August 1, 2011 (A Debt Ceiling Deal?)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, AUGUST 1, 2011
Get updates throughout the day through Benton's Twitter feed @benton_fdn
BUDGET
Obama and Leaders Reach Debt Deal
New Senate Bill Drops Spectrum Auction Language
US Treasury has less cash on hand than Apple [links to web]
Debt Debate Coverage Focuses on Obama - research [links to web]
UNIVERSAL SERVICE
AT&T, Verizon and other price cap carriers send broadband USF proposal to FCC
House Commerce Releases USF Data - press release
The Brave Old Frontier
INTERNET/BROADBAND
Amazon sales-tax issue taken up by Congress
Gig.U's speedier Internet - editorial
SPECTRUM/WIRELESS
AT&T to Curb Wireless Browsing Speed for Heaviest Data Users
Are data restrictions actually a sham?
West Virginia Approves AT&T/T-Mobile
Tech Firms Call on Lawmakers to Preserve Unlicensed Spectrum Use
The waiting game pays off for Vodafone
LightSquared sees no obstacles left blocking LTE network [links to web]
OWNERSHIP
Amazon.com Moves Closer to Acquiring a Major British Rival [links to web]
The waiting game pays off for Vodafone
DIGITAL CONTENT
Entertainment industry: A cloud up in the air - op-ed [links to web]
TELEVISION
Sources: FCC Approves Program Carriage Standstill
EDUCATION
Educators Evaluate Learning Benefits of iPad
LABOR
Jobs (Not Steve) - analysis
GOVERNMENT & COMMUNICATIONS
Twitter emerges on Washington front line
FCC Rebuffs Grassley On LightSquared [links to web]
WHITE HOUSE MEETINGS
Roundtable on Securing Networks through Open Innovation - press release [links to web]
White House Roundtable Meeting with Rural Leaders - press release [links to web]
STORIES FROM ABROAD
PBS Plans a British Outlet [links to web]
Media Blackout in China After Wreck [links to web]
China’s Low Roaming Fees Won't Be Matched Soon [links to web]
Media groups eye reporters’ Twitter fans [links to web]
MORE ONLINE
Why Google+ will be something new - analysis [links to web]
Progress Hits Snag: Tiny Chips Use Outsize Power [links to web]
BUDGET
DEBT LIMIT CEILING
[SOURCE: New York Times, AUTHOR: Carl Hulse, Helene Cooper]
President Obama and Congressional leaders of both parties said late Sunday that they had agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government’s borrowing limit. The tentative agreement calls for at least $2.4 trillion in spending cuts over 10 years, a new Congressional committee to recommend a deficit-reduction proposal by Thanksgiving, and a two-step increase in the debt ceiling. The debt limit would be increased by $900 billion in the first installment, subject to a Congressional vote of disapproval that President Obama would be able to veto. To prevent a default, $400 billion would be added immediately. A second increase of $1.2 trillion to $1.5 trillion would be available subject to a second vote of disapproval by Congress. At the same time, a new joint Congressional committee would be created to find cuts roughly matching the increase in the debt limit. If the evenly divided committee failed to agree on a plan, Congress would either have to approve a balanced budget agreement to the Constitution or accept an across-the-board cut in spending in line with the committee’s goal, with 50 percent of the savings coming from the Pentagon beginning in 2013. Medicare would also sustain cuts, though the reductions would be capped; Social Security and other programs would be exempt. The rationale for picking favored programs like the Pentagon for Republicans and Medicare for Democrats was to provide a strong incentive for the new committee to avoid a deadlock and deliver a deficit reduction plan that could clear Congress.
With the health of the fragile economy hanging in the balance and financial markets watching closely, the leaders said they would present the compromise to their caucuses on August 1 in hopes of enacting it before an August 2 deadline to avert default. Gene Sperling, a top economic advisor, said the deal protected Pell grants for college students and Medicaid spending, but perhaps more important, did not allow government to be held “hostage” by a Republican threat of default.
benton.org/node/84755 | New York Times
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SPECTRUM AUCTIONS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Senate Majority Leader Harry Reid (D-NV) crafted a new version of his debt-ceiling bill that no longer includes spectrum auction language. According to a copy of a July 29 letter from the Congressional Budget Office outlining the new bill's impact on the deficit, among the differences in July 29's version of the bill was that it "removes provisions governing spectrum auctions and related spending." Sen Reid said the provision had to be removed because it raised revenue and so would have had to originate in the House (Article 1, Section 7 of the Constitution requires all bills raising revenue to originate in the House). But he also suggested it was to make it more amenable to Republicans. Sen Reid added that the auctions should happen and will happen.
benton.org/node/84753 | Broadcasting&Cable | B&C - Reid | B&C - NRB
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UNIVERSAL SERVICE
USF/ICC PROPOSAL
[SOURCE: Connected Planet, AUTHOR: Joan Engebretson]
As expected, six of the nation’s largest telcos -- AT&T, Verizon, Frontier, CenturyLink, and FairPoint, and Windstream -- submitted a Universal Service Fund (USF) and inter-carrier compensation (ICC) reform proposal to the Federal Communications Commission aimed at transitioning today’s high-cost, voice-focused fund to one focused on broadband without increasing the overall fund size. A Windstream executive emphasized that the proposal submitted today focuses primarily on the broadband Universal Service program as it pertains to price-cap carriers. A critical element of the large carriers’ plan, however, is that it provides details about how today’s $4.5 billion USF would be reapportioned. The price cap carrier proposal, which the group is calling “America’s Broadband Connectivity Plan,” recommends apportioning $300 million for a mobility fund, $2.2 billion for broadband in high-cost areas and $2 billion for rate-of-return carriers. To stay within the current fund size, the proposal also recommends a satellite broadband solution to bring broadband to the 750,000 unserved U.S. homes that would be too costly to serve using a terrestrial solution. If the FCC opts to subsidize that service, the price cap carrier proposal recommends drawing from the mobility fund.
The carriers also are recommending that the broadband fund should support only a single carrier in an area and only in areas without competition. In addition, the proposal supports a minimum broadband target speed of 4 Mb/s downstream and 768 kb/s upstream—a target that is actually a bit lower than the 1 Mb/s downstream rate initially recommended by the FCC. Rural carriers, on the other hand, have recommended that speeds should be comparable with what is available in urban areas. At the present, perhaps that could be interpreted to mean 4 Mb/s- 768 kb/s speeds, but within a few years the rural carriers’ proposal could call for higher speeds.
Also three associations representing small rural telcos -- OPASTCO, NTCA and the Western Telecommunications Alliance -- sent a letter to the FCC indicating their agreement with the larger telcos on several key issues, such as lowering per-minute terminating ICC rates, phasing out USF support for competitive carriers and requiring voice over Internet (VoIP) carriers to pay ICC.
Telecom industry reaction was, not surprisingly, generally positive. Mobile Future, the Internet Innovation Alliance and US Telecom released supportive statements. The American Cable Association said it was "pleased" with parts of the new telecom-backed Universal Service Fund reform plan, including those that "appeared" to curb runaway fund growth, limiting, "if not prohibiting" funding in areas where there is already competitive broadband service, and ensuring that the fund is "fiscally responsible."
Free Press found the plan self-serving: "While this industry-authored proposal is certainly more sound than most of the prior self-interested plans we've seen, it still falls short of adequately confronting the real problems with the Universal Service Fund. Worse, it ensures that the inflated profits of telecom companies are protected by shifting the burden of reform to ordinary consumers."
benton.org/node/84696 | Connected Planet | ConnectedPlanet - rural support | The Hill | B&C | B&C - reaction | B&C - ACA | Free Press
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USF DATA
[SOURCE: House of Representatives Commerce Committee]
The House Commerce Committee released data submitted by the Federal Communications Commission in response to the Committee’s June 22, 2011 letter asking for an update to last year’s request for information concerning the Universal Service Fund (USF) programs. The FCC provided: a state-by-state list of total USF disbursements for each of the four USF programs; a list of states that have state USF funds; a state-by-state list of CETCs; an updated list of the top ten recipients of high-cost support for 2008, 2009, and 2010; an updated list of the ten incumbent service areas that received the largest per-line high-cost support in 2008, 2009, and 2010; a list of the ten incumbent service areas that received the largest amount of total high-cost support in 2008, 2009, and 2010; an updated list of the ten incumbent service areas with the most ETCs in 2008, 2009, and 2010; total amount of low-income support disbursed for 2008, 2009, and 2010 for each program, nationally and on a state-by-state basis; and a list of the top ten recipients of low-income support for 2008, 2009, and 2010.
benton.org/node/84694 | House of Representatives Commerce Committee
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FRONTIER DSL
[SOURCE: Light Reading, AUTHOR: Carol Wilson]
Frontier Communications is going where Verizon Communications refused to go, and is ready to take some lumps in the process. So how is it Frontier is able to do DSL where Verizon couldn't? I asked Michael Golob, senior VP of engineering and technology for Frontier, how it was possible and his answer came down to this: Frontier is willing to try. In addition to some already well-publicized access infrastructure buildouts, that effort includes installing 8,000 miles of fiber optics equipped with ROADMs to handle traffic moving from Verizon's backbone and onto Frontier's, and using Actelis Networks Inc. copper-over-Ethernet gear to boost backbone speeds where fiber wasn't installed.
benton.org/node/84664 | Light Reading
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INTERNET/BROADBAND
ONLINE SALES-TAX
[SOURCE: Los Angeles Times, AUTHOR: Marc Lifsher]
Congress is weighing into the roiling dispute between states and giant Internet retailer Amazon.com over collecting sales taxes on online purchases. Sen. Dick Durbin (D-IL) is introducing legislation that would require Internet-only retailers to add sales taxes to customers' bills, just as their competitors with brick-and-mortar stores do. Rep. John Conyers (D-MI) plans to introduce a similar measure in the House. The congressional effort is aimed at closing a legal loophole created by a 1992 U.S. Supreme Court decision that freed online and catalogue sellers from the obligation of collecting the sales tax if their businesses had no physical presence in the state where a buyer lives.
benton.org/node/84689 | Los Angeles Times
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GIG.U
[SOURCE: Los Angeles Times, AUTHOR: Editorial staff]
[Commentary] College campuses are shielded from many of the ugly realities of the outside world, such as dead-end jobs, underwater mortgages and pokey Internet connections. Now, a group of research universities wants to bring one of their perks — blazing fast Internet access — to the communities that surround them. They're trying to persuade telecommunications companies to use the towns as test beds for broadband services almost 200 times faster than today's average connection. The goal of the effort, dubbed Gig.U, is to spur a leap in broadband technologies and the services they enable. Although it's something of a "Field of Dreams" notion, the project could help the country surmount one of the biggest obstacles to a truly high-speed Internet.
benton.org/node/84747 | Los Angeles Times
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SPECTRUM/WIRELESS
AT&T DATA CAPS
[SOURCE: Bloomberg, AUTHOR: Hugo Miller]
AT&T will curb browsing speeds for its heaviest users on unlimited wireless data plans to cope with surging data traffic. Starting Oct. 1, customers on an unlimited plan whose monthly use puts them into the top 5 percent of data consumption may experience reduced speeds until the end of that billing cycle. Normal browsing speeds will return once the customer begins a new cycle.
benton.org/node/84751 | Bloomberg
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ARE DATA CAPS A SHAM?
[SOURCE: Fortune, AUTHOR: Dan Mitchell]
The argument by Internet service providers (ISPs) that too many people are using too much bandwidth seems plausible enough. After all, streaming high-definition movies, posting high-megapixel photos and downloading video games are making ever-larger demands on networks. But does that mean ISPs are really running out of bandwidth? Is capping individual usage the only way they can cope? No, says tech pundit Robert X. Cringely (aka Mark Stephens). He argues that data caps are a ploy by ISPs to position themselves to increase their profits as data consumption explodes in the coming years. The ISPs' motivation aside, Cringely counters the their claims on the basics of bandwidth economics. Bandwidth usage is certainly increasing, but at the same time "backbone costs [basically, what ISPs pay to hook themselves into the Internet] are going down and have been doing so for many years," he writes. In Tokyo, he says, the ISP Softbank BB charges its customers about half of what American ISPs charge, even while offering speeds four times faster. "Yet Softbank BB is profitable. Their backbone costs are inconsequential and to argue otherwise is probably a lie."
benton.org/node/84750 | Fortune
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WV APPROVES AT&T/T-MOBILE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The West Virginia Public Service Commission has become the third state commission to approve the AT&T/T-Mobile merger, approving it without a hearing. The commission was pleased that AT&T agreed to allow existing T-Mobile customers in the state to receive service on identical terms and conditions, saying that it was "swayed" by that promise. The commission found the conditions "reasonable," and said that the transaction "does not adversely affect the public and no party is given an undue advantage." The commission pointed out that the reason it does not adversely impact the state is that it does not impact the state much, period. "In this proceeding, the West Virginia portion of the proposed merger is relatively small touching on a limited number of T-Mobile customers residing near Pittsburgh or the District of Columbia," said the commission. "As Staff noted T-Mobile has only 0.26 percent of the West Virginia wireless market. Thus, the Commission believes that the transaction will not adversely impact competition or have other adverse impact on this State." It made it clear it was not passing judgment on the national implications of the deal for competition. "Any possible implications from this transaction on competition nationwide will be considered by federal authorities," it said.
West Virginia follows Arizona and Louisiana in approving the deal.
benton.org/node/84749 | Broadcasting&Cable
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UNLICENSED SPECTRUM
[SOURCE: National Journal, AUTHOR: Juliana Gruenwald]
As broadcasters fight to ensure they are protected and public-safety officials push to ensure they get a communications network, a group of tech companies -- Dell, Google, LG Electronics, Microsoft, the National Hispanic Media Coalition, and others -- is raising another red flag about a provision in spectrum legislation being crafted by a House panel. Their concerns stem from a provision in draft legislation by Republicans on the Commerce Committee that critics worry would limit the use of white spaces, the unlicensed spectrum between television channels. The GOP spectrum bill would require the Federal Communications Commission to auction the right to unlicensed spectrum; critics say that could kill the emerging market for the use of white spaces. The draft measure is aimed at helping public-safety personnel build a national broadband network and at freeing up more spectrum for wireless broadband by enticing broadcasters and others give up some of their airwaves.
benton.org/node/84687 | National Journal
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VODAFONE'S STRATEGY
[SOURCE: Financial Times, AUTHOR: Andrew Parker, Paul Taylor]
The waiting game is finally over. Seven years after Vodafone last received a dividend from Verizon Wireless, the leading US mobile phone operator, the UK telecoms group will get a new pay-out in 2012. And it is not a small dividend. Vodafone, which has a 45 per cent stake in Verizon Wireless, its joint venture with Verizon Communications, will get a $4.5 billion pay-out from the US mobile operator in January. Vodafone will respond by paying a £2 billion special dividend to its shareholders in February. The resumption of cash distributions by Verizon Wireless is a coup for Vittorio Colao, Vodafone’s chief executive, and Sir John Bond, the outgoing chairman. They faced down pressure from some shareholders for the UK group to sell its Verizon Wireless stake, instead insisting on playing a waiting game. Why were Mr Colao and Sir John so confident that their patience would be rewarded? And why did Verizon Wireless’ dividend payments stop in 2005? The answers can be found in how the balance of power inside Verizon Wireless has shifted over the years between its two shareholders. The joint venture’s parents have had a temptestuous relationship, but, for the moment at least, Vodafone has come out on top. The $4.5 billion payment by Verizon Wireless should increase Vodafone’s free cash flow by at least 30 per cent in 2011-12. The only real surprise in the announcement late on Thursday that Verizon Wireless would pay a $10 billion dividend to its parents in 2012 was the timing. Most investors were expecting a statement at the end of this year, rather than now
benton.org/node/84743 | Financial Times | FT
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TELEVISION
PROGRAM CARRIAGE STANDSTILL
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has finally voted out its program carriage order, which provides for granting interim carriage during the adjudication of cable-network program-carriage complaints, or true-up payments for nets that have never been carried, and sets deadlines for dealing with those matters. Such a mechanism currently does not exist, and it can take years for complaints to grind through the regulatory sausage-making process. The standstill provision is not retroactive and would not apply to the Tennis Channel and Bloomberg program carriage complaints, both against Comcast, even if they were not ruled on until after the rules took effect and either were decided in favor of the plaintiff. The order also better defines what type of complaints are, or are not, likely to have merit, and setting up shot clocks for FCC action. FCC Democrats all supported the order, while Republican Commissioner Robert McDowell is expected to have dissented in part, the part being the standstill agreement portion.
benton.org/node/84741 | Broadcasting&Cable
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EDUCATION
IPAD AND EDUCATION
[SOURCE: Education Week, AUTHOR: Ian Quillen]
Every day seems to offer another story about a district or school that’s buying iPads—a development that astonishes some ed-tech experts since the device is less than 15 months old, and K-12 educators are traditionally slow adopters of new technology. And they've adopted it for classroom use despite the fact that Apple is still revising its product, with the second version of perhaps several issued in March, while many other manufacturers had only released their tablet competitors at the beginning of this year. Further, Apple products are not compatible with Adobe Flash Player. Excluding the fad factor, experts say there are legitimate reasons for educational interest. With a battery life of eight to 10 hours and a weight of just over a pound, the iPad offers more portability and less startup time during the full school day than laptops or netbooks, while its screen size facilitates more flexibility using the Web and easier input than smartphones. But such rapid adoption of a device with such a short history means that figuring out the best educational use can involve a lot of trial and error. That reality has some educators wondering whether the investment is wise.
benton.org/node/84665 | Education Week
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LABOR
JOBS
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
The biggest story in Washington now, of course, is the debate over the debt limit. Telecommunications policy plays a role in this debate -- specifically on a decision to include spectrum auctions as a way to raise revenues for the federal government. But this debate remains very fluid, so we'll hold off for now on a full update. Instead this week we'll focus on jobs.
On July 18, the Wall Street Journal reported that the wireless industry is booming as more consumers and businesses snap up smartphones, tablet computers and billions of wireless applications. But for the industry's workers, the story is less rosy. Employment at U.S. wireless carriers hit a 12-year low of 166,600 in May -- about 20,000 fewer jobs than when the recession ended in June 2009 and 2,000 fewer than a year ago. While the industry's revenue has grown 28% since 2006, when wireless employment peaked at 207,000 workers, its mostly nonunion work force has shrunk about 20%. "The disconnect between employment and industry growth reflects the broader head winds lashing the U.S. job market, as consolidation, outsourcing and productivity gains from new technology and business methods combine to undermine job growth.," writes WSJ's Anton Troianovski.
http://benton.org/node/84615
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GOVERNMENT & COMMUNICATIONS
TWITTER ON THE FRONT LINES
[SOURCE: Financial Times, AUTHOR: David Gelles]
Twitter has become a front line of the debate on raising America’s debt ceiling, as the official account of President Barack Obama on July 29 began sending out the Twitter names of every Republican member in Congress. Frustrated citizens have also used the social media service to vent their frustration with Washington, even as politicians rally supporters with regular tweets. A typical message from @BarackObama on Friday read: “Utah voters: Tweet @OrrinHatch and @SenMikeLee and ask them to compromise on a balanced deficit solution.” The messages went to the presidential account’s more than 9.3m followers. However, there were mixed indications about the campaign’s effectiveness. According to one Twitter user who claimed to have monitored the account, the president lost at least 10,000 followers during the course of the day.
benton.org/node/84744 | Financial Times | NYDaily News
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