May 2010

I'll Show You Competitive...AT&T Jacks iPhone Termination Fee

As of June 1, AT&T's early termination fee on smartphones -- including the iPhone -- will climb to $325 from today's $175.

Carriers justify early termination fees because they subsidize the price of hardware for cellphone buyers in exchange for those buyers agreeing to a one- or two-year contract. Verizon last year raised eyebrows when it increased its termination fee on smartphones to $350 and had to justify its moves to the FCC. No one was impressed with its defense, but Verizon is still charging the higher ETF (although it is now dropping the amount owed each month by $10). AT&T will also lower the fees by $10 a month, and is lowering the early termination fees on non-smartphones to $150 from $175.

Klobuchar slams AT&T rate hike

Sen Amy Klobuchar (D-MN) slammed AT&T for its decision to double the penalty for users who cancel service to their smart phones. Sen Klobuchar called for Congress and the Federal Communications Commission to take action to protect consumers. "AT&T is forcing its customers to pay a price to get their freedom and that's not right," Sen Klobuchar said in a statement. "Too often customers find out after committing to a multi-year contract that their wireless service doesn't meet their needs, and changing your wireless provider shouldn't break the bank. Once again wireless providers have shown that they would rather use arbitrary fees than network and service quality to keep customers."

GSA Adds Tech Office

The General Services Administration is redesigning its Office of Citizen Services and Communications, the division responsible for the agency's public-facing websites and information, to include a technology-focused office. The new Office of Citizen Services and Innovative Technologies will be responsible for identifying new tech strategies to improve service. Dave McClure will remain associate administrator, and Sanjeev Bhagowalia, currently the chief information officer at the Interior Department, will start as deputy associate administrator for innovative technology on May 24.

ONC picks team for eligibility standards quest

A Health and Human Services Department panel will debut next month to advise the national health information technology coordinator on how to help streamline the process of determining the eligibility of applicants for a range of state and federal social and human service programs, including insurance plans set up under the new health reform law.

The panel, made up of Health IT Policy and Standards committee regulars and some outside experts, has been asked to identify standards for exchanging eligibility and enrollment data electronically among a hodge-podge of federal and state health and social service programs. The standards will enable people already receiving benefits from one program to find out quickly whether they are eligible for benefits from other programs, including health insurance.

HHS advisory panel considers patient privacy rules

Doctors and hospitals that want to exchange patient medical data electronically for treatment purposes may not need additional rules for patients' consent providing certain conditions are met, according to recommendations being considered by a federal advisory committee to the Health and Human Services Department.

On May 19, the Health IT Policy Committee, which advises HHS, reviewed recommendations from its Privacy and Security Workgroup. The policy committee is advising HHS on implementing the health IT provisions of the economic stimulus law. Under that law, HHS will distribute more than $17 billion to doctors and hospitals who buy and meaningfully use electronic health records systems. HHS is considering requirements for meaningful use for 2013 and beyond, including rules for protecting patient privacy during health data exchange. Policies are needed to deal with patient privacy and consent in information exchange, especially with respect to facilitators, or middlemen, the workgroup recommended. Rules should be set for middleman data access, retention and reuse, as well as security requirements.

Copper/DSL Renaissance Underway?

[Commentary] With broadband front and center these days, thanks in large part to policy debates surrounding a national broadband plan and the regulations that will govern it, one method of transmission that get's the least amount of respect these days is DSL. It's not as sexy as FTTH and 4G wireless, and quite frankly, cable modem broadband appears to be favored by the broadband buying public over the past year, at least in larger markets.

But there's no denying that DSL is still the workhorse of telco broadband and will be for many years, maybe even decades, to come. It's not just small rural telcos that depend on DSL as their main broadband option, its companies with global reach like AT&T and Qwest as well. Tier 2 providers like CenturyLink, TDS, FairPoint, and Frontier also have huge copper/DSL infrastructure to contend with. I fully admit that all things being equal, FTTH is the better option, and when possible, should be selected over DSL. I also fully admit that, generally speaking, a Mercedes is better than a Toyota (especially these days). But everyone can't afford (or necessarily needs) a Mercedes. Despite all the rhetoric and desire to get FTTH to every home in America, to be blunt, it 'ain't gonna happen.' It's just simply too expensive, and for a nation that continually runs a structural deficit, there are probably other priorities to consider first. I chuckle at analysts and reporters who can't understand why every service provider doesn't just buckle down and do FTTH to their entire footprint. That's easy to say when you don't have to worry about bankrupting your company in the process. The reality is, DSL is here to stay and prolonging its life is paramount. To that end, there's a lot of recent activity afoot.

Upfront Optimism Fueled By Retransmission

[Commentary] There's lots of optimism for the broadcast television network-affiliate model right now due, in part, to the improved economy, but to retransmission deals, too.

The networks and their affiliates finally have a reliable, if still inadequate, second revenue stream just like all those cable networks that have been nibbling them to death all these years. If nothing else, the growing pile of retrans dollars is giving the networks confidence that they can continue to order plenty of pricey pilots and, if need be, overhaul their schedules.

There are two things threatening retrans revenue and, with it, the broadcast networks' ability to maintain their preeminence in TV.

The first is the satellite and cable operators' drive to weaken the broadcasters' bargaining power in retrans negotiations by subjecting them to mediation or some other form of third-party oversight. But Federal Communications Commission officials have indicated that they are disinclined to get involved in regulating retrans negotiations.
The second threat is plain old greed. The retrans money is piling up for the affiliates, and the networks have taken notice. They have got to figure out how to share the wealth without creating a big public stink. That would play into the hands of the cable retrans reformers and draw more meddlesome regulators and lawmakers into the debate.

Docs seek to block 'red flags' rule

Arguing that it places physician practices under the same regulations as banks, credit card companies and mortgage lenders, a lawsuit was filed in federal court in Washington seeking to block the Federal Trade Commission from imposing on doctors its "red flags" rule which deals with preventing, detecting and mitigating identity theft.

"In applying the Red Flags Rule to physicians who do not require payment in full at the time of providing care to patients, the FTC is exceeding its statutory authority and acting arbitrarily and capriciously," according to the lawsuit. It also cites a Nov. 29, 2009 decision where the American Bar Association filed a similar suit against the FTC and the district court held that lawyers and law firms were not necessarily "creditors" when they grant clients the right to defer payment and so were not subject to the rule. The suit further states that, "by failing to articulate a rational connection between the practice of medicine and identity theft," the FTC has acted arbitrarily and capriciously, and also failed to give physicians reasonable notice and the opportunity to comment on the rules as they were being formulated and interpreted.

Pennsylvania Attorney General and Gubernatorial Candidate Subpoenas His Twitter Critics

Pennsylvania Attorney General and Republican gubernatorial nominee, Tom Corbett, has decided to subpoena Twitter for the names of two Twitterers criticizing him.

Corbett subpoenaed Twitter earlier this month for the names of two of its users, going by the names "CasablancaPA" and "bfbarbie." The former user has a blog by the same name which accuses Corbett of corrupt hypocrisy as regards the Pennsylvania "Bonusgate" scandal. Bonusgate, in short, was an investigation by Corbett's office into the possible handing out of bonuses to staffers on state payroll for campaign work, which is illegal by Pennsylvania law. CasablancaPA accuses Corbett's investigation of being politically motivated (he allegedly investigated only Democrats and not his own party for several months, and is accused of engaging in the same bonus practices himself, as well as intimidating critics), and is frequently updated both on the blog and via Twitter. It gets crazier: Corbett, along with many others, think CasablancaPA is run by Brett Cott, who had a whopping 42 charges brought against him during Bonusgate--but was acquitted of all but three. Corbett accuses Cott of using his blog and Twitter account to "deflect blame and deny responsibility for his criminal conduct." Cott's lawyer, though he did not admit his client was behind CasablancaPA, replied, bluntly and hilariously, "For them to say, 'Judge, you should whack him for not being contrite,' is crazy. And it's them trying to save face because they got their ass handed to them at trial." Corbett in turn subpoenaed Twitter, based in San Francisco, for the real names of those two users. It's unclear what exactly those subpoenas could be used for, since the right to make anonymous speech is a pretty well-established law, and public criticism of a publicly elected official is even an established tradition in American politics. Twitter, predictably, declined to supply those names, and the two users.

FCC creates 'casino environment,' Furchtgott-Roth charges

Former Federal Communications Commission member and Hill staffer Harold Furchtgott-Roth accused today's Federal Communications Commission of creating a "casino environment" with its "third way" proposal to classify the transmission portion of broadband connections as a communications, or Title II, service and to impose Network Neutrality and other regulations on those connections. He said the FCC has a history of creating rules that don't fall within the law that puts all of the commission's decisions at risk because no one knows how the courts will view those decisions.

"What America needs is a commission that writes rules that with absolute certainty will withstand court scrutiny."

Ten years ago, hundreds of billions of dollars were invested in telecom companies with business plans based on policy that was not upheld by the courts, Furchtgott-Roth said. "A lot of investors were burned 10 or 15 years ago, and a lot of them will never invest [in telecom] again," he said. "They say 'This is a crazy place.'"

Benton

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