suffer from bad transmission quality. They also complain that AT&T charges communities for the cost of transmission, pointing to a March 2008 video they said illustrated the problems.
benton.org/node/54256 | Broadcasting&Cable
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MORE ON WIRELESS/SPECTRUM
BAKER AND SPECTRUM
[SOURCE: Public Knowledge, AUTHOR: Harold Feld]
[Commentary] Federal Communications Commission Chairman Julius Genachowski has a spectrum politics problem . On the one hand, he learned from last year’s D Block battle that he needs to stay aggressively on message to sell his spectrum reforms. His every speech on spectrum therefore reads like a campaign speech for incentive auctions. ‘We have a looming spectrum crisis, we need bold action, Congress must act now to pass incentive auctions.’ But, as Genachowski has discovered, this approach can have unintended consequences. Recently, Commissioner Robert McDowell reported that this focus on incentive auctions created uncertainty in Silicon Valley over the FCC’s commitment to the TV white spaces (TVWS). This follows earlier concerns from Senator Snowe (R-ME) and others that the Chairman’s exclusive public focus on incentive auctions invariably means giving short shrift to other, equally important spectrum reforms identified in the National Broadband Plan. Chairman Genachowski moved quickly to reaffirm that support for TVWS remains strong and that TVWS is a big part of the FCC’s spectrum for broadband initiative. Further, the inclusion of several spectrum items for the next open FCC meeting shows that Genachowski remains committed to broad spectrum reform. But these incidents underscore Genachowski’s difficult dilemma. How can he campaign to push through incentive auctions on the one hand, while making sure that other aspects of the spectrum reform agenda receive the prominence and attention they need to move forward? The fact that anyone could doubt the FCC’s continuing commitment to developing the TVWS despite its broad bipartisan support and support from the Obama Administration spectrum team underscores how little it takes to undermine confidence even in reforms already accomplished. Commissioner Meredith Baker may hold the solution to Chairman Genachowski’s spectrum politics dilemma.
benton.org/node/54202 | Public Knowledge
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INTERNET/BROADBAND
NETFLIX AND FRIENDS
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Netflix is cozying up to some of the city’s leading consumer advocacy groups as it builds up its lobbying presence in Washington. The fast-growing media company, which hired its first in-house lobbyist earlier this year and has seen its share value go through the roof, is trying to build partnerships with telecom reform gurus in the advocacy world. Among other issues, Netflix and consumer groups — including Free Press, the Media Access Project, Public Knowledge and Consumers Union — have a common interest in fighting overage fees on Internet users who access a high volume of data. Data limits could strain Netflix’s business model, which increasingly is built on video streamed over Internet lines, not mailed as DVDs in the company’s signature red-and-white envelopes. Public-interest groups say data caps could stifle innovation and throw a wet towel on broadband growth.
benton.org/node/54222 | Hill, The
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NC BROADBAND BILL ADVANCES
[SOURCE: WRAL, AUTHOR: Laura Leslie]
North Carolina House lawmakers have given final approval to a measure that would make it much more difficult for municipalities to set up their own broadband service even when telecom companies refuse to serve them. H129, the “Level Playing Field” bill, is backed by Time-Warner, CenturyLink, and other telecoms who say cities have unfair advantages in competing with commercial interests. Bill sponsor Marilyn Avila (R-Wake) says businesses need protection from “predatory” local governments. “We have to have some sort of framework that everybody understands when you go into this. This bill is going to establish those rules.” The measure would not apply to systems currently operating in Salisbury, Wilson, Mooresville/Iredell, and Morganton. But it would restrict cities who might consider offering similar services.
benton.org/node/54190 | WRAL
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MINNESOTA MUNICIPAL NETWORKS
[SOURCE: Connected Planet, AUTHOR: Joan Engebretson]
Few telecom topics today can generate more heated debate than municipal fiber networks, as a report by Minnesota Public Radio last week illustrates. The story highlights municipal projects in the state, including two that are up and running (WindomNet in Windom and FiberNet in Monticello), as well as several that are still emerging, including one in Lac qui Parle county, one in Sibley county and one in Lake county. Some say the long-term viability of these networks is uncertain. Others say they’re the only way to bring broadband to remote rural areas. But moving forward, two things are certain. We’re going to see more of these projects, now that a substantial number of them have won broadband stimulus funding. And established telcos will fight as hard as ever against them -- sometimes in the marketplace (as TDS Telecom did when it built a network in Monticello to compete with FiberNet) but more often on the public relations and policy fronts.
benton.org/node/54191 | Connected Planet
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BCE BACKTRACKS
[SOURCE: Globe and Mail, AUTHOR: Ian Marlow]
Bell Canada (BCE Inc) has withdrawn a controversial proposal to increase the cost of Internet services after intense public outrage attracted political attention and a new regulatory hearing. The question now is whether Bell’s move will be enough to quell the public and political anger sparked by the plan. In its original proposal, Bell asked the federal communications regulator to let it charge small Internet service providers, which lease space on its network, by the amount of data each of their customers downloads. Instead, Bell is suggesting an aggregated volume pricing scheme, whereby smaller ISPs are charged for the data used by all their customers, instead of being charged for each customer who goes over set limits. For consumers on the unlimited plans of wholesale Internet providers, Bell’s capitulation means that the huge price increases and onerous download caps many feared will not be implemented, at least for now. The issue will again be debated at regulatory hearings in July.
benton.org/node/54195 | Globe and Mail
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TELECOM/UNIVERSAL SERVICE
FCC REQUEST DATA
[SOURCE: Federal Communications Commission, AUTHOR: Sharon Gillett]
The Federal Communications Commission has sent a letter to the National Exchange Carrier Association requesting certain basic data related to universal service and intercarrier compensation. NECA, created by the FCC as the national administrator of pooled interstate exchange carrier revenues, is uniquely situated to provide the Commission with key data to evaluate proposed universal service and intercarrier compensation reforms. The FCC is requesting six categories of data:
Interstate switched access revenues, expenses, and minutes of use, reported annually for the period from 2008 to 2010 and broken out by carrier, by study area, by rate element, and by originating and terminating access.
Stratification of residential line counts by monthly local retail rate for year end 2010, by carrier.
Intrastate switched access revenues, expenses, and minutes of use, reported annually for the period from 2008 to 2010 and broken out by carrier, by study area, by rate element, and by originating and terminating access.
Reciprocal compensation revenues, expenses, and minutes of use, reported annually for the period from 2008 to 2010 and broken out by carrier by study area and by rate element.
Additional carrier-specific annual data from 2008 to 2010 detailing: local revenue, federal USF revenue, state USF revenue, interstate special access revenue, intrastate special access revenue, NECA settlement revenue, other regulated revenue, total regulated revenue, video revenue, Internet revenue (retail broadband), long distance revenue, other non-regulated revenue, total non-regulated revenue, year end penetration rates for video, Internet, and long-distance services
Data on long-term debt by carrier, broken out by lender, detailing: original amount, original term, interest rate, remaining balance, remaining term, annual interest, and principal payments.
The FCC is asking that NECA provide the data, in the level of granularity and specificity requested, no later than April 6, 2011.
benton.org/node/54258 | Federal Communications Commission
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CONTENT
MUSIC IN THE CLOUD
[SOURCE: National Public Radio, AUTHOR: Joshua Brockman]
Amazon's new Cloud Drive enables consumers to store music remotely in the cloud and access it wherever they go. Here, a look at some of the concerns consumer advocates and analysts have about Amazon's service and the implications for rival services that Apple and Google may have in the works. There's no charge for Amazon's music customers to store up to 5 gigabytes of music in the cloud. Amazon MP3 purchases also won't count against this quota and customers who purchase one MP3 album will receive an additional 20 gigabytes of storage. But for storage beyond this, NPR's analysis found it will cost about $1 per gigabyte. Consumer Reports notes that it still isn't clear whether Amazon will encounter opposition from music labels, which have "traditionally fought new business models that utilize music from their artists without compensation." The downside to using any one company's service is that if you later change your mind later about the devices you want to own, it may be harder than you think to switch gears and you may have to upload your content again.
paidContent.org notes that Amazon has launched its new online music locker and streamer without any licenses from the labels whose material it will store and distribute, the labels’ umbrella group IFPI tells paidContent. Not a problem, replies Amazon -- licenses aren't necessary for its new Cloud Drive. That could open the retailer to legal complaints from those labels, one of which, EMI, has previously sued a similar-sounding service, MP3.com founder Michael Robertson’s web-based music lockers MP3Tunes and Sideload.com. But Amazon resists any suggestion that it needs licenses for storage. The company says: “We do not need a license to store music in Cloud Drive. The functionality of saving MP3s to Cloud Drive is the same as if a customer were to save their music to an external hard drive or even iTunes.”
benton.org/node/54245 | National Public Radio | paidContent.org
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EMERGENCY COMMUNICATIONS
MONEY FOR NG911
[SOURCE: Federal Communications Commission, AUTHOR: FCC Commissioner Mignon Clyburn]
Federal Communications Commission member Mignon Clyburn spoke at the National Emergency Number Association's 9-1-1 Comes to Washington Conference on March 29. She said NENA's leadership will be vital in the implementation of the New and Emerging Technologies 9-1-1 Improvement Act of 2008. The goal of this federal statute is straightforward. We should migrate our current 9-1-1 networks to a national IP-enabled emergency network that can receive and respond to all citizen-activated emergency communications. She identified a number of challenges to migrating our 9-1-1 networks to a national IP-enabled emergency network:
the current 9-1-1 system was never designed to receive calls and data from these new and emerging technologies and very few 9-1-1 call centers have the technical capability to receive texts, photos, videos, and other data;
many 9-1-1 call centers do not even have access to broadband, which makes it difficult to receive large volumes of data; and
since Congress wants this to be a national network, NG9-1-1 rolled out in a uniform, systematic way.
To meet these challenges, she said, we need money: "Absent appropriate action by, and funding for, States, Tribes, and local jurisdictions, there can be no effective 9-1-1 service."
benton.org/node/54260 | Federal Communications Commission
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TELEVISION
WH GIVES IN TO NETWORKS
[SOURCE: MediaPost, AUTHOR: David Goetzl]
[Commentary] Where have you gone Walter Cronkite? Time was, the White House would request networks give it a prime-time spot for a Presidential address -- perhaps on a topic as critical as, say, launching missiles in a distant land to fight a dictator versed in terrorism and prevent genocide. Those requests were largely pro forma. ABC, CBS and NBC would say yes, no problem. The trio could use the speech to provide exposure for their news operations. Maybe they also felt that, since they were on the public airwaves, providing the President with a chance to reach the most people was good public service. No longer. Even a President promising to answer questions about a military initiative with an unclear national interest isn't considered a bankable star. It’s not a sure bet a network will alter its schedule for the Commander in Chief and his commercial-free programming. And the White House seems willing to play along. The latest example came Monday with the President’s Libyan speech. ABC wasn't exactly thrilled at the prospect of having to preempt “Dancing with the Stars,” while the other networks weren't keen on schedule changes either. The White House apparently understood and negotiations with the networks resulted in the speech airing at 7:30 p.m., according to the New York Times. And as it turned out, networks actually gave up no air time for the address, instead nudging its affiliates to give up the ad revenue.
benton.org/node/54252 | MediaPost
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FOX NEWS CREDIBILITY
[SOURCE: Media Matters for America, AUTHOR: Eric Hananoki]
In newly uncovered audio, a Fox News executive boasts that he lied repeatedly during the closing days of the 2008 presidential campaign when he speculated on-air "about whether Barack Obama really advocated socialism." Speaking in 2009 onboard a pricey Mediterranean cruise sponsored by a right-wing college, Fox Washington managing editor Bill Sammon described his attempts the previous year to link Obama to "socialism" as "mischievous speculation." Sammon, who is also a Fox News vice president, acknowledged that "privately" he had believed that the socialism allegation was "rather far-fetched." Sammon's "mischief" wasn't limited to his on-air appearances. As Media Matters reported, Sammon also pushed Fox News colleagues to play the socialism card. On October 27, 2008, Sammon sent an email to staffers highlighting what he described as "Obama's references to socialism, liberalism, Marxism and Marxists" in his 1995 autobiography Dreams From My Father. Shortly after sending the email, Sammon appeared on two Fox News programs to discuss his research and also wrote a FoxNews.com piece about Obama's "affinity to Marxists." On October 14, 2008, Sammon said that Obama's "spread the wealth around" remark "is red meat when you're talking to conservatives and you start talking about 'spread the wealth around.' That is tantamount to socialism."
In an interview, Sammon says his reference to "mischievous speculation" was "my probably inartful way of saying, 'Can you believe how far this thing has come?'" The socialism question indeed "struck me as a far-fetched idea" in 2008. "I considered it kind of a remarkable notion that we would even be having the conversation." He doesn't regret repeatedly raising it on the air because, Sammon says, "it was a main point of discussion on all the channels, in all the media"--and by 2009 he was "astonished by how the needle had moved." Sammon notes that in the same talk on the cruise, he pointed out that George W. Bush had his own stimulus package and had spent half the TARP bailout money: "I was talking about both sides being big spenders." (True; he also told the cruise guests that "when it comes to spending money, Obama makes Bush look like a piker.")
benton.org/node/54250 | Media Matters for America | The Daily Beast | WashPost
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HEALTH
PHR DIGITAL DIVIDE
[SOURCE: ModernHealthcare.com, AUTHOR: Maureen McKinney]
Racial and ethnic minority patients are far less likely than whites to adopt an online personal health record to access and coordinate their health information, according to a study published in the March 28 issue of the Archives of Internal Medicine. The study is the latest of many to point to a "digital divide," the term used to describe the disparity in access to the Internet and other forms of technology. Researchers examined the PHR adoption patterns of more than 75,000 patients at Partners HealthCare, Boston, during a 33-month period. They determined that blacks and Hispanics were half as likely as whites to adopt a PHR. They also found that high-income patients were 14% more likely to adopt a PHR than their low-income counterparts. Despite those gaps, once minority and low-income patients adopted PHRs, they used them at close to the same or the same rate as other groups, according to the study.
benton.org/node/54193 | ModernHealthcare.com
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TAXES
SF TAX BREAKS
[SOURCE: San Francisco Chronicle, AUTHOR: Rachel Gordon]
San Francisco supervisors hope to move quickly to eliminate or modify a unique payroll tax on employee stock options to keep technology companies from fleeing the city. One plan, crafted by Supervisor Ross Mirkarimi, calls for a two-year moratorium on taxing the stock options "with the express purpose of stopping any hemorrhaging of companies who are on the cusp of leaving," he said. The temporary tax break would apply to technology companies that are located anywhere in San Francisco, have 100 employees or more and are not traded on a public stock exchange. His proposal and ideas crafted by Supervisors Mark Farrell and David Chiu are expected to be introduced today. The reforms are focused on the highly valued tech companies that face the largest tax burden if they go public. Several tech companies, including Twitter, Zynga and Yelp, have told city officials that San Francisco's tax code may make it financially unfeasible for them to stay in the city. San Francisco is the only city in California that taxes stock options, bundling the provision in the city's payroll tax, which also includes salaries, wages, bonuses and other forms of compensation. The 1.5 percent business tax is imposed on businesses with payrolls above $250,000.
benton.org/node/54225 | San Francisco Chronicle
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