May 7, 2013 (Senate passes Internet sales-tax bill)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, MAY 7, 2013
The FCC’s Open Internet Advisory Committee meets today http://benton.org/calendar/2013-05-07/
INTERNET/BROADBAND
Senate passes Internet sales-tax bill
Consumers, advocacy groups largely silent on sales tax
Who would win or lose on online sales tax - analysis
Backroom Internet Tax Ambush - editorial
Internet taxation shapes Amazon-eBay battle - analysis
Catch-Up Talk with Blair Levin Yields Some Surprises
Internet Uncertainty - op-ed [links to web]
US Directly Blames China’s Military for Cyberattacks
CHILDREN AND MEDIA
FTC Votes Unanimously to Retain July 1 Date for Implementation of the Updated Children’s Online Privacy Protection Rule - press release
TELECOM
"Obama-Phones" or "Gipper-Phones" -- What's in a Name? - op-ed
The telecom bill that has Colorado carriers and technology firms on edge [links to web]
TELEVISION
Give cable TV subscribers more freedom of choice - analysis
Crazy like a Fox: how broadcast networks could rake in billions by going cable-only - analysis [links to web]
WIRLESS/SPECTRUM
Clearwire Endorses Sprint Bid While Staying Silent on Dish Offer [links to web]
Big Data from Cheap Phones [links to web]
Broadcast Video Will Soon Be Packed into Smartphone Signals [links to web]
Mobile Browsers Must be Accessible Under New 21st CVAA Rules [links to web]
Wireless Carriers Hold Consumers' Loyalty [links to web]
Apple, Samsung Share of Smartphone Industry Profits Declines to 100 Percent [links to web]
The Quest for a Third Mobile Platform [links to web]
EMERGENCY COMMUNICATIONS
FirstNet to Begin Consultations With State, Tribal, Territorial and Local Entities Nationwide
CONTENT
Newspapers: A Cautionary Tale for Local TV - analysis [links to web]
Could YouTube Become as Big as CBS or Viacom? [links to web]
PRIVACY
Google Glass Picks Up Early Signal: Keep Out
Google’s Eric Schmidt on Data Privacy: The Internet Needs a Delete Button [links to web]
What Exactly Does 'Do Not Track' Mean? [links to web]
OWNERSHIP
Minorities Face Extinction in Broadcast Ownership. Will FCC Turn a Blind Eye or Level the Playing Field? [links to web]
Clearwire Endorses Sprint Bid While Staying Silent on Dish Offer [links to web]
POLICYMAKERS
Cleaning Up the Airwaves - op-ed
President Obama should find a better FCC chair - editorial
What would Wheeler do? 6 issues to watch - analysis
Former NTIA official Gomez joins Wiley Rein [links to web]
Mark Zuckerberg needs to take Politics 101 - analysis [links to web]
LOBBYING
Tech Lobby Pushes for Tweaks to Immigration Bill [links to web]
Mark Zuckerberg needs to take Politics 101 - analysis [links to web]
STORIES FROM ABROAD
Russian Court Strikes Down YouTube Suit
MORE ONLINE
Pentagon: China Views Information Warfare as Key to Countering US Pacific Forces [links to web]
INTERNET/BROADBAND
SENATE PASSES INTERNET SALES-TAX
[SOURCE: MarketWatch, AUTHOR: Robert Schroeder]
Congress took a step toward ending tax-free shopping on the Internet, as the Senate passed a bill empowering states to collect sales tax for purchases made online. But online shoppers won’t have to pay sales tax just yet. The measure — which got 69 yes votes and 27 no votes in the Senate — next goes to the House of Representatives, where anti-tax sentiment among many Republicans may make it more difficult to pass. Rep. Bob Goodlatte (R-VA), who chairs the House Judiciary Committee which the bill would go through, has raised concerns about the complexity of complying with the bill. “I understand the concerns of retailers on this issue,” he said. “Brick-and-mortar retailers must compete with Internet companies that do not have the same sales-tax-collection responsibilities,” Rep Goodlatte said. “All of that being said, I do not believe legislation like the Marketplace Fairness Act is sufficiently simplified yet. While it attempts to make tax collection simpler, it still has a long way to go,” he said.
benton.org/node/151290 | MarketWatch
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CONSUMERS SILENT ON INTERNET SALES TAX
[SOURCE: USAToday, AUTHOR: Jayne O'Donnell]
Shoppers may flock to free shipping offers, but the online sales tax debate hasn't interested consumers nearly as much. Maybe it should. Sales taxes, after all, can cost as much or more than shipping -- at times about 7% to 8% of a product price. They are just a much grayer area and often are a charge that doesn't show up in the total until it's time to click "purchase." Online retailers currently only have to collect sales tax from buyers who live in states where retailers have a physical presence. That's the result of a 1992 Supreme Court decision. Shoppers in other states are supposed to keep track of their online purchases and pay the equivalent of the sales taxes when they file their state income tax returns. That most taxpayers don't.. Only about 1-in-100 Wisconsin taxpayers submitted sales taxes when they filed their 2010 income taxes, according to a 2012 story by the non-profit public affairs channel WisconsinEye. The proposal passed by the Senate today would change that by requiring retailers to collect applicable state sales tax for all buyers. Shoppers need to keep in mind that sales taxes don't "just pay for the road that connects the consumer's house to the retailer," says Carl Davis, senior analyst for the Institute on Taxation and Economic Policy. The tax benefits consumers in areas from education to police protection.
benton.org/node/151289 | USAToday
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WHO WINS WITH ONLINE SALES TAX?
[SOURCE: USAToday, AUTHOR: Jayne O'Donnell, Hadley Malcolm]
Major retailers and local stores will be the big winners if the House follows the Senate and requires Internet retailers to collect sales taxes on online purchases. National and regional chains are tired of being showrooms for shoppers who then search their smartphones for lower prices and buy online. The chains say they are at a 5% to 10% price disadvantage by having to charge sales tax. "Retailers compete for customers on many different levels, distribution channels and fronts, including service and selection, but they cannot compete on sales tax," says Stephen Sadove, chairman of the board of the National Retail Federation and CEO of Saks Fifth Avenue. "Retailers of all shapes, sizes and channels deserve a level playing field." Local stores are sick of having to compete with online retailers who only have to charge sales tax to consumers in states where they have a physical presence. According to research from the University of Tennessee, states are missed out on more than $11 billion in uncollected taxes in 2012 from online purchases, .
benton.org/node/151295 | USAToday
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INTERNET TAX AMBUSH
[SOURCE: Wall Street Journal, AUTHOR: Editorial staff]
[Commentary] Now that the Senate has approved a bill to give state and local governments more power to collect Internet sales taxes, the bill's author intends to find out what's in it. Specifically he's trying to find out how many audits his bill authorizes against e-commerce companies. The original bill went a little beyond the usual 50 in defining what a state is. The legislation also empowered the District of Columbia, Puerto Rico, Guam, American Samoa, the Virgin and Marianas Islands "and any other territory or possession" of the United States to force distant e-sellers to collect taxes. Then, somewhere in a Senate backroom, Sen Harry Reid (D-NV) rewrote the definition of "state" again. In Reid's version of the bill approved by the Senate, "any tribal organization" will also qualify for a license to audit, which can really amount to a license to kill small business.
benton.org/node/151294 | Wall Street Journal
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AMAZON VS EBAY
[SOURCE: USAToday, AUTHOR: Jon Swartz]
The fate of the Marketplace Fairness Act could tilt the playing field between Amazon.com and eBay. Amazon, which until recently was dead-set against a national online sales tax, now embraces it as it looks to expand its physical operations across the USA, paving the way for faster, same-day delivery of goods. eBay, Amazon's rival, argues the tax would hinder its sellers who do more than $1 million in out-of-state sales annually. In a letter to eBay sellers, CEO John Donahoe suggested the law should exempt any business with fewer than 50 employees or that make less than $10 million a year on out-of-state sales. Although a national sales tax makes it easier for online players to manage taxes, eBay's largest sellers could take a hit, ultimately impacting eBay, says Greg Girard, an e-commerce analyst at IDC Retail Insights. At the same time, Amazon might use regulation as "a form of suppressing competition" as an industry incumbent, says Eric Goldman, an Internet law professor at Santa Clara University.
benton.org/node/151288 | USAToday
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BLAIR LEVIN
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
The man who was charged with crafting a plan to bring broadband to all Americans isn’t happy about the way that plan is being implemented. Currently with the Aspen Institute, Blair Levin said, “The FCC is becoming more of a political institution and less an expert agency.” Like other DC political institutions, he said, the commission is “increasingly caught up in a one-note narrative . . . of self-praise rather than focusing on providing the expertise and analytic agility necessary to adjust programs to provide bandwidth abundance to constituencies it is meant to serve.” It was up to the FCC to implement the ideas recommended in the National Broadband Plan – and the way Levin sees it, much of that work has been left undone. One of the most important pieces of information to emerge out of the NBP was that the majority of the homes that can’t get broadband are in areas served by the nation’s largest price cap carriers – and that hasn’t changed much. Although he noted that CenturyLink is doing some upgrades, he said “AT&T is doing zero, and Verizon sold some lines to Frontier but they’re not doing anything with what they held on to.” Levin also argued in his recent speech that the FCC essentially “punted” on “the critical issue of contribution reform.” In other words, the FCC’s new broadband-focused Universal Service program appears to be doomed to be funded as a percentage of carriers’ long-distance voice revenues – a methodology that is becoming increasingly unsustainable as long-distance voice revenues decline.
benton.org/node/151275 | telecompetitor
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DEFENSE DEPT REPORT
[SOURCE: New York Times, AUTHOR: David Sanger]
The Obama Administration explicitly accused China’s military of mounting attacks on American government computer systems and defense contractors, saying one motive could be to map “military capabilities that could be exploited during a crisis.” While some recent estimates have more than 90 percent of cyberespionage in the United States originating in China, the accusations relayed in the Pentagon’s annual report to Congress on Chinese military capabilities were remarkable in their directness. Until now the Administration avoided directly accusing both the Chinese government and the People’s Liberation Army of using cyberweapons against the United States in a deliberate, government-developed strategy to steal intellectual property and gain strategic advantage. “In 2012, numerous computer systems around the world, including those owned by the U.S. government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military,” the nearly 100-page report said. The report described China’s primary goal as stealing industrial technology, but said many intrusions also seemed aimed at obtaining insights into American policy makers’ thinking. It warned that the same information-gathering could easily be used for “building a picture of U.S. network defense networks, logistics, and related military capabilities that could be exploited during a crisis.”
benton.org/node/151300 | New York Times | WSJ | FT
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CHILDREN AND MEDIA
COPA RULE WILL GO INTO EFFECT JULY 1
[SOURCE: Federal Trade Commission, AUTHOR: Press release]
The Federal Trade Commission voted unanimously to retain the July 1, 2013 date for implementation of the updated Children’s Online Privacy Protection Rule. In a letter to industry organizations that had requested that the Commission reconsider the July 1 date, the Commission noted that implementation of the updated rule marks the culmination of a three-year process. The July 1 date was announced last December, providing companies more than six months to prepare. During that period, the Commission noted, FTC staff have conducted numerous meetings and consultations with organizations and individual businesses on how to ensure compliance with the new rule, and recently issued an updated set of frequently asked questions for businesses and parents. In the letter, the Commission also noted the importance of ensuring that the enhanced privacy protections of the revised rule are available to children without delay, especially in the face of rapid evolution in the ways children interact with the Internet. The commission vote approving the issuance of the letter was 4-0.
benton.org/node/151287 | Federal Trade Commission | The Hill
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TELECOM
LIFELINE – WHAT’S IN A NAME
[SOURCE: Benton Foundation, AUTHOR: Michael Copps]
[Commentary] It’s a sad commentary on the state of our public discourse that clever misnaming of issues can totally recast what should be substantive policy discussions. The most obvious example: adding the suffix “gate” onto anything that smacks of real or alleged political wrong-doing in the wake of Richard Nixon’s Watergate is usually sufficient to muddy the waters beyond all reality; often it demolishes any chance for serious debate. Remember Billygate, NannyGate, CoinGate, CableGate and all the rest? The latest example is the current Lifeline program that provides basic prepaid cell phone subsidies to low-income citizens. I knew its opponents were out to kill serious discussion (and the program, too) when they came up with the cute idea of calling the issue “Obama Phones.” As a supporter of the program, I think it would be more realistic to call them “Gipper Phones” since the program started in the Reagan years, or even “Bushie Phones” because that’s when the Lifeline program made room for wireless services. Tempted as I am, I think that would only further distract us from looking at the program on its merits.
http://benton.org/node/151262
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TELEVISION
A LA CARTE CABLE
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
[Commentary] I can only assume that high on Tom Wheeler's to-do list will be a dismantling of the antiquated business model that forces cable and satellite subscribers to pay for dozens of channels they will never watch. It's also a system that can result in a favorite channel disappearing not because it didn't have an audience but because it didn't generate enough profit for a cable or a satellite provider. If I have to pay for more than 100 channels that I have no plans to watch, I'd rather pay a few cents a month for a channel that supports the arts instead of the $5 that I have to pay for ESPN, or the $4 each that I have to pay for Time Warner's own Lakers and Dodgers channels. It should be our call, not theirs. The answer, as I've written before, is a la carte programming, which would allow people to pay only for the channels they desire. Some channels would sink, others would swim. The important thing is that the marketplace would decide winners and losers, not a handful of cable execs. Critics say a la carte would cause prices to rise and limit consumer choice. I'm not so sure. Seems to me that forcing channels to compete for our business would keep prices down and promote innovation and quality. I counted more than 100 sports channels on Time Warner's website, including those that run in both standard and high definition. Does anyone really think that with that much competition, these guys would be able to get away with huge price increases?
benton.org/node/151286 | Los Angeles Times
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EMERGENCY COMMUNICATIONS
FIRSTNET CONSULTATIONS
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Press release]
The First Responder Network Authority (FirstNet) announced that the first in a summer-long series of consultations with states, tribes, territories and localities will take place May 15-16. FirstNet will conduct regional workshops in six regions and will also meet with each state individually during the consultation process. This portion of FirstNet’s outreach is designed to solicit input from attendees to help in the design of a public safety-grade next-generation wireless network that meets the specific communications requirements of police, firefighters and emergency medical services personnel in their respective jurisdictions. The first regional workshop will be a two-day program beginning with a discussion of the changing nature of public safety since 9/11 and the need for placing next-generation technologies into the hands of first responders. It continues with an update on FirstNet progress, an interactive session on network development and multiple facilitated discussions between participants and FirstNet. Also scheduled are breakout sessions for stakeholders, discussions between registrants and FirstNet, breakouts on specific challenges of implementing the public-safety broadband network and group peer-to-peer exchanges.
benton.org/node/151284 | National Telecommunications and Information Administration
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PRIVACY
GOOGLE GLASS OPPOSITION
[SOURCE: New York Times, AUTHOR: David Streitfeld]
Google’s wearable computer, the most anticipated piece of electronic wizardry since the iPad and iPhone, will not go on sale for many months. But the resistance is already under way. The glasseslike device, which allows users to access the Internet, take photos and film short snippets, has been pre-emptively banned by a Seattle bar. Large parts of Las Vegas will not welcome wearers. West Virginia legislators tried to make it illegal to use the gadget, known as Google Glass, while driving. “This is just the beginning,” said Timothy Toohey, a Los Angeles lawyer specializing in privacy issues. “Google Glass is going to cause quite a brawl.” As personal technology becomes increasingly nimble and invisible, Glass is prompting questions of whether it will distract drivers, upend relationships and strip people of what little privacy they still have in public.
benton.org/node/151298 | New York Times
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POLICYMAKERS
CLEANING UP THE AIRWAVES
[SOURCE: American Prospect, AUTHOR: Mark Lloyd]
[Commentary] Can Tom Wheeler make good on the President’s early promises to make the U.S. a 21st Century digital nation that reflects the diversity of our country? The Federal Communications Commission is the key federal agency for our digital age. It regulates all wired and wireless communications service, including how all of us get Google and Facebook and everything else we call the Internet. Founded during the early progressive era, it is tasked with getting the powerful corporate interests that dominate the media and telecommunications industries to act in the public interest. Since the Reagan administration, determining just what is in the public interest has too often been confused with finding the middle ground between competing business interests. Many of us in the progressive community hoped President Obama would establish an FCC that would advance vigorous local competition, hold accountable local broadcasting and telecommunications companies, and promote both the diversity of local voices and greater ownership opportunities for women and minorities. The Genachowski FCC promised to pursue these goals; like other federal agencies led by Obama appointees, it was going to be data-driven. Instead, progressive regulation has stalled or regressed over the past four years. In juggling the competing interests of industry groups—the NCTA, the CTIA, and the National Association of Broadcasters (NAB)—the FCC has failed to advance media diversity and to enforce net neutrality. Chairman Genachowski failed, in other words, to keep candidate Obama’s two key promises.
benton.org/node/151274 | American Prospect
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FIND A BETTER FCC CHAIR
[SOURCE: Seattle Times, AUTHOR: Editorial staff]
[Commentary] President Obama can do better than his choice of a former industry lobbyist to head the Federal Communications Commission. President Obama must start fresh with a nomination that invokes values that helped elect him: “As we look toward the future, we must ensure that all voices in our diverse nation have the opportunity to be heard. One important way to do this is to expand the ownership stake of women-owned, minority-owned and small businesses in our media outlets.” Live up to those words.
benton.org/node/151267 | Seattle Times
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WHAT WOULD WHEELER DO?
[SOURCE: Politico, AUTHOR: Brooks Boliek]
President Barack Obama’s nomination of Tom Wheeler to head the Federal Communications Commission has led to a new game in Washington: What would Wheeler do? Boliek offers six clues:
Look to the past: Wheeler is an accomplished amateur historian.
Mend fences: Running the FCC is different from running a trade association, operating a company or being managing partner in a venture capital firm. The chairman of the FCC is a powerful person, but he still needs three votes. While he can usually count on the two other Democrats, that isn’t always the case. Wheeler is coming into an odd situation in which one of his peers — Commissioner Mignon Clyburn — will have already served a stint in the center seat in an interim role. And Sen. Jay Rockefeller (D-WV) was outspoken in his support of Commissioner Jessica Rosenworcel for the post. Wheeler will need good relationships with both Democrats to succeed.
Past as prologue for the IP transition: Wheeler will need that experience to tackle what is known as the IP transition. The nickname is shorthand for the big enchilada of proceedings at the FCC. The commission is trying to decide what concepts from the old Alexander Graham Bell days that define the public interest need to be applied to the new Internet world — and how to do it. When Wheeler was chairman of FCC’s Technological Advisory Committee in 2011, he pushed the agency to “highlight this concern and initiate a public dialogue so that the technology and know-how for replacing such services is widely disseminated.” A subcommittee report recommended that the commission “take steps to expedite the transition, with a target date of 2018.”
The spectrum hunter: Wheeler will have to hit the ground running because the FCC is on a short time frame for the incentive auction that will move broadcasters off some of their frequencies and sell them for high-speed wireless uses.
Wheeler dealer: There is little doubt that Wheeler will have to deal with a major merger or transaction during his term.
Keeping it in neutral: While it isn’t his policy, Wheeler is likely to get a crack at the network neutrality issue anyway.
benton.org/node/151299 | Politico
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STORIES FROM ABROAD
YOUTUBE SUIT
[SOURCE: Wall Street Journal, AUTHOR: Paul Sonne, Olga Razumovskaya]
YouTube's first attempt to take on Russian authorities over a new child-protection law that restricts Internet content resulted in defeat, when a Moscow court struck down a pioneering lawsuit the Google video unit had filed against regulators. YouTube's lawsuit—which has served as a litmus test for the scope of new online content restrictions here—challenged the implementation of a new Russian law that blocks drug, suicide and pornography-related Web content deemed harmful to the "health and development" of children. The Russian government has defended the law, which came into effect last autumn, as a necessary protection for vulnerable children surfing the Web. But critics, including civil liberties advocates, say its broad wording gives Russian authorities the power to restrict content that many would consider innocuous, setting a worrisome precedent for online censorship that could creep into other areas of life. Google has come under fire from Russian authorities after challenging the boundaries of the law in court and publishing statistics on the rising number of content-removal requests it has received in Russia. Rospotrebnadzor, the Russian regulator overseeing compliance with the new law, released a statement criticizing the U.S. company the day those statistics were published last month.
benton.org/node/151291 | Wall Street Journal
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