September 2013

Unchained Cellphones

[Commentary] The Obama administration is pushing the Federal Communications Commission to make it easier for consumers to “unlock” their cellphones and tablet computers once their wireless contracts are completed. The FCC should do so quickly.

Some lawmakers in Congress have also sensibly proposed to make it legal for consumers themselves to unlock their wireless devices at any time, though they would still have to pay fees associated with breaking their contracts. There’s clearly a need for regulations that streamline this process. Ideally, wireless companies should unlock all phones automatically once users fulfill their contracts, without the consumers having to do anything.

AT&T's Stephenson Says Open to European Acquisitions

AT&T Chief Executive Randall Stephenson signaled anew his interest in possible acquisitions in Europe, saying the telecommunications company would welcome significant deals at the right price.

"If there were opportunities that presented a good value, of course we would do it," he said. Stephenson emphasized that US regulators are unlikely to tolerate more wireless consolidation, limiting AT&T's options at home. "We have pretty much written off that any kind of large-scale deal in our sector is going to get done," he said, referring to the US. AT&T sees room to move the European market in the direction of the US by investing in networks, shifting pricing strategies to encourage mobile data use and collecting more revenue as use increases. At the same time, heavy competition, declining revenue and the regulatory environment pose risks. The European mobile industry considers consolidation as being overdue.

AT&T Won't Set Table With Dish

AT&T Chief Executive Randall Stephenson invoked his company's failed bid for T-Mobile two years ago in making the point that he didn't see the US regulatory environment as hospitable to further consolidation. In doing so, Stephenson all but told investors that buying Dish Network—one frequently discussed strategic option for the telecom giant—was off the table.

Regulators had made it clear, he said, that having four major carriers was a top priority, implying a desire to promote competition that could even extend to the video business. He all but signed off on the theory that AT&T's next move will be to buy the remainder of Vodafone's European assets, once its deal to sell its stake in Verizon Wireless to Verizon Communications closes.

Journalists need this federal 'shield'

[Commentary] The Senate Judiciary Committee has approved a proposed Free Flow of Information Act that garnered support from all 10 of the committee's Democrats and three of its eight Republicans. While the bill isn't exactly the legislation we would have written, it would provide considerable protection for journalists who promise confidentiality to their sources in order to obtain and publish information of public concern.

The bill's centerpiece is robust judicial review of attempts by the federal government to force journalists to disclose the identity of anonymous sources or documents they promised to keep confidential. A judge could approve a subpoena if the information being sought was essential to the resolution of a criminal or civil case and the government had exhausted other possible sources for the information. But in doing so, the judge would have to weigh the public interest in compelling disclosure against the public interest in "gathering and disseminating the information or news at issue and maintaining the free flow of information." That balancing act shouldn't be left to the prosecution. Some critics claim that the Senate bill protects only the mainstream media. That's an exaggeration. Ideally, the shield law backed by the Judiciary Committee would be improved in the ways we have suggested. But even in its present form it would represent a victory for both a free press and an informed citizenry.

US Senate expands data privacy investigation

Several companies that are the target of a US government investigation into the data broker industry have refused to reveal specific details about their business practices, intensifying scrutiny over the mass trade of personal details about consumers. Sen Jay Rockefeller (D-WV), chairman of the US Senate Commerce Committee, announced that he is expanding his nearly year-long investigation into the multibillion-dollar data broker industry to include 12 health, personal finance and family-focused websites.

The sites – which include Time’s Health.com, Condé Nast’s Self.com, Fool.com, Investopedia.com and Babycenter.com – could be collecting sensitive details about a consumer’s health or financial status and feeding it to the data brokers, he said. The investigation has expanded beyond the original set of nine data brokers after many refused to identify the “specific sources of consumer information they obtain,” Sen Rockefeller said. As a result, investigators were kept in the dark as to how the industry operated, he added.

Senate working on counterpart to CISPA cybersecurity bill

Senate Intelligence Committee Chairwoman Dianne Feinstein (D-CA) is working on legislation that would encourage companies and the government to share information about cyberattacks.

Chairman Feinstein said she has prepared a draft bill and plans to move it forward. The legislation would be the Senate's counterpart to the Cyber Intelligence Sharing and Protection Act, known as CISPA, which cleared the House in April. CISPA would remove legal barriers that prevent companies from sharing information with each other and the government about cyberattacks. It would also allow the government to share more information with the private sector. But privacy advocates fear that CISPA would give the National Security Agency access to a vast new trove of private information.

Dauman: A La Carte Not the Answer

Viacom CEO Philippe Dauman told an industry audience that proposals to bring a la carte programming to consumers will not lower content costs.

“When you really sit down and explain to legislators or regulators what would happen in a so-called a la carte world, it’s not good for consumers,” Dauman said at the Goldman Sachs Communacopia conference in New York. “The system as it exists allows a lot of choice for a reasonable price. The price to pick networks that you think you want now would go up in an a la carte world. People are fundamentally rational once you talk to them. I expect that everything that will unfold will be done in the commercial marketplace, not regulated by Washington.”

Analyst: FTC Condition on Nielsen-Arbitron Hardly Matters

Commissioner Joshua Wright blasted the Federal Trade Commission in his dissent for over-reaching in the condition it imposed on Nielsen’s purchase of Arbitron, but the ultimate impact of the condition on the future market for cross-platform audience measurement may be inconsequential.

The Federal Trade Commission’s condition on Nielsen’s $1.3 billion purchase of Arbitron, to keep alive “Project Blueprint,” a one-year-old custom research project, was engineered by Arbitron and comScore to benefit only one client, ESPN. As part of the condition, Nielsen must license data gathered by Arbitron’s portable people meter and other software, to the project. No Nielsen assets are involved in the condition, and there are no restrictions on Nielsen in developing XCR, its own cross-platform product. “We view this condition as almost equivalent to no condition at all,” wrote Bernstein Research senior analyst Todd Juenger Tuesday in a report issued to investors.

Is VoIP a public utility?

[Commentary] State policymakers are waging an unusual and relatively quiet battle over the future of voice service.

An increasing number of Americans are swapping traditional landline telephone service for Internet-based VoIP service. This migration has prompted state regulators to consider whether, and to what extent, they may regulate this new service. State regulators are worried that if VoIP lies outside their jurisdiction, they will be unable to enforce consumer protection, universal service, and carrier of last resort obligations that states traditionally place upon telephone companies. As customers switch to VoIP service, they are also worried about losing revenue from telephone taxes. Legislators are concerned that regulating Internet services will be costly and will retard innovation by subjecting new nationwide services to a plethora of state-by-state regulatory regimes.

This flurry of intrastate squabbling would be unnecessary if the Federal Communications Commission would simply do its job. The Commission is our nation’s telecommunications expert and can answer the basic question of how to classify VoIP service under the Communications Act. But it refuses to do so.

Judge Rejects LightSquared Director, Citing Possible Conflict of Interest

A bankruptcy judge told LightSquared to remove a director from a special committee formed to help oversee the sale of the wireless-satellite company, agreeing with lenders that the director's previous relationship with would-be buyer Dish Network could be viewed as a conflict of interest.

"Frankly, I don't understand it," Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan said of the selection of Donna Alderman as an independent director for the committee. LightSquared lenders said in court papers that Alderman earlier sparred with Dish over how much it owed her after a 2012 acquisition she helped negotiate. "There is a history here that has been brought to light that you obviously were aware of and she is aware of," said Judge Chapman to a lawyer for LightSquared. Alderman was fired by satellite company DBSD North America Inc. after Dish purchased it out of bankruptcy proceedings in 2012, the lenders on Monday said in the court papers. She then sought $7 million from Dish for her work as a senior manager and a board member at DBSD leading up to the sale, the lenders said. The company instead said she would be provided with $750,000 in severance, according to the lenders, emails and people familiar with the matter.

Benton

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