Daily Digest 7/20/2018 (Radio Free Europe/Radio Liberty)

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Government and Communications

Radio Free Europe/Radio Liberty Directed Ads to Americans

A broadcasting organization backed by the federal government has used Facebook to target ads at United States citizens, in potential violation of longstanding laws meant to protect Americans from domestic propaganda. Radio Free Europe/Radio Liberty, which typically broadcasts to audiences in Europe, Asia and the Middle East, bought several ads on Facebook in recent days that were targeted at users in the United States. The ads included several human-interest stories about Russia and a graphic about NATO’s popularity. As with other state-funded media organizations, Radio Free Europe/Radio Liberty is mostly restricted by law from promoting its content in the United States except on request.

The ads that ran on the organization’s Facebook page were visible to the public because of a recent policy change by Facebook. In May, the social network began displaying more information about ads on its platform, including about where the ads were targeted and the buyers. It is unclear how many people saw the advertisements, or for how long the broadcaster has been directing them to Americans. The organization, which is overseen by a person appointed during the Obama administration, said in a statement that it had purchased the ads, as well as ads in 14 other countries, to reach Facebook users who spoke specific languages. After being contacted by The New York Times, Radio Free Europe/Radio Liberty pulled down the ads.

President Trump says news media wants to see a confrontation with Russia, even war

President Donald Trump lashed out anew at the news media, suggesting that reporters are slanting their coverage of his relationship with Russian President Vladi­mir Putin with the aim of provoking a possible war. “The Fake News Media wants so badly to see a major confrontation with Russia, even a confrontation that could lead to war,” the president wrote amid a series of morning tweets. “They are pushing so recklessly hard and hate the fact that I’ll probably have a good relationship with Putin.” In another tweet, President Trump claimed that his summit with Putin “was a great success, except with the real enemy of the people, the Fake News Media.”

Ownership

FCC Issues Hearing Designation Order for Tribune Media Company and Sinclair Broadcast Group

On June 28, 2017, Sinclair Broadcast Group and Tribune Media Company filed applications seeking to transfer control of Tribune subsidiaries to Sinclair. Sinclair and Tribune have amended their applications several times thereafter, in an attempt to bring the transaction into compliance with the Commission’s national television multiple ownership rule, as well as the public interest requirements of the Communications Act. Among these applications were three that, rather than transfer broadcast television licenses in Chicago, Dallas, and Houston directly to Sinclair, proposed to transfer these licenses to other entities. The record raises significant questions as to whether those proposed divestitures were in fact “sham” transactions....Although these three applications were withdrawn July 18, material questions remain because the real party-in-interest issue in this case includes a potential element of misrepresentation or lack of candor that may suggest granting other, related applications by the same party would not be in the public interest.

Given these issues and others described below, we are unable to find, based upon the record before us, that grant of the applications would be consistent with the public interest. Specifically, substantial and material questions of fact exist regarding whether: (1) Sinclair was the real party in interest to the sale of WGN-TV, KDAF (a Dallas station), and KIAH (a Houston station); (2) if so, whether Sinclair engaged in misrepresentation and/or lack of candor in its applications with the Commission; and (3) whether consummation of the overall transaction would be in the public interest, including whether it would comply with Section 73.3555 of the Commission’s rules, the broadcast ownership rules. Accordingly, in this Hearing Designation Order, we commence a hearing before the Administrative Law Judge to determine whether the above-captioned applications should be granted or denied. Given the seriousness of the issues presented, we direct the Media Bureau to hold in abeyance all other pending applications and amendments thereto related to the overall proposed Sinclair-Tribune transaction until the issues that are the subject of this Hearing Designation Order have been resolved with finality.

Deal Critics to Tribune Board: Abandon Merger or Quit

Four high-profile Sinclair-Tribune deal critics have gotten together to urge Tribune to pull the plug on the deal. Public Knowledge President Gene Kimmelman; Brian Hess, executive director of the Sports Fans Coalition; Gigi Sohn, distinguished fellow at the Institute for Technology Law and Policy; and Andrew Schwartzman of the Institute for Public Representation wrote a letter to Tribune board members saying, "We believe that the only reasonable and prudent action under your fiduciary duty as Tribune directors is to abandon the proposed sale to Sinclair Broadcast Group and focus entirely on the responsible management of your company." They said that because Tribune's obligation to consummate the deal is conditioned on Sinclair's representations being truthful, and because the Federal Communications Commission has unanimously determined that Sinclair may have lacked candor in possible violation of law, Sinclair has failed to satisfy one of its commitments--that all its representations to the FCC be "true and correct in all respects," and Tribune can terminate the deal now, before an Aug. 18 breakup date, without any financial penalty. If the board members do not abandon the merger, the deal critics said, those members have only one option: resign.

Comcast Pulls Offer for Fox Assets, Ending Bidding War With Disney

The cable and broadband giant Comcast said it was abandoning its bid to acquire a major chunk of 21st Century Fox but would continue its push to win control of the British satellite broadcaster Sky, a move that appeared to end a complex bidding war for Rupert Murdoch’s media company. Comcast said it “does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky.” Comcast had been locked in a battle with the Walt Disney Company for the bulk of Murdoch’s Fox empire, with the cable company submitting a $65 billion offer for the assets in June.

What the Justice Department will argue to get its AT&T appeal

The Justice Department’s renewed effort to thwart AT&T’s merger with Time Warner rests on claims that a federal judge misunderstood “fundamental principles of economics,” according to court documents. Asking a federal appeals court to swiftly consider their case against the telecom giant, government lawyers said Judge Richard Leon of the U.S. District Court for the District of Columbia erred by rejecting “basic bargaining economics” when he ruled to allow the $85 billion deal in June. Throughout a roughly six-week trial this spring, antitrust regulators argued that AT&T’s merger would make it harder or more expensive for rivals to stay in business, and that it could lead to higher prices for consumers. Judge Leon rebuffed the government, saying its arguments “rested on improper notions.” But federal officials now say Judge Leon failed to properly account for the role that threats can play in negotiations between programmers such as Time Warner and TV distributors such as Comcast or Cox. Time Warner controls popular channels, such as CNN and TNT, that many distributors say they need in order to serve their customers. The Justice Department also said in its court filing that Judge Leon overlooked a “basic economic axiom”: Time Warner could be motivated to behave anticompetitively, it said, if doing so would help AT&T’s own TV service, DirecTV, or if it benefited the parent company’s overall bottom line. “The district court’s disregard of economic reasoning constitutes reversible error,” the Justice Department wrote to the US Court of Appeals for the DC Circuit. 

There is a lot to fix in US antitrust enforcement today

[Op-ed] The court decision allowing AT&T to acquire Time Warner is an example of the inability of our current system of courts and enforcement to prevent the decline in competition in the modern US economy. In the case of that merger, the Antitrust Division of the US Department of Justice gets credit for making an attempt to block what it viewed as an anti-competitive transaction. What’s more, that view proved prescient after the now-merged firm almost immediately raised prices after executives testified that the synergies from the deal would immediately cause lower prices. The court decision of US District Judge Richard Leon demonstrated a lack of understanding of the markets, the concept of vertical integration, corporate incentives, and the intellectual exercise of forecasting what the unified firm would do. And so, not surprisingly, it produced a poor decision. The Supreme Court decision in Ohio v. American Express Company further weakens antitrust enforcement by complicating the analysis and raising the standard of proof for platform business cases. Articles in a recent Yale Law Journal identify the types of cases the agencies should be pursuing such as anti-competitive most-favored-nation clauses, laying out the rationale for the agencies’ bringing cases involving harm to sellers, including employees, as this is a source of anti-competitive harm as much as higher prices. 

[Fiona M. Scott Morton is the Theodore Nierenberg Professor of Economics at the Yale University School of Management]

Cost of Exclusion as a Proxy for Dominance in Digital Platform Regulation

[Analysis] While many regulations promoting consumer protection and competition apply throughout a sector, some economic regulations apply to “dominant” firms or firms with “market power.” Behavior that is harmless, or potentially even positive when done by smaller companies or in a more competitive marketplace, can be anticompetitive or harmful to consumers when done by dominant firms -- regardless of the firm’s actual intent. Defining what constitutes “dominant” (or even identifying a single market in which to make such a determination), presents many challenges using the traditional tools of analysis favored by antitrust enforcers and regulators. I therefore propose that we use the cost of exclusion (“COE,” because nothing in policy is taken seriously unless it has its own acronym) as the means of determining when we need to apply regulation to “dominant” firms. That is to say, the greater the cost to individuals and firms (whether as consumers or producers or any of the other roles they may play simultaneously on digital platforms), the greater the need for regulations to protect platform users from harm. If a firm is “too big to lose access to,” then we should treat that firm as dominant.

[Harold Feld]

Broadband/Internet

Massachusetts Senate passes net neutrality transparency bill

The Massachusetts Senate unanimously passed a bill that would require internet service providers to provide more transparency related to net neutrality and consumer privacy. The bill would create a registry of internet service providers that would make public their practices with regard to "broadband internet access service quality and network management." The registry would grade internet service providers on net neutrality and consumer privacy, and the companies would have to tell customers those grades before entering into an agreement for service. The bill would establish a "preference" in state agency contracts for using internet service providers that practice net neutrality. But lawmakers rejected on a voice vote an amendment by State Sen. Jamie Eldridge (D-Action) that would have actually imposed state-level net neutrality. "Without net neutrality laws, nothing will prevent giant internet service providers from blocking or slowing down content of competitors," Sen Eldridge said. "We shouldn't wait until the telecom industry becomes an oligarchy to take action."

Broadcasting

Death in the Air: One Woman's Crusade Against Broadcast Media Consolidation

Independent "media watchdog" Sue Wilson, a veteran of journalism with two decades working in broadcast TV and radio in the LA and Sacramento markets—during which she won two Emmy awards, one for a feature series on government waste— has kept an eye on the slow creep of wavelength monopolization since President Bill Clinton signed the Telecommunications Act of 1996. Previously, no single commercial owner could lay claim to more than 20 AM and 20 FM frequencies, but after the legislation was signed, those national caps were removed, leading to a predictable corporate fight for the largest portion of the pie. Bandwidth limitations meant that there was value on the broadcast spectrum that couldn’t compare to what was increasingly available online, in print, or even on cable. On those mediums, anyone with enough startup capital could conjure their own outlet and thus expand the total pie. But in broadcast radio and TV, what’s available is what’s available, and that’s that. To Wilson, the train derailment outside Minot (SD) was a perfect example of what might happen when the airwaves are consumed by neglectful landlords. This story would feature prominently in her documentary on the subject, Broadcast Blues, released in 2009. But it was another, more infamous radio mishap in her own backyard that would land Wilson a conclusive victory against corporate monopolization of the public airwaves.

via Popula
Content

Media — both on the left and right — are pressing Facebook to define what journalism is

BuzzFeed’s Ben Smith was confused as hell and he wasn’t going to take it anymore. So while he’s not exactly Howard Beale, the famously pugnacious editor of BuzzFeed pressed hard recently on global news partnerships head Campbell Brown to explain how Facebook defines journalism and who practices it. The focus of his ire was the presence of six conservative publications at a biannual meeting that Brown ran recently with a group of editors and publishers Facebook works with. While Smith had no issue with outlets like the National Review and the Weekly Standard — mainstream conservative media that he lauded — he wondered out loud why “trash” like the Daily Caller was allowed there and that Facebook was false-balancing right versus left media outlets. Neil Patel, the Daily Caller's current publisher, was also present at the Facebook meeting, obviously disagreed with Smith’s assessment and questioned why he brought it up now rather than at many previous Facebook media meetings the Daily Caller staff had attended, apparently. 

via Vox
Emergency Communications

Anti-censorship tool opens new rift between lawmakers and tech companies

Lawmakers are turning up the pressure on Google and Amazon to reconsider their ban on a powerful anti-censorship technique used by millions of people worldwide to bypass restrictions on Internet access. Sens Marco Rubio (R-FL) and Ron Wyden (D-OR) are calling on the companies to explain their abrupt decision to prohibit “domain fronting,” which allows users to visit blocked websites and use restricted applications by disguising the actual destination of Web traffic. The move exposes a new front in the clash between lawmakers and tech companies, this time over their role in promoting free speech and open Internet access in repressive countries. And the attention from lawmakers could throw an important lifeline to political dissidents, persecuted groups and others seeking to communicate and browse the Web without alerting government censors. Sens Rubio and Wyden say they’re worried that Google and Amazon made the changes without considering the fallout for people in countries that tightly control Internet access such as China, Iran, Russia and Egypt.

Justice Department plans to alert public to foreign operations targeting US democracy

The Justice Department plans to alert the public to foreign operations targeting US democracy under a new policy designed to counter hacking and disinformation campaigns such as the one Russia undertook in 2016 to disrupt the presidential election. The government will inform American companies, private organizations and individuals that they are being covertly attacked by foreign actors attempting to affect elections or the political process. “Exposing schemes to the public is an important way to neutralize them,” said Deputy Attorney General Rod J. Rosenstein. “The American people have a right to know if foreign governments are targeting them with propaganda.” The Obama administration struggled in 2016 to decide whether and when to disclose the existence of the Russian intervention, fearing that it would be portrayed as a partisan move. Concerns about appearing to favor the Democratic presidential nominee, Hillary Clinton, weighed on President Obama, who was reluctant to give then-GOP-nominee Donald Trump ammunition for his accusation that the election was rigged. “If this disclosure requirement had been around in 2016, I firmly believe that it would have served as a meaningful deterrent after Russia’s interference was first discovered, and it would have informed voters more quickly and more forcefully that a foreign government was tying to affect their vote,” said Rep Adam B. Schiff (D-CA), who two years ago pressed the Obama administration to call out Russia’s activities.

Rep Collins Introduces Legislation to Address 9-1-1 Fee Diversion

Rep Chris Collins (R-NY) introduced legislation that prevents states from diverting fees collected from consumers on their phone bills, which are meant to be used to improve 9-1-1 emergency communications systems. The Federal Communications Commission has found that New York diverts at least 41 percent of 9-1-1 fees that are collected for other non-public safety related purposes. Rep Anna Eshoo (D-CA) and Rep Leonard Lance (D-NJ), co-authored the bill and have also seen 9-1-1 fee diversion in their home states. Rep Collins’ bill directs the FCC, in consultation with public safety organizations, and state, local and tribal governments, to determine the appropriate use of funds collected from consumers. Currently, states are able to set their own definition of what is a covered cost for 9-1-1 fees, which has allowed them to divert fees. In April, Rep Collins toured the Niagara County 9-1-1 call center with FCC Commissioner Mike O’Rielly where they called on the state of New York to stop diverting fees.

Open Government

FCC Transparency Act Reintroduced

Rep Adam Kinzinger (R-IL) has reintroduced the Federal Communications Commission Transparency Act (HR 6422), which would mandate that the FCC publish the drafts of items to be considered in a public meeting 21 days ahead of that vote. The FCC already does it as a matter of practice under FCC Chairman Ajit Pai. But Rep Kinzinger wants to make it the law of the land for future chairmen and commissions. The bill provides some discretion for the chairman to waive the requirement if a document is deemed confidential, classified or its release would be an invasion of privacy, along with other "sensitive data" exemptions per "longstanding law and policy."

Policymakers

White House Appoints Federal Chief Information Security Officer

The Office of Management and Budget announced Grant Schneider will be the second federal chief information security officer. As such, Schneider will lead cybersecurity strategy across the executive branch and chair the CISO Council. Schneider has been filling the CISO role in an acting capacity and is the National Security Council’s senior director for cybersecurity. He will continue serving in his position the NSC, according to an administrative official. “Grant Schneider brings extensive cybersecurity experience well aligned to lead efforts in securing government systems from cyberattacks,” said Margaret Weichert, OMB’s chief management official. Schneider served as deputy to the first federal CISO, Gregory Touhill. He previously served as the Defense Intelligence Agency's chief information officer. Touhill stepped down from the role in January 2017, just before President Donald Trump’s inauguration.

Security
Stories From Abroad

What Europe’s Google Fine Means for Android Users

The European Union wants Google to stop tying together its search, browser and app store products for handset makers. The regulators would love it if Google simply let handset makers like Samsung ship Android phones loaded with their own browsers and app stores instead of Google’s. Yet the European Union is letting Google decide how it wants to comply with its ruling. Keep in mind that Google is staffed with some of the world’s top lawyers and engineers, who will probably find compliance solutions that have a minimal impact on its business. And handset makers are in a tough predicament: They probably wouldn’t want to strip their phones of Google’s apps, simply because many customers enjoy using the search giant’s products. So there's only a slim chance that you will see any changes. If Google decides to make any noticeable changes at all, the changes might appear only for European Android users who have phones with the newer Android operating system. Even if Google made some tweaks to its operating system in the next 90 days, they would most likely show up only in the latest versions. Only about 5 percent are running the latest version of Android, called Oreo. 

Six questions you were afraid to ask about Google’s EU antitrust case

  1. What exactly did Google do wrong here? The European Commission has ruled that Google has been unfairly using Android (which Google owns and develops) to push Google Search (which makes up most of Google’s business) on users, giving them an unfair and uncompetitive advantage.
  2. Why doesn’t this apply to Apple? The European Commission’s report says that it views Android as different from, say, Apple’s iOS or BlackBerry’s mostly-defunct BlackBerry OS since those are exclusive, vertically integrated operating systems that can’t be licensed by third-party device manufacturers. 
  3. Can’t you install anything on Android? Why is the Play Store so important? Strictly speaking, yes But according to the Commission, the Play Store is too important for Android devices.
  4. If Search is the problem, why is Chrome included? Chrome is an essential avenue to Google Search, so Chrome is bundled into the ruling, too.
  5. What do other companies think? For the most part, nothing.
  6. What happens next? Google has 90 days to comply with the European Commission, which would mean paying the $5 billion fine, stop forcing manufacturers to preinstall Chrome and Google Search in order to offer the Google Play Store, and stop preventing phone makers from using forked versions of Android. 
via Vox

President Trump says ‘I told you so!’ after Europe fines Google $5 billion

President Donald Trump attacked the European Union for fining Google $5 billion for harming its competitors, tweeting that the incident proved the regional bloc has “taken advantage of the U.S., but not for long!” To President Trump, the fine appeared to serve as the latest evidence of Europe’s exploitation of the United States on a variety of matters, including trade and nations’ contributions to defense spending, and it came a day after he threatened “tremendous retribution,” particularly on European-made cars, if the EU doesn’t change its trade policies. The EU’s penalty stood in stark contrast with the United States, where federal antitrust regulators previously investigated Google’s search and advertising businesses but concluded their probe in 2013 without bringing major penalties against the tech giant. 

Project Loon signs its first deal for Internet-delivering balloons—in Kenya

Project Loon, the Internet-delivering balloon system that grew out of Alphabet's Project X division, has announced its first commercial deal. Apparently, the recent Project X graduates will partner with Telkom Kenya to increase connectivity in the country. “Connectivity is critical. If you are not online, you are left out,” said Joe Mucheru, Kenya's information, communication, and technology minister. "Loon is another technology that is being introduced that the licensed operators hopefully can be able to use.” With this new partnership, Telkom Kenya will provide the Internet signal and Loon will spread it over remote areas of Kenya.

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Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Robbie McBeath (rmcbeath AT benton DOT org) -- we welcome your comments.

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