Ownership

After House Commerce Committee Chairman Greg Walden (R-OR) announce that he had invited the CEOs of both Internet-based companies and broadband internet access service providers to a September hearing on network neutrality, the committee’s Democratic leadership wrote to him saying, “In your announcement of the hearing, you said the Chief Executive Officers from eight of the largest corporations in the world with a combined market capitalization of nearly $2.5 trillion had been invited to testify. Although you stated the hearing was an inquiry into the ‘internet ecosystem,’ you once again failed to recognize how important the internet is for consumers, small businesses, entrepreneurs, political organizers, public interest groups, and people looking for work. We therefore ask that you make sure that any hearing has sufficient witnesses to represent the diversity of real people who will be affected by the FCC’s efforts to roll back net neutrality,”

A coming Congressional hearing on network neutrality has left the likes of Amazon, Facebook, Google and Netflix in a tough position: They can either subject their chief executives to a potential grilling — or sit it out and take plenty of political heat.

If they sit out the hearing, they might send a poor political signal — to supporters and opponents alike — at a time when the Trump administration is preparing to scrap the US government’s current net neutrality rules. For the moment, tech giants don’t have much to say about their plans. Amazon, Facebook, Google and Netflix declined to say if they would dispatch their chief executives to Congress. They have until July 31 to contact the committee about their participation. Republican lawmakers, meanwhile, haven’t yet heard from those companies, either. But the House Commerce Committee did offer an early warning: “It is our expectation that the invited individuals will attend. These CEOs are in a unique position to provide important perspectives on issues they have long been publicly vocal on,” said a spokesman for House Commerce Committee Chairman Greg Walden (R-OR).

Tech giants that decline to attend the hearing — or try to send a lower-level executive — could incur the wrath of federal lawmakers, who are known to blast companies that don’t testify. Then again, appearing before Congress could subject the likes of Amazon’s Bezos or Netflix’s Hastings to tough, unwelcome questions — on issues that might not have to do with net neutrality at all.

Of the many challenges Fox News Channel is facing amid a turbulent year, there’s one threat Rupert Murdoch can cross off the list: Sinclair Broadcast Group has no plans to launch a rival conservative-friendly TV network. Chris Ripley, CEO of the Hunt Valley (MD)-based TV-station giant, is ready to end months of speculation that his company was preparing to mount a competitive threat in the wake of its $3.9 billion deal to acquire Tribune Media in May. “After we acquired Allbritton [Communications] in 2014, we looked hard at launching a national cable news channel, but we decided the world didn’t need another cable news platform,” says Ripley, who makes clear that the rise of Donald Trump and the upheaval at Fox News haven’t changed his calculus. “Our strength is local news,” he maintains. “The market for national cable news is very well served.”

When the Commerce Department earlier in 2017 awarded the contract to build the FirstNet nationwide mobile broadband public safety network to AT&T, it wasn’t a done deal for all 50 states. Individual states still must opt in (which at least five already have done) or opt out of AT&T’s plan for the state. And as a Verizon FirstNet letter sent to the Federal Communications Commission July 24 illustrates, there are a lot of questions about what opting out means.

As Verizon notes in the letter, states opting out are permitted to use a different network operator to build and operate the public safety network within the state, as long as the network is interoperable with FirstNet. But there are some major gray areas, according to Verizon, including whether or not an individual state can use their selected carrier’s “network core” to support the state’s public safety network. The “network core” includes “data centers and systems used to interconnect users to each other and to other public networks,” Verizon said.

President Donald Trump went on a Twitter rampage July 24 and 25, spewing a number of false and misleading claims — many of which we have fact-checked previously. The President tweeted, "So many stories about me in the @washingtonpost are Fake News. They are as bad as ratings challenged @CNN. Lobbyist for Amazon and taxes?" as well as, "Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?"

We will begin with a pair of tweets attacking The Washington Post, which is owned by Jeffrey P. Bezos, the founder of Amazon. Amazon does not own The Post, but in any case the president’s claims about “no-tax” Amazon are out of date. Amazon used to lobby to keep Internet sales free from state taxes, but no more. As of March, Amazon is collecting sales tax on purchases in every state that has one.

In June, Canada's Supreme Court came down on Google—hard. It ruled that the tech giant must take down certain Google search results for pirated products. And not just in Canada, but globally. Now, Google is going south of the Canadian border to push back on this landmark court ruling.

The tech giant filed an injunction July 24 with the US District Court for Northern California, arguing that globally removing the search results violates US law, and thus Google should not be forced to comply with the Canadian ruling. Because the case had already made its way to the highest court in Canada, Google should have not been able to fight the ruling. But Google is hoping to find a loophole on American soil by arguing this violates the First Amendment. “We’re taking this court action to defend the legal principle that one country shouldn’t be able to decide what information people in other countries can access online,” says David Price, senior product counsel at Google. “Undermining this core principle inevitably leads to a world where internet users are subject to the most restrictive content limitations from every country.”

The week of July 17 brought more bad news for Google Fiber, the search giant’s troubled bid to become a powerful internet service provider. On July 18, Greg McCray stepped down as CEO of the company’s ISP business (now formally housed under Access, a subsidiary of Google parent company Alphabet). His departure comes just nine months after Craig Barratt left the same role. Meanwhile, the Access division has faced staffing cuts, and aggressive plans to expand to more cities are on hold indefinitely.

Google Fiber began as an experiment, then briefly seemed poised to grow into a legitimate contender against the ISP incumbents. But today it serves as proof that providing high-speed wired internet is a losing proposition, even for one of the world’s wealthiest companies. The lesson Google is learning is one that the major ISPs already figured out: Providing traditional broadband internet isn’t a great way to make money in 2017, no matter how fast it is. Home broadband adoption has plateaued in the United States as some Americans opt to simply use their phone’s data plans to go online. That’s one reason why the major ISPs, from Comcast to AT&T to Verizon, have focused their efforts on acquiring content providers like NBCUniversal, Time Warner, and Yahoo in recent years.

On July 24, Reps Steve Cohen (D-TN), Mark Sanford (R-SC), and House Judiciary Committee Ranking Member John Conyers, Jr. (D-MI) will host a bipartisan forum on freedom of the press entitled, “The State of Press Freedom in 21st Century America.” The forum will explore, among other topics, the following:

• President Donald Trump’s repeated attempts to seemingly de-legitimize mainstream news outlets by calling them “fake news” and “the enemy of the American people;”
• Threats by President Trump to change libel laws to make it easier to pursue lawsuits against the press;
• Aggressive efforts by the Administrations of Presidents Barack Obama and George W. Bush to prosecute or pressure journalists;
• The potential epidemic of misinformation being presented to the public as “news” that may threaten to undermine the credibility of legitimate journalism;
• Restrictions on access to press briefings; and
• Physical threats to journalists.

A group of independent programmers has called on House and Senate GOP leadership to hold hearings on the proposed Sinclair/Tribune merger.

According to a copy of a letter to the chairs of the House and Senate Commerce and Judiciary Committees, which among them oversee communications issues, including mergers, they warn of the "growing power" of media conglomerate and the leverage they say that gives them over the public's access to content. They call that leverage unprecedented and a threat to "the very freedom of expression cherished by people regardless of political persuasion." Signing on to the letter were Cinemoi, INSP, theblaze, RideTV, One America News Network, and MAVTV Motorsports.

Republican Reps, who have been trying to excise the media cross-ownership ban from the Federal Communications Commission's regulatory playbook, are making that part of the draft legislation reauthorizing the FCC, according to a GOP staff memo for July 25's FCC oversight hearing. Last December, committee chairman Greg Walden (R-OR) and Rep John Yarmuth (D-KY) introduced a bill to repeal the ban, which applies to daily newspapers and broadcast outlets, which the pair called "disco-era" regulations.

The FCC under chairman Tom Wheeler declined to scrap the ban in the most recent quadrennial ownership rule review, despite suggestions on both sides of the political spectrum that it had outlived its usefulness. The rule dates from 1975 and prevents TV and radio stations from owning a daily newspaper in the same market. The FCC in 2003 under then-chairman Michael Powell found the rule no longer in the public interest, but that decision was challenged in court and has remained on the books.

The reauthorization draft, in addition to eliminating the ban, includes process reforms like making public items circulated for a commission vote, something FCC Chairman Ajit Pai has been doing, but which could change under a new chairman unless it were codified. It would also mandate cost-benefit analysis for proposed rules with potentially significant economic impact. It would allow the FCC more flexibility in assessing regulatory fees—the FCC is self-supporting, paying for its ongoing operations through fees on regulated entities. It also raises the status and profile of the chief information officer and FCC inspector general.