October 2010

FCC's Julius Genachowski struggles between roles of regulator, innovator

Call him what you want, but don't call Julius Genachowski an Internet regulator.

That label, in a political environment where regulation of big business often holds particular scorn, is one that the chairman of the Federal Communications Commission has been fighting to avoid. But for the federal government's top cop for broadband Internet services, that title tends to stick. Chairman Genachowski set two key policy goals when he took the job: to bring super-fast Internet connections to every home in America and to make sure those lines were open for any Web site and new software start-up to have a shot at making it in the digital economy. But those goals have proved just beyond reach, particularly as he tries to carry out them out without stepping too hard on the toes of corporate America. One year into his campaign, his agency is weaker than ever, and it's unclear whether he'll be able to be more than the nation's top regulator for plain old phones and broadcast TV. And that's just fine with many companies who think the federal government shouldn't reign over the Web.

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EZ Texting, T-Mobile settle text blocking suit

EZ Texting and T-Mobile settled a lawsuit over the alleged blocking of text messages for a medical marijuana Web site. EZ Texting's lawsuit, in which it said T-Mobile clamped down on free speech on the Internet, was set for a hearing at the U.S. District Court of he Southern District Court of New York this week.

In a statement Friday, EZ Texting -- a service that sends text message market alerts to cellphone users -- said: "T-Mobile and EZ Texting are pleased to have reached a settlement to the lawsuit filed by EZ Texting on Friday, September 17, 2010. Although the specific terms of the settlement are confidential, EZ Texting and T-Mobile will comply with all applicable laws and mobile marketing guidelines for text message marketing campaigns offered to T-Mobile's customers."

"Just because this particular dispute was settled doesn't mean the FCC shouldn't act on Public Knowledge's petition," said Gigi Sohn, president of Public Knowledge. "Important, legal speech will continue to be blocked arbitrarily by wireless carriers unless and until the FCC takes text messages out of its regulatory purgatory."

Watchdog group waiting for Obama to fulfill ethics pledge for online hub

Despite a campaign pledge, the Obama administration so far has failed to set up a central online hub for all of the government's ethics information.

A review of more than 560 pages of e-mails obtained by The Hill through a Freedom of Information Act request showed that senior White House aides looked to secure funding for such a website, tentatively to be called Ethics.gov. They also hosted meetings with watchdog groups to discuss the initiative. But despite those efforts, the administration has not produced a website to increase government transparency. "There is definitely a big distance from President Obama's Ethics.gov campaign promise and what they have done so far," said John Wonderlich, policy director for the Sunlight Foundation. "They are failing to live up to their promise, but their promise was aimed very high."

NTIA Beats Deadline For Spectrum Report

Apparently, the National Telecommunications & Information Administration has sent the White House a report on its plan for freeing up spectrum through more efficiency and reclamation. The hold-up on the NTIA report is said to be the federal interagency clearance process for a report dealing with "sensitive" federal government spectrum use, like that of the Defense Department.

Charter Subscribers Victims of Retransmission 'Surcharge'

[Commentary] Is Charter Communications, the big St. Louis-based cable company, gouging its customers? It sure seems like it.

Cable's sixth largest operator has begun itemizing the fees that it pays to local broadcasters for the privilege of retransmitting their signals to its subscribers. The monthly bills now going out show that Charter is paying around $1 a month for the broadcast signals. But it is charging customers $25 per month for the basic tier containing the signals.

And Charter is listing the broadcast fees in the "Taxes and Fees" section of its bills and calling it a "surcharge," suggesting that they are some kind of government-mandated fees rather than just another cost of doing business. That's more than a little misleading. Charter tries to explain the new fees on its website, but rather than clarifying matters it sinks deeper into the muck of its own misinformation. The broadcast signals "were historically made available to Charter at no cost, or low cost," the site says. True enough. But then it goes on to say that "the prices now demanded by broadcast stations have necessitated that we pass these costs on to customers." That's kind of a lie, too, isn't it? Who necessitated that they pass the costs along in the form of a special fee? It was not the "prices" or broadcasters. It was nobody other than Charter itself. Charter doesn't have to pass along the costs of retrans. It could absorb the costs and settle for a slightly lower margin. Or, it could make room in the budget for retrans by whacking other costs, perhaps some of those networks that nobody watches.

Broadcasters in markets where Charter operates -- St. Louis; Madison, Wis.; parts of North and South Carolina, much of Michigan and Montgomery, Ala., -- ought to make sure could demand that Charter reveal what it is paying for each of the other programming services, from ESPN on down. Broadcasters then will come out looking good. The 25 cents or so that Charter is paying each network affiliate will look like a bargain compared to what it's paying cable networks with far fewer viewers.

E-rate in a Broadband World

This week, the Commission released the text of an order that modernizes and upgrades the E-rate program to bring fast, affordable Internet access to schools and libraries across the country.

Despite the great success of the E-rate program to date, broadband connectivity in schools and libraries is too slow to keep up with the innovative high-tech tools that are now being used across the United States. In fact, the Commission conducted a survey which found that almost 80 percent of E-rate recipients believe their current Internet connections are not sufficient to meet their current needs. To begin to address this gap, the Commission's order will make it easier for schools and libraries to get the highest speeds for the lowest prices by increasing their options for broadband providers.

Minority Media Group to FCC: Give Net Neutrality Legislation Another Chance

David Honig, president and executive director of the Minority Media and Telecommunications Council, urged the Federal Communications Commission not to proceed with his regulatory proposals for broadband, but to instead give Congress another shot at passing network neutrality legislation during the upcoming lame duck session.

Honig's view is at odds with other watchdogs and several prominent Democratic lawmakers who have urged Chairman Genachowski to act following the collapse of last-minute legislative efforts. The minority media advocate backs enhanced network neutrality safeguards but opposes reclassifying broadband as a telecom service subject to stricter regulation. He contends that such a step would undermine opportunities for minority enterprises. "The tide is in favor of getting the legislation that almost crossed the finished line," he insisted.

The Alliance for Digital Equality (ADE), whose eclectic membership includes AT&T, Cisco, BET and the Communications Workers of America, seconded that emotion. In a statement, alliance chairman Julius Hollis said: "By calling for reclassification, fringe groups are simply out of touch with what our communities really need, and that's jobs and investment. We cannot allow them to hijack this debate, nor can we allow overregulation by the FCC to impede this goal."

Former FCC Chairman Kevin Martin's Dramatic Makeover

When Kevin Martin stepped down as chairman of the Federal Communications Commission in early 2009, many thought that his days as a force on regulatory issues were over. Today, he has re-emerged as a power broker, corralling significant opposition to the proposed $30 billion union of Comcast and NBC Universal, the first blockbuster communications deal to go before the Obama administration, which must decide whether to approve it.

As co-chairman of the technology practice at Patton Boggs, Washington's highest-grossing lobbying firm, Martin represents a half-dozen clients who are seeking to derail or heavily condition a joint venture that would create an entertainment juggernaut. Among the proposed entity's holdings: dozens of television networks and websites, including NBC, MSNBC, and CNBC; broadcast stations in 10 markets; Universal Studios and its library of several thousand films, its theme parks; and a sports arena. The stakes in the lobbying battle engulfing Washington couldn't be higher. In addition to worries about consumer choice and competition, on the line are the business model for accessing programming through the Web and network television's role in the Internet era. Perhaps more important, so is the template for the Obama administration's review of future communications mega-mergers. Martin's new role seems a natural fit, given his well-documented history of sparring with the cable television industry and in particular Comcast, already the nation's largest provider of cable and residential broadband service. But he is also raising eyebrows for his dramatic makeover that would impress even the most sophisticated image expert.

ONC studying risks of de-identified patient records

The Office of the National Coordinator has begun a study on how to overcome the privacy and security risks of using health information that otherwise has been stripped of its personal identifiers such as a patient's name and address.

One danger is that the data might be able to be re-identified through the use of additional records publicly available on the Internet, according to Dr. David Blumenthal, the national health IT coordinator. But health care experts say that the use of de-identified data is critical for tracking population health over time and for research purposes. ONC wants to come to a "consensus on what risk we can tolerate for identification and then what level of removal, what kinds of removal of information, are required to get to that level of risk," Blumenthal told a congressional hearing Sept. 30. But he did not provide further details. Dr Blumenthal and other health IT speakers spoke about the challenges of privacy and security of health information at a hearing of the House Committee on Science and Technology Committee subcommittee on technology and innovation.

FBI disrupts international cyber crime ring

The Federal Bureau of Investigation announced that it has disrupted an international ring of cyber criminals who together stole $70 million by using a Trojan horse virus.

According to the FBI, the thieves allegedly targeted small- to medium-sized companies, towns, churches and individuals by infecting their computers with malware that captured passwords, account numbers and other data used to log into online banking accounts. The group attempted to steal $220 million and ended up with $70 million from victims' bank accounts. Most of the accused hailed from Eastern Europe; many were based in Ukraine, where several worked as Web developers. Ten suspects were arrested in New York on Thursday, with another 10 having been arrested previously. The FBI is still seeking 17 others and released a wanted poster featuring their likenesses on Friday. The FBI worked closely with authorities from the United Kingdom, Netherlands and Ukraine to apprehend the suspects. A senior FBI official credited the international cooperation for bringing the suspects before a judge in Manhattan.