June 2010

BBC's Internet TV venture gains approval

Project Canvas, the BBC-led move to integrate online video and traditional television, passed its final major hurdle on June 25 when it was approved by the corporation's governing body.

The BBC Trust said that subject to certain conditions including granting access to content rights holders and Internet service providers, the BBC could participate. The trust said the BBC must publish within 20 working days the core technical specification of Canvas, which is likely to be launched early next year under the brand name YouView. It wants all those involved "to engage with industry on these and future elements of the technical specification." The final technical specification will be published within eight months and before the sale of the first set-top boxes.

Who Approved These Ads?

[Commentary] When the Supreme Court cavalierly threw aside decades of controls to let corporations and unions flood federal elections with unlimited campaign funds, the alternative the court suggested was a mandatory dose of transparency. Let voters know who is really behind the new wave of spending was the court's prescription. The House took the court at its word June 24 and approved disclosure requirements to have deep-pocket spenders identify themselves on their ads, the same as candidates do, and not hide behind propaganda front groups. It is absolutely essential that the Senate quickly follow suit and vote final approval of the House's Disclose reform act in time for the November elections.

House approves campaign finance bill in 219-206 vote

On June 24, the House voted 219-206 to approve the DISCLOSE Act (HR 5175), a campaign finance bill to tighten disclosure requirements for corporate and union spending on political campaigns. The bill now heads to the Senate, where it faces a perilous path to passage.

Hearing Summary - Universal Service: Transforming the High-Cost Fund for the Broadband Era

On June 24, the Senate Commerce Committee held a hearing on transforming the Universal Service Fund from its traditional role of lowing monthly telephone bills to supporting broadband deployment and adoption.

Although he did not chair the hearing, Commerce Committee Chairman Jay Rockefeller (D-WV) released a statement saying, "Universal service is a cherished principle. In years past, it has meant that this nation connects every community with basic phone service. But in years ahead, it must mean that we connect our communities with broadband. This subject is not simple, and updating the universal service system is not easy. But it is enormously important, and it is the right thing to do."

Sen Byron Dorgan (D-ND) chaired the hearing and in his opening remarks said that the National Broadband Plan is "dangerously undermined" by the Comcast/BitTorrent court decision. He said the Federal Communications Commission should reclassify broadband transmissions under Title II. But Sen John Ensign (R-NV) said that classifying broadband under Title II would work against the goal of universal deployment by discouraging investment. He said the areas that will suffer are not Los Angeles or New York, but the rural and high-cost areas that the Universal Service Fund is trying to reach.

Sens Ensign and John Thune (R-SD) both asked the FCC commissioners whether they thought the FCC could reform USF without reclassifying under Title II. Commissioner Meredith Baker said she thought there was enough authority under Title I for USF reform (though not for the FCC's proposed expansion and codification of network neutrality rules). Commissioner Michael Copps called it a "questionable proposition," and said it could suffer a death of a thousand cuts from lawsuit after lawsuit. Clyburn could not say it would be impossible to migrate the fund under Title I authority, but noted the BitTorrent decision had made it more difficult, and that the FCC's legal minds had said they didn't think it would be legally sustainable.

Sen Dorgan also asked the FCC commissioner why the FCC has called for broadband speeds in rural areas well below the speed goals set for most other Americans. Commissioner Clyburn said the four-megabits speed was picked because it is the speed currently enjoyed by most U.S. broadband subscribers. Commissioner Copps noted that the goal "is to get comparable service at comparable prices. Our focus is on getting broadband to folks at a level of other subscribers." Commissioner Baker added that the four-megabits goal for rural areas is just a recommendation and pledged to work with Congress on the issue.

Google, ISP talks home in on nondiscrimination rule

Broadband regulation talks between warring companies have narrowed to the most contentious issues separating the stakeholders, homing in on impasses that have put tech companies and broadband providers at loggerheads for years.

The talks focused in on the possibility of imposing a nondiscrimination rule on access providers. Providers have lobbied hard to fend off such a rule, which might make it difficult for them to charge Internet companies more to move certain content and applications (such as high band-width programs) over their networks. The companies are discussing whether such a rule would apply to wireless platforms, a topic dividing cable and wireless companies.

The FCC's minority report

[Commentary] In the 2002 film Minority Report, Tom Cruise arrests innocent people because they will, at some point in the future, commit a crime. While the Federal Communications Commission's methods are considerably less egregious, there is a striking parallel between the sci-fi flick and the FCC's recently announced intention to reclassify broadband as a Title II service.

The motivation behind this decision appears to be that without strong regulatory oversight, broadband operators will inevitably lapse into a range of bad behaviors that will harm consumers and web operators. So like the pre-crime unit in Minority Report, the FCC's mantra seems to be that it is better to stop them now than wait until they actually do something wrong. [Kevin Walsh Vice President of Marketing and Product Management at Zeugma Systems, a privately held telecommunications equipment supplier.]

Universal Service broadband buildout likely favors wireless

[Commentary] The Broadband Availability Gap, a Federal Communications Commission study, looks at the cost of bringing 4 Mb/s service to the 7 million U.S. homes that currently do not have broadband available to them. What they found was that 90% of those homes could be served most cost-effectively using broadband wireless at 700 MHz. The remainder, primarily in mountainous areas, could be most cost-effectively served using DSL.

If the FCC moves ahead as it hopes to on Universal Service and if its cost study is accurate, it raises a lot of questions and issues for rural carriers:

1) 700 MHz spectrum holders. If broadband carriers are chosen based on who offers to deliver 4 Mb/s to unserved areas most economically and if the FCC's cost study is accurate, it suggests that rural carriers with 700 MHz spectrum are in the best position to be chosen.

2) Other rural carriers. All of this suggests that carriers that don't have 700 MHz spectrum would want to look closely at leasing some before they put in any bids on unserved areas.

3) Price cap carriers. The FCC has also noted that two-thirds of the 7 million homes that can't get broadband are in areas where the incumbent is not a rate-of-return carrier. Considering that the wireless units of price cap carriers AT&T and Verizon already have a lot of 700 MHz spectrum, they could also be well-positioned to receive Universal Service funding for the proposed broadband buildout.

4) Areas that already have broadband. The report suggests that some unserved rural areas will require some level of broadband Universal Service Fund support on an ongoing basis, so one would expect that some of the carriers that have already deployed broadband also might continue to be supported. But how will that determination be made? And will support somehow be scaled back if a carrier already offers service at rates above 4 Mb/s by using some sort of 4 Mb/s base case?

Experts Debate U.S. Global Broadband Rankings

At a forum hosted by the Information Technology & Innovation Foundation, panelists debated whether the United States is seriously lagging behind other countries on broadband access and if its place on the global stage is related to a failure of telecommunications regulation.

Sascha Meinrath, director of the Open Technology Initiative at the New America Foundation, said the United States was a leader in broadband penetration, but has fallen behind in adoption. Meinrath showed how other countries have better penetration, cheaper prices and proactive broadband plans.

Matthew Wood, associate director of the Media Access Project, focused on the U.S. failure in telecom regulation, pointing to three areas that he said are seriously lacking: universal service fund reforms, transparency regulations and competition policies.

George Ford, chief economist for the Phoenix Center, the nation shouldn't focus so much on the rankings. Rather, it should care about the value. According to Ford, the U.S. broadband connection has a value of 75 times that of Finland. This makes workers more effective and produces a higher GDP output, he said.

ITIF President Robert Atkinson said the United States is a leader in quality broadband, adding that the real problem is that only 62 percent of Americans have a computer at home. Combined with 96 percent of cable modem coverage, the problem simply is adoption, he said, and sometimes people just don't want it.

Twitter Settles Charges that it Failed to Protect Consumers' Personal Information

Twitter has agreed to settle Federal Trade Commission charges that it deceived consumers and put their privacy at risk by failing to safeguard their personal information, marking the 30th case the FTC has brought targeting faulty data security, and the agency's first such case against a social networking service.

The FTC's complaint against Twitter charges that serious lapses in the company's data security allowed hackers to obtain administrative control of Twitter, including access to tweets that consumers had designated private, and the ability to send out phony tweets pretending to be from then-President-elect Barack Obama and Fox News, among others.

Under the terms of the settlement, Twitter will be barred for 20 years from misleading consumers about the extent to which it maintains and protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent authorized access to information and honor the privacy choices made by consumers. The company also must establish and maintain a comprehensive information security program, which will be assessed by a third party every other year for 10 years.

The FTC vote to accept the proposed consent agreement was 5-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, continuing through July 26, 2010, after which the FTC will decide whether to make it final.

Lawmakers grill Apple CEO Jobs on location information gathering

On June 24, Reps. Ed Markey (D-MA) and Joe Barton (R-Texas), co-chairman of the House Bi-Partisan Privacy Caucus, sent a letter to Apple CEO Steve Jobs asking about recent press reports that the company has updated its privacy policies to alert users that it is collecting and using information about users' precise geographic location. The lawmakers said they were concerned that users appeared to automatically be included in Apple's gathering of geographic data unless they actively opt out of having information collected about them. "Given the limited ability of Apple users to opt out of the revised policy and still be able to take advantage of the features of their Apple products, we are concerned about the impact the collection of such data could have on the privacy of Apple's customers," the lawmakers wrote in the letter. The lawmakers ask for a response by July 12.

Here's the questions:

1. Which specific Apple products are being used by Apple to collect geographic location data?

2. When did Apple begin collecting this location data, and how often is data collected from a given consumer?

3. Does Apple collect this location data from all consumers using Apple products? If the answer is no, please explain which consumers Apple is collecting information from and the reasons that these consumers were chosen for monitoring.

4. How many consumers are subject to this collection of location data?

5. What internal procedures are in place to ensure that any location data is stored "anonymously in a form that does not personally identify" individual consumers?

6. Please explain in detail why Apple decided to begin collecting location data at this time, and how it intends to use the data.

7. Is Apple sharing consumer location information collected through iPhones and iPads with AT&T or other telecommunications carriers?

8. Who are the unspecified "partners and licensees" with which Apple shares this location data, and what are the terms and conditions of such information sharing? How does this comply with the requirements of Section 222 of the Communications Act, which mandates that no consumer location information be shared without the explicit prior consent of the consumer?

9. Does Apple believe that legal boilerplate in a general information policy, which the consumer must agree to in order to download applications or updates, is fully consistent with the intent of Section 222, and sufficient to inform the consumer that the consumer's location may be disclosed to other parties? Has Apple or its legal counsel conducted an analysis of this issue? If yes, please provide a copy. If not, why not?

Benton

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