May 2011

BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, MAY 25, 2011

Spectrum and Cybersecurity on today's agenda http://benton.org/calendar/2011-05-25/

AT&T
   Senators question AT&T about overbilling
   Public Knowledge questions AT&T's special-access claim
   Key House Dem wary of members 'demagoguing' on AT&T merger
   Leap Wireless opposes AT&T bid to buy T-Mobile
   AT&T Staffs Up For Legal Battle Over Merger

SPECTRUM/WIRELESS
   FCC Likely to Stay Neutral on Wireless Competition
   Re-Auction of the D Block: A Review of the Arguments
   Commerce's NTIA Announces New Commerce Spectrum Advisory Committee Members
   Sprint: It’s Becoming the “Other Mobile Network” - analysis
   Technology Policy Institute Panel Discusses Spectrum Incentive Auctions
   Dialing Up the Phone War [links to web]

TELEVISION
   Rep Pitts pitches value of broadcast television to FCC chair [links to web]
   Hazlett Essay Rips Broadcasters
   Parents group targets Billboard performance by Rihanna, Britney Spears
   Sen. Sanders: Satellite Should Not Be De Facto Cable Competition [links to web]
   Big Gaps in Broadcaster's Multiplatform TV Efforts [links to web]

PRIVACY
   Why Privacy Matters Even if You Have 'Nothing to Hide' - op-ed
   Big brother Inc - op-ed [links to web]

MEDIA OWNERSHIP
   Dick Ebsersol's exit from NBC sends signal to rest of company
   Comcast makes rare public relations misstep in Baker hire

INTERNET/BROADBAND
   Seattle bringing fiber-optic broadband to Pioneer Square [links to web]
   House Judiciary Considers Taxes on Digital Goods

HEALTH
   Health IT Tops Jobs List For College Grads

GOVERNMENT & COMMUNICATIONS
   Sarkozy questions 'neutral' Internet at e-G8 forum
   Journalism at Risk [links to web]
   OMB to cut two transparency programs, suspend others
   What The Feds Can Teach Businesses About Telework [links to web]

LOBBYING
   And now ... a friendly message from your local member of Congress
   AT&T Staffs Up For Legal Battle Over Merger

MORE ONLINE
   San Francisco Tech Companies Get a Tax Break [links to web]
   Army Seeks Recruits in Social Media [links to web]

STORIES FROM ABROAD
These headlines presented in partnership with:

   EU Lays Out New Plans on Piracy, Music Rights [links to web]
   France Telecom bullish after 4G auction cap [links to web]
   EU Effort Underway to Ban 'Harmful' Wi-Fi For the Children [links to web]
   Telecom NZ, Enable Networks secure remainder of UFB contracts [links to web]
   Austrian FTTH operator Xlink offers 10 Gbps broadband [links to web]

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AT&T

IS AT&T OVERBILLING
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Sens Amy Klobuchar (D-MN) and Herb Kohl (D-WI) wrote AT&T Chief Executive Randall Stephenson asking a series of questions about its billing practices and a lawsuit alleging the wireless giant systematically overcharged smart phone customers. AT&T has disputed allegations by customer Patrick Hendricks, who filed his class-action suit in the U.S. District Court of Northern California. According to Hendricks, AT&T systematically overstates Web server traffic for smart phone users by 7 to 14 percent. He hired an independent consulting firm to study billing of AT&T customers, according to the suit. Sens Klobuchar and Kohl asked AT&T to respond to the charges. It also asked for the company to specify how it ensures the accuracy of bills and to provide an estimate of how many errors occur in their charges for data and other services. They asked how many people exceed their monthly data caps and the amount such customers are billed for excess data usage during the three months preceding the date of this letter.
“The answers to these questions will be important as we consider competition in the cellphone industry, including the proposed AT&T/T-Mobile merger,” the lawmakers wrote. “And, whatever the validity of the allegations of overcharging, our goal is to ensure going forward that consumers can have confidence that their bills for data service are completely accurate and reliable.”
benton.org/node/67132 | Washington Post | The Hill | ars technica
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AT&T/T-MOBILE AND SPECIAL ACCESS
[SOURCE: The Hill, AUTHOR: Sara Jerome]
AT&T alleged last week that its merger with T-Mobile will have no impact on the special-access market, a claim that was immediately viewed as suspect by wireless providers who buy access to AT&T's wireline network as a critical component in connecting cell phone calls. Sprint, T-Mobile and public advocates have traditionally argued that AT&T overcharges for special access. The Federal Communications Commission (FCC) is considering action on the issue, and House Democrats see AT&T's special-access rates as a critical barrier to maintaining a healthy wireless market.
Public Knowledge legal director Harold Feld, a longtime advocate on the special-access issue, had several counterpoints to AT&T's argument:
"Two things. One, it's a multiplier effect on the harm to competition. The merger disadvantages Sprint (and other competitors except Verizon) not only because AT&T's market share increases, but because the increase works synergistically with all of AT&T's other advantages, including special access. Second, special access is a different market from a usual market because AT&T doesn't want to sell special access. They are required to do it by law. That's why the usual argument 'but of course we would never hurt our special access customers, that would be bad for business' argument is false. AT&T doesn't want special access customers. But they are required to offer their special access services at just and reasonable rates, so they grudgingly do so."
benton.org/node/67062 | Hill, The | AT&T
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MERGER DEMAGOGUING?
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Rep. Mel Watt (D-NC), the ranking member of the House Judiciary Competition subcommittee, is wary about members of Congress getting too hotheaded about the AT&T merger with T-Mobile. He believes Congress has the role of educating the public but should stop short of trying to influence the review of a merger: "To the extent people start to feel like we should be making the decision about how to apply the antitrust laws, that's overstepping congressional authority." "It's not our job to be out there to be demagoguing on one side or the other," he said.
benton.org/node/67128 | Hill, The
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LEAP WIRELESS OPPOSES AT&T/T-MOBILE
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Leap Wireless said that it opposes AT&T’s $39 billion bid for T-Mobile, saying the merger would harm consumers because it would reduce competition and put too much power into the hands of just two wireless carriers. Specifically, the company points out that about 90 percent of pre-tax earnings for the wireless industry would go to AT&T and Verizon Wireless. That would leave smaller regional carriers such as Leap with a harder time competing against those giants in buying more spectrum for future broadband networks. It would also give them a harder shot at attracting the best partnerships with companies such as Apple for the iPhone. The remarks come before a second congressional hearing on the merger.
benton.org/node/67069 | Washington Post
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AT&T STAFFS UP
[SOURCE: National Journal, AUTHOR: Josh Smith]
AT&T has already dropped some significant cash in its effort to gain approval for its merger with T-Mobile, and documents filed recently at the Federal Communications Commission indicate it plans to spend even more. According to a confidentiality agreement filed at the FCC, AT&T has hired at least 71 legal experts and consultants to help with the merger process. That number includes in-house counsel as well and lawyers and consultants from a range of outside firms. Among the firms that AT&T has hired are Arnold & Porter, Crowell & Moring, Sidley Austin, WilmerHale, the Brattle Group, and Compass Lexecon. On the lobbying side, AT&T has also been on a hiring spree, tapping lobbyists at firms such as Peck, Madigan, Jones, & Stewart, Roberti Associates, and Capitol City Group, among others.
benton.org/node/67053 | National Journal |
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SPECTRUM/WIRELESS

FCC WIRELESS COMPETITION REPORT
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz]
Apparently, the Federal Communications Commission is expected to take a neutral position on whether the wireless industry is competitive in a coming report on the mobile market. The FCC's latest assessment of competition in the wireless industry is likely to be closely read by industry observers hoping to find clues as to how the agency will rule on AT&T's proposed $39 billion deal to acquire T-Mobile USA from Deutsche Telekom AG. The FCC and the Justice Department are reviewing the deal.
The FCC's annual report on competition in the wireless industry, which could be released next month, is expected to conclude—as it did last year—that the wireless-phone market has grown more concentrated over the years. But the agency will remain neutral on whether the wireless industry is competitive, sources said.
Prior to 2010, the FCC found that the mobile-phone market was "effectively competitive" and more rules or regulations weren't needed to protect consumers and smaller competitors.
benton.org/node/67151 | Wall Street Journal
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D BLOCK AUCTION
[SOURCE: Phoenix Center, AUTHOR: George Ford, Lawrence Spiwak]
The authors explore the arguments supporting re-auction of the D Block for commercial use, and demonstrate that both the economics and prior history bear out significant problems with such a policy approach.
First, a re-auction of the D Block is unlikely to generate $3 billion in revenues. Statistical analysis of auction data indicates that a 10 MHz block of spectrum in the 700 MHz band must be unencumbered to produce $3 billion in revenues. However, it is important to recognize that the FCC's National Broadband Plan envisions a number of significant encumbrances on any re-auction of the D Block which have substantially reduced auction revenues in the past.
Second, regardless of the total amount received from a re-auction, the re-auction of the D Block does not fully fund the public safety network -- not even close. A nationwide public safety network is expected to cost about $10 to $13 billion. Even if a re-auction of the D Block did bring in $3 billion of revenues, it offsets only about one quarter of the public safety network's cost. The D Block re-auction offers no other mechanism by which to generate funds for the remaining network construction and operating costs. To date, the only credible proposal that could provide sufficient spectrum to alleviate the looming spectrum exhaust and provide significant auction revenue sufficient to cover the cost of building a public safely network and have money left over for deficit reduction is the notion of voluntary incentive auctions to repurpose unused broadcast spectrum.
Finally, the potential broader adverse market effects of a D Block re-auction. The evidence indicates that the public safety community needs a full 20 MHz of spectrum. If so, then the additional 10 MHz must be obtained from either future spectrum assignments or burdensome public safety encumbrances on commercial spectrum. A new block of spectrum will not be contiguous to the PSB Block, which has the effect of increasing the deployment cost of the public safety network by an estimated $4 billion relative to the D Block assignment. This assignment also has the potential of frustrating the creation of contiguous blocks of spectrum for future auctions, thereby substantially reducing subsequent auction revenues. Filling the public safety spectrum shortage with public safety obligations on all commercial providers could also substantially reduce future auction revenues. Thus, even under the rosiest of scenarios ($3 billion in revenues), the auction of the D Block flunks the cost-benefit test.
benton.org/node/67027 | Phoenix Center
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NEW SPECTRUM ADVISORY COMMITTEE MEMBERS
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Press release]
The Department of Commerce's National Telecommunications and Information Administration (NTIA) announced the appointment of a diverse group of experts from outside the Federal government, including the nonprofit and private sectors, for a two-year term to the Commerce Spectrum Advisory Committee (CSMAC). Committee members will provide advice and recommendations on a broad range of spectrum policy issues with the goal of strengthening the U.S. global leadership role in wireless technology services and innovation while supporting the country’s homeland security, national defense, and other critical government missions. In particular, the CSMAC will advise NTIA on how best to execute President Obama's initiative to nearly double the amount of commercial spectrum available over the next decade to support the growing demand by consumers and businesses for wireless broadband services. In addition to the CSMAC, NTIA receives spectrum management and policy advice from Federal government experts through the Interdepartment Radio Advisory Committee (IRAC).
The new co-chairs of the Committee will be Dr. Brian Fontes, Chief Executive Officer of the National Emergency Number Association, and Dr. Gregory Rosston, Deputy Director of the Stanford Institute of Economic Policy Research. Members include the New America Foundation's Michael Calabrese, former White House aide Susan Crawford, former FCC Commissioner Harold Furchtgott-Roth, Prof Dale Hatfield, and former FCC staffer Robert Pepper.
benton.org/node/67145 | National Telecommunications and Information Administration | members | member bios
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SPRINT: THE OTHER NETWORK
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
[Commentary] Sprint is in a contradictory position. There are multiple companies relying on it to provide 3G coverage for their 4G or even 3G networks, while its CEO is testifying before the Senate that it will likely cease to exist if AT&T succeeds in buying T-Mobile, the nation’s fourth largest carrier. The AT&T buy would cement AT&T and Verizon as the largest mobile operators and leave Sprint with a mere 18 percent of the nation’s subscribers. However, as the only viable alternative to the top two players, Sprint could see its fortunes rise as other companies trying to force their way into the mobile broadband game. Plus, as it announces its 4G plans (and yes, it’s going to have to move to LTE especially since Clearwire is planning its move to LTE) it may become a key roaming partner for other operators. Sprint did once tell me it wanted to become a true wholesaler back when it was optimistic about its partnership with Clearwire, so maybe it’s dreams may finally come true as consolidation eats away at competition in the industry.
benton.org/node/67125 | GigaOm
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TPI SPECTRUM EVENT
[SOURCE: BroadbandBreakfast.com, AUTHOR: Rahul Gaitonde]
The Technology Policy Institute assembled auction experts to discuss the value and mechanics of proposed spectrum incentive auctions.
“Markets work best when there are rules for the market players to act within,” said Peter Cramton, Professor of Economics, University of Maryland. “Increasingly people are getting their television service through cable and satellite making the mobile broadband market a much more valuable use for the spectrum currently held by television broadcasters.” Voluntary incentive auctions would allow current spectrum owners to auction of part or all of their spectrum holdings and obtain a part of the proceeds. Cramton said that any auction would allow for three possible actions on the part of the broadcasters; keep their entire spectrum holdings, sell a portion of their holdings or sell their entire holdings. According to Cramton many broadcasters could sell half their holdings and still maintain a robust broadcast area. Using multicasting technology, broadcasters could share a single channel allowing them to transmit up to two high definition signals or five standard definition signals.
benton.org/node/67055 | BroadbandBreakfast.com
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TELEVISION

HAZLETT RIPS BROADCASTERS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Former-Federal Communications Commission Chief Economist Tom Hazlett has written paper arguing that television broadcasting needs to be de-regulated -- mostly so that it can fall of its own weight. He writes that the broadcast TV system is "a needless expense, propped up not by customer demand, technical efficiency, or business necessity, but legacy regulation generations outdated." He said the opportunity cost of allocating 49 channels to broadcasting is an estimated $1 trillion in social welfare. "[P]rotecting broadcast TV in a world where "broadcast TV" is already an anachronism and video programs are themselves fleeing to new media is not a good way for the government to support the emerging markets of the 21st Century." The paper was sponsored by the American TV Alliance whose members include cable operators, satellite operators, and others seeking reforms to the retransmission system they say benefits broadcasters to the detriment of cable operators and their customers.
benton.org/node/67057 | Broadcasting&Cable
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PTC VS DISNEY
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
The Parents Television Council is protesting what they term an "explicit" performance by pop artists Rihanna and Britney Spears on the May 22 broadcast of the Billboard Music Awards on ABC. The watchdog group is asking members to contact parent company Disney about the opening act of the 8 pm (Eastern) broadcast, which featured both singers performing Rihanna's song "S & M" while wearing bondage-style outfits and dancing on poles. The singers also staged a pillow fight and shared a brief kiss at the song's conclusion.
benton.org/node/67064 | Hill, The
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PRIVACY

WHY PRIVACY MATTERS
[SOURCE: Chronicle of higher education, AUTHOR: Daniel Solove]
[Commentary] The problem with the nothing-to-hide argument is that it myopically views privacy as a form of secrecy. In contrast, understanding privacy as a plurality of related issues demonstrates that the disclosure of bad things is just one among many difficulties caused by government security measures. Government information-gathering programs are problematic even if no information that people want to hide is uncovered.
One such harm, for example, which I call aggregation, emerges from the fusion of small bits of seemingly innocuous data. When combined, the information becomes much more telling. By joining pieces of information we might not take pains to guard, the government can glean information about us that we might indeed wish to conceal. For example, suppose you bought a book about cancer. This purchase isn't very revealing on its own, for it indicates just an interest in the disease. Suppose you bought a wig. The purchase of a wig, by itself, could be for a number of reasons. But combine those two pieces of information, and now the inference can be made that you have cancer and are undergoing chemotherapy. That might be a fact you wouldn't mind sharing, but you'd certainly want to have the choice.
Another potential problem with the government's harvest of personal data is one I call exclusion. Exclusion occurs when people are prevented from having knowledge about how information about them is being used, and when they are barred from accessing and correcting errors in that data. Many government national-security measures involve maintaining a huge database of information that individuals cannot access. Indeed, because they involve national security, the very existence of these programs is often kept secret. This kind of information processing, which blocks subjects' knowledge and involvement, is a kind of due-process problem. It is a structural problem, involving the way people are treated by government institutions and creating a power imbalance between people and the government. To what extent should government officials have such a significant power over citizens? This issue isn't about what information people want to hide but about the power and the structure of government.
A related problem involves secondary use. Secondary use is the exploitation of data obtained for one purpose for an unrelated purpose without the subject's consent. How long will personal data be stored? How will the information be used? What could it be used for in the future? The potential uses of any piece of personal information are vast. Without limits on or accountability for how that information is used, it is hard for people to assess the dangers of the data's being in the government's control.
benton.org/node/67118 | Chronicle of Higher Education
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MEDIA OWNERSHIP

EBSERSOL EXIT SENDS MESSAGE
[SOURCE: Los Angeles Times, AUTHOR: Joe Flint]
The abrupt departure of Dick Ebersol as chairman of NBC Sports Group sent shockwaves through the network and the media industry. It also sent a not-so-subtle message to other top NBCUniversal executives: Get with the program or hit the road. Almost from the day Comcast closed on NBC Universal, media watchers were wondering how the cable giant would adjust to some of the bigger personalities it was inheriting. Although Comcast is no stranger to entertainment -- it owns the cable network E!, which means it's in business with the Kardashians -- it prefers that the executives who run the company keep low profiles and let the work speak for itself. Ebersol, who has been associated with NBC for almost 40 years and whose influence extended far beyond the world of sports, is anything but low profile. Ebersol's new Comcast bosses did not have that history and viewed him as something of a know-it-all. Although his prowess as a producer was not questioned, his willingness to be a team player was.
benton.org/node/67067 | Los Angeles Times
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COMCAST PR MISSTEP
[SOURCE: Los Angeles Times, AUTHOR: Joe Flint]
Comcast Corp. was masterful when it pushed its acquisition of NBCUniversal through regulators and lawmakers. The cable giant successfully argued that a combination of the nation’s largest cable and broadband provider with a content behemoth whose holdings include a movie studio, a broadcast network and numerous cable channels was no real threat to competition to other programmers and distributors despite lots of opposition from consumer advocacy groups, the creative community and even a few members of Congress. While there were lots of conditions put on Comcast by the Federal Communications Commission and Justice Department in return for approval, most were ones that Comcast itself advocated. Like the kid who tells his parent how he should be disciplined, Comcast came to Washington with a list of what it would agree to do if the deal was approved and the FCC and Congress basically said that sounded good to them and signed off on the merger. That’s why Comcast’s recent stumble in the hiring of FCC Commissioner Meredith Attwell Baker as a lobbyist is so surprising. Did Comcast not think there would be any blowback to hiring a regulator who just four months earlier voted to approve its purchase of control of NBCUniversal? Ideally, there is a little bit of a waiting period before one goes from lawmaker to lobbyist. By jumping to Comcast so soon after voting to approve its merger with NBCUniversal, Baker raised eyebrows and gave those already wary about the intersection of government and business more to be cynical about.
benton.org/node/67066 | Los Angeles Times
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INTERNET/BROADBAND

DIGITAL GOODS AND SERVICES TAX FAIRNESS
[SOURCE: BroadbandBreakfast.com, AUTHOR: Joshua Peterson]
The House Judiciary Committee's Subcommittee on Courts, Commercial and Administrative Law held a hearing on a bill that would define limits on taxes for virtual goods and services on the Internet. Full Committee Chairman Lamar Smith (R-TX) sponsored the proposed legislation, known as the “Digital Goods and Services Tax Fairness Act of 2011.” The measure aims to “promote neutrality, simplicity, and fairness in the taxation of digital goods and digital services.” The legislation would restrict taxing authority to the jurisdiction of the customer’s tax address. Witnesses Robert Atkinson, President of the, D.C.-based Information Technology & Innovation Foundation (ITIF), and James Eads, Jr., Director of Public Affairs for Ryan, LLC, supported the proposed legislation.
benton.org/node/67060 | BroadbandBreakfast.com
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HEALTH

HEALTH IT LOOKS LIKE GOOD JOB
[SOURCE: InformationWeek, AUTHOR: Nicole Lewis]
A career in health information technology (IT) is the hottest vocation for college graduates in this challenging economy, according to a study from the University of California San Diego Extension. The study, released last week, shows that health IT ranks first among the top ten careers listed and is described as a profession in which technicians update and organize medical information electronically. The report credits the federal government's health IT initiatives that have spurred the adoption of advanced technology systems that manage and use health information. As healthcare delivery organizations embark on transferring patient records from paper-based systems to digitized medical records, the shift has fueled a demand for health information technicians who can oversee the growth of a comprehensive database of medical records during the next decade.
benton.org/node/67026 | InformationWeek
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GOVERNMENT & COMMUNICATIONS

E-G8
[SOURCE: BBC News, AUTHOR: Iain Mackenzie]
Critics have claimed that the e-G8 is too focused on handing Internet control to companies and governments. Addressing those concerns, French President Nicolas Sarkozy said that states were subject to the will of their citizens who were currently engaged in a revolution, empowered by the Internet. "The global revolution that you incarnate is a peaceful one. It did not emerge on battlefields but on university campuses," he said. However, President Sarkozy claimed that countries could not remain neutral and allow completely unchecked Internet use. "The world you represent is not a parallel universe where legal and moral rules and more generally all the basic rules that govern society in democratic countries do not apply."
benton.org/node/67051 | BBC News | Bloomberg | FT | ars technica
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CUTS IN TRANSPARENCY PROGRAMS
[SOURCE: nextgov, AUTHOR: Joseph Marks]
Two transparency initiatives and numerous improvements to open government programs will be scrapped as a result of a 75 percent funding cut lawmakers agreed to in April to avert a federal shutdown, officials said. Federal Chief Information Officer Vivek Kundra's office will cancel Fedspace, a collaborative site where government officials could network and share thoughts, concerns and best practices related to technology projects, according to a letter Kundra sent to Sen Tom Carper (D-Delaware), chairman of the subcommittee on Federal Financial Management. Kundra's office will also stop work on a planned citizen-services dashboard, which would have gathered and posted their feedback on federal websites and other Web-based services, the letter said. The letter was in response to correspondence Carper sent Kundra in April seeking details about the likely cuts. The government's most visible and popular transparency initiatives will stay in operation, such as USAspending.gov, which tracks government spending on contracts, and the IT Dashboard, which details spending on information technology projects. But planned improvements will be put on hold.
benton.org/node/67123 | nextgov
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LOBBYING

NAB DELIVERS MEMBERS OF CONGRESS
[SOURCE: The Hill, AUTHOR: Sara Jerome]
When Rep. Steve Cohen (D-TN) stares out from the television to tell his constituents to lead a heart-healthy lifestyle, he is, strangely enough, being lobbied by one of the most powerful interest groups in Washington. On a morning in May, Rep Cohen heads to a makeshift studio on Capitol Hill set up by the National Association of Broadcasters (NAB), where makeup artists poke at his face before assistants usher him into a video production room. The final product is a public service announcement that will air on television stations in Cohen’s district, reminding viewers to make healthy choices — and, of course, reminding them who their friendly, health-conscious congressman is. The other important product is good will for the NAB, which pays for production and comps the airtime via member stations. NAB spokesman Dennis Wharton says the PSA campaign is an important tradition for over-the-air radio and television stations that feel a responsibility, as members of local communities, to help spread positive messages. “We have the franchise on localism,” he said. The takeaway for lawmakers is positive publicity. This year, the NAB gave lawmakers the chance to take a stand on some important topics, largely of the universally palatable variety.
benton.org/node/67058 | Hill, The
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