May 2013

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, MAY 21, 2013

Cybersecurity Day at the House Commerce Committee http://benton.org/calendar/2013-05-21/

NETWORK NEUTRALITY
   Supreme Court Upholds Chevron Deference to FCC Interpretation Of Its Authority
   How network neutrality regulations could undermine the open Internet - op-ed
   AT&T to allow FaceTime, other video chat apps over cellular for all customers

MORE ON INTERNET/BROADBAND
   FCC Releases New Data on Internet Access Services - research

TELECOM
   Wireless Home Phones: A Plan Strikes a Chord
   But What’s Verizon Real Vision for a Telecom 'Framework'?

TELEVISION
   Why ‘A La Carte’ Video Would Eviscerate Diversity and Minority Participation in Cable - editorial
   As TV Migrates Online, Cable Is Under Pressure to Change [links to web]
   CEA Challenges Charter's FCC Set-Top Waiver [links to web]
   Old Rules Don’t mean Much to Broadcasters [links to web]
   Viewers Start to Embrace Television on Demand [links to web]

OWNERSHIP
   With ‘complex web’ of offshore entities, Apple avoids taxes: Senate
    See also: Dublin rejects Apple tax avoidance claims [links to web]
   Ergen Said to Offer $2 Billion for LightSquared’s Spectrum [links to web]
   Sprint to Enter Talks on Dish's Offer [links to web]

WIRELESS
   Smartphone wars: Two is company, but Microsoft, Apple, and Google is a crowd [links to web]
   Alleviating Poverty: Mobile Communications, Microfinance and Small Business Development Around the World [links to web]
   AT&T to allow FaceTime, other video chat apps over cellular for all customers
   Sprint to Enter Talks on Dish's Offer [links to web]

EDUCATION
   Digital Trends Shifting the Role of Teachers [links to web]

BIG DATA
   In Media, Big Data Is Booming but Big Results Are Lacking - op-ed [links to web]
   Cisco: Big Data Is The Network, Too [links to web]
   Intel Fuels a Rebellion Around Your Data [links to web]

GOVERNMENT & COMMUNICATIONS
   A rare peek into a Justice Department leak probe
   Justice Department Investigated Fox Reporter Over Leak [links to web]

POLICYMAKERS
   At FCC, Mignon Clyburn cracks the glass ceiling
   Continuity and Progress: Statement From FCC Acting Chairwoman Mignon Clyburn to Staff - speech

STORIES FROM ABROAD
   Google, Microsoft, and Yahoo are secret backers behind European Privacy Association
   Chinese hackers who breached Google gained access to sensitive data, U.S. officials say [links to web]

MORE ONLINE
   For the Word on the Street, Courts Call Up an Online Witness [links to web]

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NETWORK NEUTRALITY

COURT WIN FOR FCC
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
The Supreme Court held that a court must give Chevron deference to an agency's interpretation of an ambiguity in statute over the limits of its authority. In this case it was the Federal Communications Commission's assertion that it had the broad regulatory authority to impose a shot clock on tower citing applications to local governments. Traditionally, under the Chevron doctrine stemming from an earlier Supreme Court decision, courts hearing appeals of agency decisions give deference to agencies' subject matter expertise. But there is an outstanding legal question about whether that should include decisions on whether Congress gave them that authority, or whether a court should consider that question "de novo," -- without that thumb on the scale in favor of the FCC's expertise. At issue is not just the FCC's decision in the case at issue, but the authority generally of regulators to make such jurisdictional calls. The cities of Arlington and San Antonio, Texas, had challenged the Fifth Circuit Court of Appeals ruling that the FCC was due that Chevron deference, even on the limits of its own authority. Oral argument in the case was held last January, and the court did not appear to be sympathetic to the cities' argument that a court, not the FCC, should decide questions of whether Congress has given it regulatory authority. Solicitor General Donald Verrilli had countered that so long as the FCC has the delegated authority from Congress to implement a statute, it also gets deference under the Chevron doctrine in filling in gaps where the statute is ambiguous. The Supreme Court agreed.
The New York Times writes that the FCC’ high-profile attempt to defend its network neutrality rules against a court challenge got major support from the decision. “This case just gave the FCC’s argument a lot more weight,” said David Kaut, a telecommunications regulatory analyst at Stifel, Nicolaus & Company in Washington. Mr. Kaut cautioned, however, that the differing facts of the two cases made it uncertain whether the precedent in the Arlington case is sufficient to validate the F.C.C.’s argument that it has authority to regulate Internet service providers.
benton.org/node/152299 | Multichannel News | NYTimes | Supreme Court
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NETWORK NEUTRALITY RULES AND THE OPEN INTERNET
[SOURCE: Washington Post, AUTHOR: Timothy Lee]
[Commentary] In recent years supporters of network neutrality have tried and failed to get Congress to enact neutrality regulations. In 2010, Julius Genachowski, President Obama’s choice to lead the Federal Communications Commission, decided to act anyway, relying on a controversial interpretation of existing statutes to justify a new regime of “open Internet” rules. At the time, most network neutrality supporters described Genachowski’s as a step in the right direction. But some warned that the FCC’s legal arguments, if accepted by the courts, could be bad for network neutrality in the long run. They could open the door to future FCC regulations—for example, to combat online gambling, pornography, or piracy—that could actually undermine Internet freedom.
benton.org/node/152306 | Washington Post
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AT&T AND FACETIME
[SOURCE: GigaOm, AUTHOR: Erica Ogg]
AT&T said it plans to more broadly enable the use of Apple’s FaceTime for users over its cellular network in the next few weeks, and by year’s end plans to allow video chat apps use over its network by all customers. This latest position on FaceTime and similar apps represents total shift from its position almost a year ago. AT&T’s statement notes that “by mid-June, we’ll have enabled those apps over cellular for our unlimited plan customers who have LTE devices from [Apple, Samsung and BlackBerry].” Besides FaceTime, Samsung and BlackBerry’s pre-installed video chat apps will also be included. And more will be coming for all of its customers before the end of the year: “Throughout the second half of this year, we plan to enable pre-loaded video chat apps over cellular for all our customers, regardless of data plan or device; that work is expected to be complete by year end.”
benton.org/node/152297 | GigaOm
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MORE ON INTERNET/BROADBAND

INTERNET ACCESS DATA
[SOURCE: Federal Communications Commission, AUTHOR: ]
This report summarizes information about Internet access connections over 200 kilobits per second (kbps) in at least one direction in service in the United States on June 30, 2012, as collected by FCC Form 477. This is the
eighth report to include details about subscribership differences among census tracts and counties, as well as subscribership differences among the states. Notable developments between June 2011 and June 2012 include:
Internet connections overall are growing. The number of connections over 200 kbps in at least one direction increased by 18% year-over-year to 243 million.
Growth is particularly high in mobile Internet subscriptions, but fixed-location connections also continue to increase. The number of mobile subscriptions grew to 153 million – up 28% from June 2011. The number of fixed-location connections increased by 4% year-over-year, to 90 million.
Both fixed and mobile services are shifting to higher speeds. The share of fixed connections with download speeds at or above 3 Mbps and upload speeds at or above 768 kbps increased from 56% to 64% of total fixed connections. Among mobile wireless subscriptions, the share increased from 14% to 28%.
Despite the strong growth of total mobile connections, fixed connections continued to dominate among those connections with higher download and upload speeds
benton.org/node/152292 | Federal Communications Commission
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TELECOM

WIRELESS HOME SERVICE
[SOURCE: New York Times, AUTHOR: Patrick McGeehan]
For more than a century, Americans have made and received phone calls in their homes over a network of copper wires. Now one of the biggest American phone companies, citing the damage inflicted by Hurricane Sandy, is asking regulators to let it start switching residential customers from wired to wireless service. Verizon is proposing to substitute a new form of wireless phone service not only in storm-ravaged communities, but also in other areas where it would rather not continue to maintain the old copper wires. The switch would effectively turn the home phones of customers in these areas into tethered cellphones. The company has already started offering the service, called Voice Link, in a few places in the Northeast and in Florida where its copper wires have been damaged by storms or otherwise degraded. On May 16, state regulators in New York approved a trial of Voice Link on Fire Island, a summer haven on the Atlantic where many homes and businesses have not had phone service since Hurricane Sandy hit last October. Verizon could save many millions of dollars if it were no longer required to replace damaged copper wiring in flood-prone areas, or maintain existing cables elsewhere. The Federal Communications Commission reported this month that another big phone company, AT&T, also intends to “seek authority to serve millions of current wireline customers, mostly in rural areas, with a wireless only product.” But lawmakers, state officials and consumer advocates have expressed a concern that those proposals could leave many Americans without access to a communication lifeline.
benton.org/node/152327 | New York Times
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VERIZON FRAMEWORK
[SOURCE: Multichannel News, AUTHOR: Gary Arlen]
With substantial obfuscational aplomb, Craig Silliman, Verizon’s senior vice president of public policy and government relations, called for a “21st – century policy framework” that will “move away from large, technology-specific legislative set pieces and focus on a technology-agnostic policy framework that puts consumer-protection at its center.” In other words, Verizon – no surprise – will not push for an overhaul of the 1996 Telecommunications Act, although it will encourage various government entities to develop a broad, albeit politically volatile and undefined “framework,” that has, as Silliman calls them, “four core objectives”: “Protect consumers. Encourage innovation. Encourage investment. Be technology-agnostic.” Q: Where have we heard that before? A: Almost everywhere. Silliman made it clear that, “We can’t expect Congress to update communications laws at the pace of technological change.” He emphasized that “a strategic view of policymaking starts by asking what objective we are trying to achieve, and then asking whether regulation is needed, why it is needed, and who is best placed to administer it.”
benton.org/node/152326 | Multichannel News
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TELEVISION

A LA CARTE AND DIVERSITY
[SOURCE: Minority Media and Telecommunications Council, AUTHOR: David Honig]
[Commentary] The reasons a la carte cable pricing was roundly rejected by Congress years ago are just as relevant today: such rules would decimate the economic model that has encouraged ever-increasing diversity of viewpoints on television and has made possible even the modest increase in minority ownership of programming. On the surface, a la carte seems appealing. Certainly greater consumer influence over programming has merit. Nonetheless, the few diverse, independent channels that have managed to survive must be preserved, and new independent channels must not face insurmountable barriers to entry. Unintentionally, a la carte would be the death knell for program diversity. To understand why, think of multichannel cable as a video library. In a traditional library, natural curiosity motivates visitors to browse the shelves and check out books they’d never heard about. In the same way, cable channel surfing allows viewers to encounter and enjoy programming they’d never choose if the government had forced them to order cable “a la carte.” If traditional libraries operated a la carte, they’d only need drive-up windows. Readers could order books they’d already heard about – one book at a time. Far fewer books would be written and published, and most books would be mass appeal titles. Our intellectual and cultural life would lose much of its vibrancy and depth. Similarly, under cable a la carte, new channels featuring gospel music, international culture, or African American movies would never get off the ground. Without the daily exposure that comes with channel surfing, it would take these new channels decades to attract the millions of loyal viewers a channel needs to recoup the costs of producing high quality programming for a national audience.
benton.org/node/152284 | Minority Media and Telecommunications Council
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OWNERSHIP

APPLE TAXES
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Apple used a “complex web” of offshore entities — with no employees or physical offices — that allowed it to pay little or no taxes on the tens of billions it earned overseas, a Senate investigation found. Between 2009 and 2012, the company shielded $74 billion in profits from U.S. taxes by setting up subsidiaries in Ireland under a special arrangement with that country. While the practice of using foreign subsidiaries to avoid U.S. taxes is common among multinationals, Apple’s scheme was unprecedented in its complexity and creativity, outside tax consultants told Senate investigators. The Silicon Valley giant formed two subsidiaries based in Ireland — but without any semblance of a physical presence, the investigation found. The businesses had just one purpose: to funnel much of the company’s global profits and dodge billions of dollars of U.S. tax obligations, according to the report by the Permanent Subcommittee on Investigations. One of the subsidiaries has not filed a tax return in any country and has paid almost no taxes on $30 billion in earnings since 2009. Another one paid one-twentieth of 1 percent in taxes on $22 billion worth of profits in 2011.
benton.org/node/152304 | Washington Post | LA Times
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GOVERNMENT & COMMUNICATIONS

PEEK AT LEAKS
[SOURCE: Washington Post, AUTHOR: Ann Marimow]
When the Justice Department began investigating possible leaks of classified information about North Korea in 2009, investigators did more than obtain telephone records of a working journalist suspected of receiving the secret material. They used security badge access records to track the reporter’s comings and goings from the State Department, according to a newly obtained court affidavit. They traced the timing of his calls with a State Department security adviser suspected of sharing the classified report. They obtained a search warrant for the reporter’s personal e-mails. The case of Stephen Jin-Woo Kim, the government adviser, and James Rosen, the chief Washington correspondent for Fox News, bears striking similarities to a sweeping leaks investigation disclosed last week in which federal investigators obtained records over two months of more than 20 telephone lines assigned to the Associated Press.
benton.org/node/152296 | Washington Post
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POLICYMAKERS

CHAIRWOMAN MIGNON CLYBURN
[SOURCE: Politico, AUTHOR: Brooks Boliek]
The hallway in front of the Federal Communications Commission’s meeting room is lined with pictures of the agency’s past leaders, from Rear Adm. W.H.G. Ballard to just-departed Julius Genachowski. They’re all men — until now. Mignon Clyburn, the first woman to chair the FCC, is about to get her spot on the wall. Chairwoman Clyburn isn’t President Barack Obama’s choice to lead the commission. That distinction goes to venture capitalist Tom Wheeler. But she’ll helm the agency as acting chairwoman until he is confirmed, a process that’s likely to drag on for months. And she’ll be in charge at a time when the agency is dealing with major decisions from media ownership to spectrum auctions to the SoftBank-Sprint deal.
benton.org/node/152329 | Politico
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STATEMENT FROM FCC ACTING CHAIRWOMAN MIGNON CLYBURN TO STAFF
[SOURCE: Federal Communications Commission, AUTHOR: FCC Chairwoman Mignon Clyburn]
We have an important mission, and this is an important time. I assume the role of Acting Chair, with a great sense of responsibility, but also great humility. And as we await the confirmation of Tom Wheeler, I see myself as a member of a relay team, running one of the middle legs. My job is to build on forward momentum, give the next teammate a running start, an improved position, and no matter what, my goal is not to drop the baton. I consider my friend Mike Copps, a model for an outstanding Acting Chair. He approached this job with seriousness, humility, and led this agency through the completion of the DTV transition – a major accomplishment. So if asked about my goals as I take this new position, I would answer without hesitation – its hallmarks will be continuity and progress.
benton.org/node/152294 | Federal Communications Commission | Commissioner Pai | Commissioner Rosenworcel | B&C
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STORIES FROM ABROAD

EUROPEAN PRIVACY ASSOCIATION
[SOURCE: IDG News Service, AUTHOR: Jennifer Baker]
After being accused of a lack of transparency by an independent watchdog, the European Privacy Association (EPA) has confirmed that Google, Microsoft and Yahoo are backers. The Corporate Europe Observatory (CEO), which works to expose privileged access in E.U. policy making, said in a complaint Thursday that the European Privacy Association is working to represent industry interests in the debate on data protection in Europe, even though it has not listed any corporate backers on the E.U.'s "Transparency Register." The register, which is operated by the European Parliament and European Commission, requires all signatories to disclose their interests, objectives or aims and, where applicable, the clients they represent. The EPA is listed in the category of think tanks, research and academic institutions and claims to have only 10 private (non-corporate) members. However, EPA managing director Pietro Paganini confirmed to the IDG News Service that Google, Yahoo and Microsoft are members.
benton.org/node/152279 | IDG News Service
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