July 2011

Regulation and Independent Regulatory Agencies

America's free market is the greatest force for prosperity the world has ever known. It is the key to our global leadership and the success of our people. But throughout our history, one of the reasons it has worked is that we have sought a proper balance -- a balance that promotes economic growth, innovation, competitiveness, and job creation, while protecting the health, safety, and security of the American people. Over the past two and a half years, the pursuit of that balance has guided my Administration's approach to rules and regulations. And in January of this year, I signed an Executive Order requiring executive agencies to reduce regulations that place unnecessary burdens on American businesses and the American people while ensuring that regulations protect our safety, health, and environment. I initiated a careful, Government-wide review of regulations already on the books in order to reduce outdated, unjustified regulations that stifle job creation and make our economy less competitive.

We are taking immediate steps to eliminate millions of hours in annual paperwork burdens for large and small businesses and save more than $1 billion in annual regulatory costs. And hundreds of reform proposals from 30 agencies, now available for public scrutiny, promise to deliver billions of dollars in additional savings. The Executive Order also requires executive agencies to consider costs and benefits and to reduce burdens on the American people; to expand opportunities for public participation; to simplify and harmonize rules; and to promote flexibility and freedom of choice.

With full respect for the independence of your agencies, I am asking you today to join in this review and produce your own plans to reassess and streamline regulations. For rules going forward, I am also asking you to follow the key cost-saving, burden-reducing principles outlined in the January Executive Order. I hope you see this as an opportunity to do something big and lasting -- to change the ways of Washington; to focus on what works; and to forge a 21st-century regulatory system that makes our economy stronger and more competitive, while we meet our fundamental responsibilities to one another. I look forward to working with all of you on this important initiative, and I thank you for your attention and service to our country.

California PUC should approve merger of AT&T and T-Mobile

[Commentary] California boasts most of the world's foremost technology companies and is a leader in consumer adoption of wireless services. As such, it has a profound interest in the continued health and rapid growth of the mobile ecosystem -- perhaps the one bright spot in the national economy. As the California Public Utilities Commission (CPUC) begins its investigation of AT&T's proposed acquisition of T-Mobile, the commissioners should review the Federal Communications Commission's just-released annual report on wireless competition.

The 300-page report offers a mountain of carefully compiled data on the mobile industry. Nearly all of it points to the conclusion that the merger would benefit California consumers and companies. Indeed, a fair reading of the report's key findings suggests the deal is essential to keep the mobile revolution fully charged. The proposed merger would alleviate many government-created problems. AT&T has committed to combine T-Mobile's spectrum holdings with its own to build a nationwide 4G LTE network to compete with Verizon's. (In California, 98 percent of the population will have access to the new LTE network.) T-Mobile's infrastructure, at the same time, would be integrated, alleviating constraints for both companies' current 3G customers. In the end, the FCC couldn't reach a definitive conclusion on the state of mobile competition. Perhaps that's because the nature of mobile services and the sources of competition are expanding and changing too quickly to really say who has leverage over whom. But it is clear that consumers are the real change agents here. That's a sign of a healthy and vital ecosystem. The CPUC should emulate the FCC's modesty and proceed quickly with its approval of the merger. Given the challenges providers already face -- many of them the unintended consequences of slow regulatory change -- the last thing Californians needs is more interference.

[Downes and Manne are adjunct fellows with TechFreedom]

Dish Opposes AT&T/T-Mobile

On July 7, DISH Network met with the Federal Communications Commission's Wireless Telecommunications Bureau Chief, Rick Kaplan, to discuss AT&T's proposed acquisition of T-Mobile. During the meeting, DISH Network stated its opposition to the AT&T-T-Mobile merger, which would harm competition and consumers by, among other things, potentially discouraging DISH Network from entering the market to provide mobile broadband.

FCC Seeks Input on NCTA Crossownership Petition

On June 21, 2011, the National Cable and Telecommunications Association (NCTA) filed a petition for declaratory ruling and a conditional petition for forbearance. In both petitions, NCTA seeks to limit or prevent the application of section 652 of the Communications Act of 1934 to mergers and acquisitions between cable operators and certain competitive local exchange carriers (LECs). (Section 652 places cross-ownership restrictions on certain transactions.)

Specifically, NCTA asks the Federal Communications Commission to clarify that section 652 does not restrict transactions between cable operators and competitive LECs. If the FCC decides that section 652 does apply to such transactions, NCTA seeks forbearance from this restriction or, in the alternative, from the section 652(d)(6)(B) requirement that the relevant local franchising authorities approve of such waiver. Finally, if the FCC declines to grant the petitions, “NCTA requests that the Commission establish substantive standards and time limits to facilitate expeditious consideration of waiver requests, including standards that apply to LFAs.”

Parties may file comments on either or both petitions on or before August 22, 2011 and reply comment on or before September 21, 2011. All pleadings should reference WC Docket No. 11-118.

'Huge Media Merger' Among Montgomery Stations

Three stations in Montgomery, Alabama are sharing resources to make for what the trio calls "an unmatched television powerhouse of stations."

Bahakel Communications' CBS affiliate WAKA joins with CW affiliate WBMM, which Bahakel is acquiring from SagamoreHill Broadcasting, and SagamoreHill's ABC affiliate WNCF in what it calls a "time sales and shared services agreement." The trio will be based in the current home of WNCF and WBMM next year. Montgomery is DMA No. 117. Raycom's WSFA is a big market leader there.

What Groupon knows about its subscribers

In the wee hours of July 10, Groupon informed users of some potentially big changes to its privacy policies while providing additional details about the data it collects from subscribers and how it uses the info.

One item of particular interest is the Groupon software app for mobile phones that’s become more widely used since the company recently introduced GrouponNow deals targeted to users based on their location rather than a once-a-day e-mail blast. If you've downloaded the app, you’re opening the door for Groupon to collect information about your whereabouts. According to the statement sent to users, which was first reported by the Wall Street Journal blog All Things Digital: “In short, if you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you.”

Smartphone Adoption and Usage

In its first standalone measure of smartphone ownership, the Pew Internet Project finds that one third of American adults – 35% – own smartphones.

The Project’s May survey found that 83% of US adults have a cell phone of some kind, and that 42% of them own a smartphone. That translates into 35% of all adults.
Our definition of a smartphone owner includes anyone who falls into either of the following two categories:

One-third of cell owners (33%) say that their phone is a smartphone.
Two in five cell owners (39%) say that their phone operates on a smartphone platform (these include iPhones and Blackberry devices, as well as phones running the Android, Windows or Palm operating systems).

Several demographic groups have high levels of smartphone adoption, including the financially well-off and well-educated, non-whites, and those under the age of 45. Some 87% of smartphone owners access the Internet or email on their handheld, including two-thirds (68%) who do so on a typical day. When asked what device they normally use to access the Internet, 25% of smartphone owners say that they mostly go online using their phone, rather than with a computer. While many of these individuals have other sources of online access at home, roughly one third of these “cell mostly” Internet users lack a high-speed home broadband connection.

NHL Hands Extensive Ad Sales Responsibilities Over To NBCU

NBC Sports Group has struck a wide-ranging advertising deal with the National Hockey League that gives the Comcast-owned network oversight of the teams’ national sales.

The agreement builds on April’s deal that extends media rights for league games for 10 more years. Unlike the programming rights contract, which has been estimated to be worth about $2 billion, the new ad sales deal is limited to the next five years. All NHL games airing across NBC, Versus as well as online properties NBCSports.com, the NHL Network, NHL mobile, and all official NHL digital sites, including NHL.com -- will be sold by the NBC Sports Group Sales Department. The deal also includes shifting an unspecified amount of NHL media sales staffers over to NBC. In addition to offering more control and greater opportunities for cross-platform sales, NBC will also get an instant traffic boost when exhibition games start up in September and the regular play begins the month after. Specifically, all traffic generated by official NHL digital sites, including NHL.com, will now be attributed to NBC Sports Digital. On top of the cross-platform opportunities, the addition of NHL ad sales duties can be expected to strengthen NBCU’s hand as it works to expand its reach to marketers for its other sports broadcasting, including The Golf Channel, upcoming Sunday Night Football games, the Super Bowl and the Olympics (which the network has through 2020), not to mention its 11 regional sports networks.

Chairman Genachowski's Response to Members of Congress Regarding Universal Service Reform

In February 2011, Sens Frank Lautenberg (D-NJ), Bill Nelson (D-FL), and John Kerry (D-MA) wrote to Federal Communications Commission Chairman Julius Genachowski about FCC efforts to modernize and rationalize the Universal Service Fund (USF), including the effort to bring affordable broadband to all Americans and shifting away from subsidizing traditional telephone service. Specifically, the Senators noted that their states and other face a large disparity between contributions and receipts that has existed for many years. "As currently contemplated," they wrote, "the FCC's USF reform proposals do not adequately take this disparity into account and propose how to reduce it."

In June, Chairman Genachowski replied saying the FCC is trying to control the USF contribution burden by eliminating waste and inefficiency, ensuring accountability, and requiring fiscal responsibility. He noted that intercarrier compensation reform may also result in more equitable contributions.

Chairman Genachowski Implementation of the Local Community Radio Act of 2010

On March 14, 2011, Reps Greg Walden (R-OR) and Lee Terry (R-NE) wrote Federal Communications Commission Chairman Julius Genachowski with concerns about implementation of the Local Community Radio Act of 2010.

The interpretation in question argues that the FCC must take into account the number of existing on-air or authorized FM translator stations when processing applications for new translator stations. Such an interpretation would have the result of favoring the licensing of new, low-power radio stations over the licensing of new FM translator stations. in direct violation of section 5(3) of the Local Community Radio Act, which states that "FM translator stations, FM booster stations, and low-power FM stations remain equal in status." The Local Community Radio Act should not, the Congressmen wrote, be used to delay the processing of existing applications for new FM translator stations. It simply requires the FCC to ensure that "licenses are available to PM translator stations, PM booster stations, and low-power FM stations."

On June 20, 2011, Chairman Genachowski replied saying, "Commission staff is currently evaluating the existing policy for processing FM translator applications in light of the LCRA directive to ensure that licenses are available to both FM translator stations and LPFM stations. The next formal step is for the Commission to issue a Notice of Proposed Rulemaking to examine this and other provisions of the LCRA."

Benton

Search