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Three big Congressional hearings -- on mobile privacy, the AT&T/T-Mobile transaction and FCC reform -- would normally been enough to merit the title "busy week" in telecom policy land. But we saw a number of major developments that'll have an impact on telecommunications for a very long time.

On May 12, the Obama Administration unveiled a long-anticipated a cybersecurity legislative proposal, including legislative language and a section-by-section analysis. In its release, the Administration said the proposal helps:

• Safeguard your personal data and enhances your right to know when it has been compromised. In addition to educating you on how to protect yourself from cyber threats with the Stop. Think. Connect. campaign, we believe organizations should inform you when your sensitive personal information may have been compromised. This notice not only helps you to protect yourself against harms like identity theft, but also incentivizes organizations to have better data security in the first place. Today, our country has a patchwork of 47 state notification laws. Our proposal simplifies and strengthens this reporting requirement and reaches all Americans.
• Protect our national security by addressing threats to our power grids, water systems, and other critical infrastructure. These systems are the backbone of our modern economy; many are privately owned, but all merit our support in protecting them. The Administration proposal advances the security of our increasingly “wired” critical infrastructure, strengthens the criminal penalties for hacking into the systems that control these vital resources, and clarifies the ability of companies and the government to voluntarily share information about cybersecurity threats and incidents in a privacy-protective manner. This is behavior we want and need to promote.
• Protect our federal networks, while creating stronger privacy and civil liberties protections that keep pace with technology. Since our Federal systems are under constant pressure by hackers, criminals and other threats, the government needs better tools to detect and prevent those threats. Part of cybersecurity is about finding malicious programs, and stopping their spread before they have any impact. This proposal allows the Department of Homeland Security (DHS) to implement intrusion detection and prevention systems that can help speed our response to these incidents. The Administration proposal also designs a framework for protecting privacy and civil liberties that includes new oversight, reporting requirements, and annual certification to ensure that cybersecurity technologies are used for their intended purpose and nothing more.

On May 10, Microsoft announced that it was buying Skype , a leading Internet calling company, for $8.5 billion in cash. Skype has 170 million real-time, Internet video and voice communications customers. Microsoft said Skype would be incorporated into Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities.

Everyone's first question seemed to be 'why?' Om Malik was one of the first observers to try to answer that question, saying:

• Skype gives Microsoft a boost in the enterprise collaboration market, thanks to Skype’s voice, video and sharing capabilities, especially when competing with Cisco and Google.
• It gives Microsoft a working relationship with carriers, many of them looking to partner with Skype as they start to transition to LTE-based networks.
• It would give them a must-have application/service that can help with the adoption of the future versions of Windows Mobile operating system.
• However, the biggest reason for Microsoft to buy Skype is Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple’s emerging communication platform, Facetime.

We've collected stories about the challenges of integrating the two companies , what a Kinect/Skype combination might look like, how the deal might change things in your living room, the potential impact on wireless carriers, and how Skype came to think it was wort all that money. You might also be interested in how the deal is a lesson in offshore accounting.

May 10th's other big story was a Senate hearing on mobile privacy chaired by Sen Al Franken (D-MN). He said, “Consumers have a fundamental right to know what data is being collected about them. They have a right to decide whether they want to share that information, and with whom they want to share it and when. And yet reports suggest that the information on our mobile devices is not being protected in the way that it should be.”

Currently, no federal laws exists to punish companies when customers’ personal information and data were stolen in cyber-attacks, or mishandled by companies. The European Union's top advisory body on online privacy will issue an opinion this month saying that information collected by phone and Internet companies on customer locations must be treated like names, birthdays and other personal data. Will the US follow suit? A consensus has formed in Washington that the patchwork of federal and state privacy laws has not kept pace with the development of the Internet. There's a number of privacy proposals in both houses, but no one is certain now which bill will move.

[ICYMI: Fast Company published a nice primer explaining how your phone knows where you are]

AT&T's proposed acquisition of T-Mobile got its first Congressional hearing on May 11. Senate Antitrust Subcommittee Chairman Herb Kohl (D-WI) said: “The more providers of cellphone service, the lower the price, the better the quality of service and the more innovation that results, so the burden will squarely be on AT&T and T-Mobile to convince us why this merger is necessary, how it will benefit consumers, and to put aside our suspicion that it may very well harm competition.” The quote is indicative of the skeptical tone taken by senators on the panel. Of note, Chairman Kohl also said:

"You know, you would almost argue to us here today that what you're wanting to do is something in the national interest. And that's okay, you're here to run a business, and I'm a business man myself and I appreciate it. But this is a business deal. This is a business deal to make your company more successful and more profitable. And I understand that, we all understand that, but we should discuss it in that context — not how this is in the national interest. This is not your consideration."

AT&T CEO Randall Stephenson strongly defended the deal. He refused to call T-Mobile a competitor and denied that AT&T considered the benefits of removing T-Mobile from the wireless marketplace. But he did signal some areas where he's willing to deal. During the hearing, Cellular South CEO Victor Meena complained that smaller carriers have been unable to reach data roaming agreements with AT&T. Subcommittee ranking member Mike Lee (R-Utah) pressed Stephenson on whether he would offer data roaming deals to smaller carriers like Meena's at reasonable rates. "Absolutely, that's the law," Stephenson replied, and offered to meet with Meena after the hearing to discuss his specific concerns. Stephenson also agreed that his company would not accept any money from the Universal Service Fund to help expand its wireless broadband offerings. The fund has traditionally subsidized telephone service in rural and high-cost areas but the Federal Communications Commission is revamping it to include support for broadband service.

See our full recap of the hearing and track the transaction at http://benton.org/headlines/at-t-t-mobile/

The week's last bit of news came from a House subcommittee hearing on reforming the Federal Communications Commission (more)

Subcommittee Chairman Greg Walden (R-OR) offered seven possible reforms:

1. The FCC could be required to start new rulemaking proceedings with a notice of inquiry rather than a notice of proposed rulemaking. An NPRM presumes regulation is needed. The FCC should first examine the state of the relevant markets, services, and technologies. Even when regulation may be appropriate, the FCC is unlikely to craft as useful a proposal without first gathering preliminary information.
2. The FCC does not always publish the text of proposed rules for public comment before adopting final rules. Providing specific text will allow for more constructive input and a better end product. Crafting proposed rules should not be difficult if there is a genuine need and the FCC has started with an NOI.
3. Finite timelines for resolution of matters would be helpful. Parties and the public should have some sense of when resolution will come.
4. The FCC now makes information available about which draft items are circulating before the commissioners. The FCC could be required to provide additional information, such as a list of all unfinished items at the commission, the date the items were initiated, their current status, and expected date of completion.
5. A bipartisan majority of commissioners other than the chairman could be allowed to initiate items to prevent a chairman from stopping consensus items. FCC Commissioners Michael Copps and Robert McDowell support this proposal; Chairman Genachowski and Commissioner Mignon Clyburn say it is unnecessary.
6. The President’s Memorandum for the Heads of Executive Departments and Agencies, “Regulatory Flexibility, Small Business, and Job Creation” requires executive agencies to conduct cost-benefit analyses before adopting regulations. The memorandum does not apply, however, to independent agencies like the FCC. We could remedy that by requiring the FCC to identify actual consumer harm and conduct economic, market and cost-benefit analyses before adopting any regulation.
7. The FCC’s transaction review standards are vague and susceptible to abuse. Parties with a pending transaction should not feel pressure to accept “voluntary” conditions on the deal or to curtail their advocacy in other proceedings. The FCC could be prohibited from adopting any conditions unless they are narrowly tailored to any transaction-specific harm. To prevent the FCC from using transactions to commence industry-wide changes it could not otherwise adopt, the FCC could be required to show statutory authority for the conditions outside the transaction review provisions of the Act.

Surprisingly, the Subcommittee did not address the unexpected departure of FCC Commissioner Meredith Attwell Baker to become Senior Vice President of Government Affairs of NBCUniversal. Just four months ago, Commissioner Baker voted to approve Comcast’s $13.75 billion deal to acquire control of NBC Universal from General Electric. Baker, you may recall, objected to FCC attempts to impose conditions on Comcast's purchase of NBC Universal and argued that the "complex and significant transaction" could "bring exciting benefits to consumers that outweigh potential harms."

Though Baker was appointed to what is considered an independent regulatory agency, she signed the Obama Administration’s ethics pledge upon taking office in July 2009. Under the pledge, she will not be allowed to lobby anyone at the FCC for two years after her departure. In addition, Baker will not be able to lobby other political appointees at the FCC, including other commissioners, for the remainder of the Obama administration, including a second term if the president is re-elected. She faces a lifetime ban on lobbying any executive branch agency, including the FCC, on the agreement that Comcast made with the commission as a condition of its approval of the merger with NBC Universal. Baker can lobby members of Congress immediately upon beginning her new job.

The New York Times questioned the move and asked Congress to "expand the definition of lobbying beyond face-to-face encounters to any effort to influence government decisions for their clients. It should also set tight caps on what former officials, including former lawmakers, can earn from lobbying before they must register as lobbyists." The Columbia Journalism Review was critical of some coverage of the departure The House Committee on Oversight and Government Reform may launch an investigation.

What a week. And, you know, next week could be even busier -- especially if you live in Nebraska.