May 2011

Gov. Bev Perdue (D-NC) will neither sign nor veto a controversial broadband bill, meaning it will become law without her signature.

Gov Perdue on May 20 issued a statement critical of House Bill 129 but said the state needs “rules to prevent cities and towns from having an unfair advantage over providers in the private sector.” A veto would have been difficult to sustain in the Republican-controlled General Assembly. Salisbury won exemption for Fibrant from the legislation, which will limit how cities can operate and fund broadband systems in competition with private companies. Cable and phone companies worked for four years to pass the legislation. Gov Perdue issued her statement on the final day of her deliberation, after fielding thousands of pleas to veto or sign House Bill 129. The veto effort was largely a fight for towns like Chapel Hill and Fayetteville, which have spent money putting fiber in the ground but are not operational yet. In her statement, Gov Perdue said every school, household and business in North Carolina — no matter where they are — should have access to efficient and affordable broadband services.

“My concern with House Bill 129 is that the restrictions the General Assembly has imposed on cities and towns who want to offer broadband services may have the effect of decreasing the number of choices available to their citizens,” Gov Perdue said. “For these reasons, I will neither sign nor veto this bill. “Instead, I call on the General Assembly to revisit this issue and adopt rules that not only promote fairness but also allow for the greatest number of high quality and affordable broadband options for consumers.”

[Commentary] No political adage gets a more vigorous workout than the one about how the real scandal in Washington isn't what's illegal, but what's legal. Case in point: Meredith Attwell Baker's announcement that she will be stepping down as a Federal Communications Commission member in June to join Comcast-NBCUniversal. Baker's new employer, of course, is the huge entity whose merger was blessed by the FCC only in January, after a year of scrutiny. Baker voted in favor.

"The system is fundamentally flawed," says Andrew Schwartzman, policy director of the Washington-based Media Access Project. Thanks to the revolving door, "People attain expertise which is extremely valuable to the regulated companies and turn around and make that expertise available to them at the expense of the public." The incredible speed with which Baker is transforming herself from federal regulator back into corporate lobbyist underscores why regulation in Washington has become such a spavined, toothless beast. To be fair, Baker was not a monochromatically conservative regulator. Schwartzman says she bucked Republican orthodoxy on issues such as the development of low-power FM broadcasting and public access to unused TV broadcasting spectrum. But on more momentous issues she carried water for big business, often maintaining that regulators shouldn't do much regulating. Washington has always brimmed with young lawyers who take jobs with consumer regulatory agencies to gain a little training and seasoning before launching lucrative careers in corporate law. The only way to keep these ambitious greenhorns focused on the obligations of enforcement while they're in public service is for the leaders of their agencies to take those obligations seriously. When leaders like Baker signal that it's acceptable to cash in without even waiting for a decent interval, what hope is there that government will serve the public interest, not the corporate interest?

The Seattle-based nonprofit Reel Grrls is rejecting funding from Comcast after a spat over a tweet that was critical of the company.

A Comcast official in Washington state told Reel Grrls it would lose its $18,000 in funding after the group sent out a negative tweet about the company's decision to hire someone away from the Federal Communications Commission. The tweet questioned Comcast's decision to hire FCC Commissioner Meredith Attwell Baker, who voted to allow the merger of Comcast and NBC Universal earlier this year. Comcast apologized for the official's statement to the group and said on Thursday that it wanted to continue sponsoring it. But Reel Grrls spokeswoman Teresa Mozur on Friday said the nonprofit would not accept Comcast's donation and will be looking elsewhere for funds. "We appreciate Comcast’s desire to rectify this situation and hope to encourage them to craft a corporate policy that clearly defends freedom of expression in order to ensure that this situation does not arise again," Mozur said.

Two big new prize contests just getting under way take a page from the innovative, exciting competition run by Netflix.

In a nail-biting finish in the fall of 2009, the movie rental service paid $1 million to a global team of data mavens, who just edged out another group, in most improving its online film recommendations. The Netflix contest was celebrated as a triumph for the company and as a catalyst for bringing new techniques to data analysis. But in 2010, Netflix was forced to cancel a planned second prize because of privacy concerns. Two researchers showed that the supposedly anonymous data from the first contest could be used to identify customers. That eventually brought an inquiry from the Federal Trade Commission and a lawsuit. So Netflix shelved its plans for a second contest.

Earlier this month, Overstock.com, an online retailer, announced it would sponsor a $1 million contest to the person or team that could most improve its product recommendations. And a few weeks earlier, the Heritage Provider Network, a medical group in California, released the data and the details for its $3 million contest. Its prize will go to the team that comes up a technique for most accurately predicting which patients will be admitted to hospitals in the next year. Both contests, like the Netflix competition, require contestants to come up with predictive algorithms, using anonymized personal data as the test bed. So how to avoid a Netflix-style privacy blowup in the new contests?