August 2009

Publicis to buy Microsoft's Razorfish in $530M deal

French ad giant Publicis Groupe will buy Microsoft's digital ad firm Razorfish to boost its share of advertising on the Web. The cash and stock deal is valued at $530 million. The two companies also signed a five-year deal that allows Publicis to buy display and search advertising on favorable terms across Microsoft's digital properties in exchange for minimum guaranteed purchases. Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and marketing services, and guarantee minimum spending. In addition to Microsoft, Razorfish's major clients include Ford Motor, Best Buy and McDonald's.

NTIA Issues Broadband Mapping Data Correction

On July 8, 2009, NTIA published a Notice in the Federal Register to announce the availability of funds for the State Broadband Data and Development Grant Program pursuant to the authority provided in the American Recovery and Reinvestment Act of 2009 (Recovery Act) and the Broadband Data Improvement Act (BDIA). The Technical Appendix of the Notice directs awardees to provide a timeline for anticipated dates of data delivery, including the provision of a substantially complete set of the following information to NTIA regarding each provider's service area no later than February 1, 2010: broadband service availability by service address and by shapefile for wireless services; residential broadband service pricing based on average revenue per end user and weighted average speed; broadband service infrastructure based, specifically last-mile and middle-mile connection points; and a listing of community anchor institutions. The Technical Appendix also includes a description of the specific technical formats to be used when submitting the data. In addition to the information the Technical Appendix requires to be provided, the Notice requires applicants to provide a comprehensive description of plans to obtain all data required under the Technical Appendix regarding service provided by commercial or public providers as part of the application to be submitted between July 14, 2009 and August 14, 2009. This Notice is intended to clarify the exact level of detail required by the information collection set forth in the following sections of the Technical Appendix.

1) In lieu of reporting address-specific data, Awardees may satisfy the requirements of this section of the Technical Appendix by providing NTIA, for each facilities-based provider of broadband service in their state, a list of all census blocks of no greater than two square miles in area in which broadband service is available to end users, along with the associated service characteristics identified in the Technical Appendix.

2) With respect to the "Availability Area Shapefile Details," item 4 will be satisfied if each polygon indicates the subscriber broadband service authorized maximum downstream and upstream speed available.

3) Awardees are not required to report average revenue per end user. Awardees must satisfy the remaining conditions of this section, provided that such data may be reported across a provider's service or local franchise area, by Metropolitan or Rural Statistical Area.

4) Awardees are not required to report the data identified in the Last-Mile Connection Points section. Nevertheless, to the extent an Awardee is unable to reasonably verify the network service area availability data required under Section 1 of the Technical Appendix by other means, the Awardee should be prepared to conduct verification by reference to the first points of aggregation in the networks (serving facilities) used by facilities-based providers to provide broadband service to end users, as described in this section of the Technical Appendix.

Commerce Department Drops Request for Sensitive Broadband Data

The Commerce Department said Friday it agreed to drop a request for sensitive revenue and infrastructure data from telecom carriers as part of an Internet mapping project that will spur President Barack Obama's goal of blanketing the country with high-speed broadband. The National Telecommunications and Information Administration released a clarification Friday of its data requirements. The agreement comes about a week after a wide-ranging group of telecom associations complained that the NTIA was seeking sensitive and irrelevant information. The deal also resolves a potential standoff between the government and carriers that probably would sue rather than turn over revenue numbers about their Internet subscribers. AT&T, Verizon, Comcast, and several telecom associations like USTelecom, the American Cable Association, and the Wireless Communications Association International agreed to give the government access to their firms' Internet availability based on census blocks. The Commerce Department originally wanted to know about Internet availability on an address-by-address basis. The problem, according to consumer advocates and researchers, is that Internet data compiled state by state would be inferior to a national database that could be put together by the Federal Communications Commission. Without a national standard, the Internet data provided by individual carriers could meld together to be gibberish. "Significant questions remain as to the consistency of data collected across 50 different states, as well as the accuracy and verifiability of the information," the Internet advocacy group Free Press wrote to the FCC last week.

NTIA Losing Game of Data Chicken

[Commentary] A week or so ago we posed this choice: "At the end of the day, somebody is going to be in control of the mapping. It will either be the public, and the public interest, as represented by NTIA, or the industry." It appears that may have been, at least in part, a false choice. The NTIA has already started backing off its data-collection notice, in this Federal Register notice. There was no reason to give away much of anything to start. Certainly, the mapping notice of funds availability (NOFA) had its numerous problems. Fixing it would require a month or so delay to get it right — something some of us requested. NTIA didn't do that. But in the face of the massive industry lobbying, NTIA started making concessions. The biggest one is that it backed off of the detailed speed data. Instead of reporting maximized advertised upstream and download speeds at the address level, NTIA now requires only speeds across service areas or local franchise areas. That change is a monumental mistake, made for no reason. If this mapping exercise is going to be worth even 1/10 of the money Congress appropriated, it's about time for the government to step away from the table with the industry, remind itself of its public interest obligations and quit giving away the store.

FCC Starts with a Clean Slate for Next broadband Report to Congress

The Federal Communications Commission began its sixth inquiry for Congress into the state of broadband in the US -- an inquiry that this year is intertwined with the agency's larger effort to create a National Broadband Plan. In the Notice of Inquiry, the Commission starts with a clean slate against a backdrop of statutory and policy changes. Those changes include Congress's requirement that the FCC develop a comprehensive National Broadband Plan by Feb 17, 2010, that it improve its broadband data collection, and the Commission's own efforts to collect broadband data on a more granular basis. A report based on the inquiry, commonly known as the "706 Report" after the section of the Telecommunications Act of 1996 mandating it, must be delivered to Congress on Feb. 3, 2010. Comments and other materials received for the National Broadband Plan relevant to the inquiry will be incorporated in the upcoming 706 Report.

Rural Telecom Associations Say BIP Rules Are Flawed

Asserting that the current evaluation criteria illegitimately favors larger over smaller broadband carriers, a coalition of industry associations representing small rural telecom providers has written a letter to the administrator of the Dept. of Agriculture's Rural Utilities Service urging the agency to change proposed evaluation criteria in the Notice of Funds Availability for the federal government's Broadband Initiatives Program. Part of the American Recovery and Reinvestment Act, Congress directed that when appropriating BIP funds "priority...shall be given to projects that provide service to the highest proportion of rural residents that do not have broadband service," the letter states. The August 5, 2009 letter is addressed to Jonathan Adelstein, new administrator of the RUS. "The clear impact of this language is that any application serving fewer than 10,000 unserved households will not receive any points under this criterion, even if all the households are unserved...As expressed in the NoFA, this criterion would unfairly discriminate against small companies serving sparsely populated areas, in contravention of Congress's purpose," according to the letter, which was signed by representatives of General Communication Inc., the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies, the Rural Cellular Association, the Rural Independent Competitive Alliance and the Rural Telecommunications Group.

Small Cable Operators Balk at Special Conditions In Broadband Stimulus Money

What if the government held a $7.2 billion cash giveaway and nobody came? The deadline for the initial round of funding for the $7.2 billion broadband stimulus program is Aug. 14 and early indications are that small cable operators may sit out the program in fairly large numbers. As one long-time small cable-system operator who requested anonymity put it: "There are a lot of strings on that money." Gigi Sohn, president of Public Knowledge, has been advising some potential bidders and has heard her share of grousing over the ground rules. "I think it is a little too soon to tell whether the stimulus package is stimulating because they haven't given out any money yet," Sohn said. "That being said, there is an awful lot of concern, and not just among cable operators, but among institutional providers like libraries and schools, among small municipal Wi-Fi providers and smaller network providers, there is a lot of concern that the guidelines are not helpful for the little guys."

Sen Gillibrand calls for spending on rural health IT

Sen Kirsten Gillibrand (D-NY) would like to see some of the federal stimulus' rural broadband dollars set aside for health IT projects. The Department of Agriculture's Rural Utilities Service will oversee the disbursement of $2.5 billion in American Recovery and Reinvestment Act funding for rural broadband initiatives. In a July 29 letter to the RUS administrator Jonathan Adelstein, Gillibrand called for healthcare-related projects to be given precedence. "As the agency moves forward in funding broadband infrastructure projects, I ask that proposals that focus on the development of broadband networking healthcare facilities be given special priority," Sen Gillibrand wrote. Such projects, she added, "would assist with expanding high-speed Internet access to rural communities and implementing the administration's [electronic health records] objectives." Sen Gillibrand said hybrid healthcare/broadband initiatives are on track with ARRA's healthcare technology and broadband infrastructure aims.

Close Reading: The Internet Freedom Preservation Act of 2009

A quick rundown of what's in the Internet Freedom Preservation Act of 2009.

How Many Broadband Providers Are Enough?

How many broadband providers can smaller markets support? It's a question that has more relevance these days as programs like the universal service fund and the rural utilities service wrestle with competitive implications. Should small markets have multiple competitors, when the market size may only justify one or two? Should broadband policy promote, and maybe even artificially support, multiple broadband competitors in small and rural markets?

Benton

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