March 2011

NPR Should Get No More Taxpayer Funding: House GOP's Cantor

The congressional effort to end federal funding for NPR received new impetus after a video surfaced of an executive who was the public-radio network's top fundraising official when he made controversial remarks about Republicans, conservatives and the Tea Party movement.

House Majority Leader Eric Cantor (R-VA) said:
"As we continue to identify ways to cut spending and save valuable resources, this disturbing video makes clear that taxpayer dollars should no longer be appropriated to NPR. Not only have top public broadcasting executives finally admitted that they do not need taxpayer dollars to survive, it is also clear that without federal funds, public broadcasting stations self-admittedly would become eligible for more private dollars on top of the multi-million dollar donations these organizations already receive. At a time when our government borrows 40 cents of every dollar that it spends, we must find ways to cut spending and live within our means. This video clearly highlights the fact that public broadcasting doesn't need taxpayer funding to thrive, and I hope that admission will lead to a bipartisan consensus to end these unnecessary federal subsidies."

Consumer Reports/Consumer Federation Of America say poll supports FCC's new Network Neutrality rules

A new poll released by Consumers Union and the Consumer Federal of America found that a majority of respondents who said the Internet was important to them found practices like tiering service, paid prioritization, and service degradation "problematic."

The study also found that, by a margin of four to one, consumers wanted either Congress or the Federal Communications Commission to adopt policies to insure access. The report was released on the eve of the House Communications Subcommittee markup of a resolution that would invalidate the FCC's new network neutrality rules that, among other things, would prevent discriminatory access to services or applications.

Analyst: FCC Order Could Cripple ISPs, Fuel Customer Cannibalization

Former investment analyst Anna-Maria Kovacs will tell the House Communications Subcommittee on March 9 that the Federal Communications Commission's new network neutrality rules, which apply to Internet service providers but not Web application or content companies (like Google and Amazon), appear to be based on the belief that edge services are "embryonic," while the core network is "mature and static," an assumption that could wind up crippling ISPs, harm both sides and lead to force customer cannibalism.

Kovacas says that while transport is provided free by ISPs to applications providers, including content and service providers, those ISPs have to compete with them on the application level. "The Order restricts the carriers' flexibility in designing their business plans, limits their sources of revenue, dictates that they spend capital to expand their networks at the edge-providers' will, and forces them to subsidize competitors who cannibalize their customer base," says Kovacs, while leaving applications providers free to "transform their business plans at will." She plans to tell legislators that the order is essentially a transfer of wealth from ISPs to applications providers. She said that could cripple ISPS, "forcing them to subsidize competitors who cannibalize their customer base." But added that could also harm applications providers.

Network neutrality hearing preview: Dem memo

A House Communications Subcommittee staff memo notes Democrats' concerns about the network neutrality repeal process. The memo in advance of a March 9 and markup indicates they would prefer Republicans use a normal bill, rather than a Congressional Review Act resolution, to fight the regulations. (Democrats would prefer no repeal effort at all; they support the regulations). The GOP can block amendments on a resolution of disapproval, but not on ordinary legislation.

FCC's Genachowski: Market Analysis Was Integral To New Net Neutrality Rules

Federal Communications Commission Chairman Julius Genachowski says the FCC conducted economic analysis on net neutrality rules -- citing a number of graphs in the order -- and said he is keeping the Title II docket open because it is "an open, public process" launched less than a year ago "to consider the adequacy of the current legal framework within which the Commission promotes investment and innovation in, and protects consumes of, broadband Internet service," and does so "without proposing any particular agency action."

In a letter to House Commerce Committee leadership, Chairman Genachowski a market analysis was "an integral part of the Commission's effort to develop an open Internet policy..." The result, he maintained, had been a "light-touch" approach. He said the order also weighed the costs and benefits of the rules, and included input from Google. Facebook, Amazon, eBay and others that "the Internet's openness is a critical component of its contribution to economic growth." Those opposed to codifying the rules have also argued they are for openness, but say marketplace forces are a sufficient governor. Chairman Genachowski also argued that one of the keys to the order was ensuring small businesses can have open access to the 'net to create jobs and innovate and compete.

Chairman Fred Upton (R-MI), Communications and Technology Subcommittee Chairman Greg Walden (R-OR), and Vice Chairman Lee Terry (R-NE) replied:

"We share Chairman Genachowski’s goal to ensure the Internet remains open, which is exactly why we oppose the FCC’s decision to impose unprecedented government regulations on a currently thriving and open Internet. Over the last several months, the FCC has failed to provide a compelling justification for its power-grab. The analysis the FCC points to in its order does little more than summarize the comments of parties and provide conclusory statements. The committee will continue to scour the referenced text for a glimmer of legitimate analysis, but frankly we expect more from an ‘expert’ agency. The truth is imposing these rules will cause more harm than good by stifling innovation, investments and jobs."

AT&T's Cicconi to portray net neutrality as lesser of two evils

AT&T's top policy executive Jim Cicconi is schedule to testify before the House Communications Subcommittee on March 9. He's expected to portray network neutrality regulations as the lesser of two evils.

Industry saw the rules as preferable to more stringent regulations floated by the FCC and came to a compromise deal on net neutrality last year. AT&T and the cable industry group said they could tolerate the rules but saw them as unnecessary. Cicconi will note a desire by his company to have regulatory certainty and move past the debate that has consumed telecom policy for the past debate. Republicans have questioned why AT&T and NCTA are tolerating the regulations. They have also said the FCC backed industry into a corner on this issue by floating tougher "Title II" rules.

NCTA's McSlarrow Explains Support For Net Neutrality Order

National Cable & Telecommunications Association President Kyle McSlarrow said in a letter to the Hill that the association supports the Federal Communications Commission's new network neutrality rules -- ones he helped negotiate -- but primarily because they "largely" codify what cable operators already do, provide at least some measure of regulatory certainty, and beats the alternative of Title II classification.

"I believe the Order, reached after months of negotiation and compromise, represented a good faith effort on the part of Chairman Genachowski and his staff to accomplish those goals and avoid those risks," McSlarrow wrote.

McSlarrow offered four reasons NCTA supports the rules:

1) it largely codifies the status quo practices to which the industry has voluntarily committed;
2) it contains helpful clarifying language around such issues as what constitutes 'reasonable network management;'
3) it provides greater certainty about our ability to manage and invest in our broadband services today and those we may deploy in the future ; and
4) the alternative of Title II regulation (which had three likely FCC votes in support and was the only likely alternative), with the attendant risks of unbundling and rate regulation, presented a stark and much worse risk to continued investment and job creation."

McSlarrow suggested the regulations would not boost the economy or jobs, but would allow for continued investment, return on investment, and job creation. At best, if administered "modestly," and with "regulatory humility," he suggested, the regulations would "promote continued investment and job creation." But he also had a warning for the legislators. "if implemented and enforced in ways that are more expansive than the plain language of the Order supports, there could certainly be an adverse economic impact by chilling the willingness to deploy new services," he said. "Continued" was the operative word in all McSlarrow's responses about what the regulations would do, making the point that the industry would be doing these things without the regulations as well. He reiterated that he thought the rules were "a solution in search of a problem." Asked whether it as fair that the regulations apply to ISP's but not Web companies cable competes with, McSlarrow said it was better to have "a light regulatory touch for everyone in the Internet ecosystem, than a heavy and counterproductive regulatory regime on part or all of the Internet ecosystem."

CTIA: FCC Net Regulations Won't Boost Jobs or Economy

In a letter to the House Communications Subcommittee, Steve Largent -- head of wireless lobbying organization CTIA -- says that the Federal Communications Commission's new network neutrality rules won't boost the economy, increase jobs or investment, weren't necessary and were essentially the lesser of two evils. He does not believed the rules were necessary.

Asked whether it was equitable that the regulations apply to wireless but not to web companies, he refused to argue for regulating them. "CTIA does not believe that there need to be rules applied to the wireless industry," he said, "nor have we sought to impose regulation of this sort on others who are part of the broadband ecosystem." Asked whether he supported the FCC's order, of whether it was just better than the FCC's other proposals, he said that it was not necessary but, "we certainly view it as preferable to the Title II regulation advanced by some parties."

Free Press Slams Network Neutrality Resolution As 'Dangerous'

On March 9, Free Press Research Director Derek Turner is expected to tell the House Communications Subcommittee that his organization opposed the Federal Communications Commission's new network neutrality regulations, but it has no desire to see it overturned by House Republicans.

"While aspects of the rule may be flawed, any attempt to repeal it leaves Internet users fundamentally unprotected," Turner plans to tell the Subcommittee. "Members of this body may be uncomfortable with the precise contours of the FCC's rules," he said, which was something of an understatement when applied to the Republican leadership. They have unequivocally slammed the rules as regulatory overreach that will chill investment. He pointed out that Free Press itself had opposed the order, but because it felt the FCC had not gone far enough in protecting Internet openness. Turner says invalidating rules will "remove the FCC's current weak and industry-blessed rules and prevent the FCC from addressing the most blatant forms of discrimination and anti-competitive activities at any point in the future."

WCAI: Cell overages save money for consumers

Wireless Communications Association International, a wireless industry group, claims that extra wireless charges help save money for cell phone users.

In WCAI's own words, a new study "shows cellphone plan overages save consumers money." The group released a paper about fees on cell phone bills that appear when consumers talk or text more than their plan allows. When the wireless industry collects these charges, that saves money for consumers, according to the paper. WCAI didn't demand so much as a "thank you" for this service. Rather, it demanded the Federal Communications Commission abandon prospective regulations compelling wireless providers to alert consumers when they are about to surpass their monthly limits. The group -- which includes AT&T, Google, Sprint, and Clearwire, among others -- is more or less alone in publicly arguing that bill shock requirements are anti-consumer.

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