May 2014

The Consumer Federation of America argues that the Tenth Circuit Court of Appeals decision declining petitions to review Federal Communications Commission Universal Service Fund intercarrier compensation reforms buttresses the FCC's ability to regulate network neutrality using Sec. 706 authority, as FCC Chairman Tom Wheeler has proposed.

The Tenth Circuit ruling, it argues, gives a "huge boost" to that strategy in the following ways:

• It finds that §254 is an independent source of authority to include broadband access service in the definition of universal service.
• It identified §706 as a separate basis of authority that complements the §254 authority.
• It recognizes the important role that flexibility has always played in implementation of the Communications Act and explains the logic of the new approach to flexibility embodied in the Telecommunications Act of 1996.
• It systematically and thoroughly dispenses with a wide range of arguments that are little more than screeds against change.

Until now gigabit broadband projects in metro markets have garnered the most attention. But Bolt Fiber Optic Services, a unit of Northeast Oklahoma Electric Cooperative, said it plans to offer gigabit broadband service in its rural Oklahoma serving area.

Bolt Fiber Optic Services plans to offer high-definition video services as well as high-speed Internet over the gigabit passive optical network (GPON) that it plans to build using equipment from Alcatel-Lucent. Customers also will be able to use third-party voice-over-Internet protocol offerings, the company noted in the announcement.

The company plans to begin offering service in the fourth quarter of 2014 and to complete the deployment by April 2017.

As a utility company, Northeast Oklahoma Electric Cooperative is not entitled to Universal Service funding. And some readers may be surprised that the company is able to make a business case for ultra-high-speed broadband deployment without that funding.

Data brokers that quietly gather billions of pieces of data on Americans should be required to operate more openly, so that those categorized as “financially challenged” or possibly suffering from serious medical conditions have the ability to check and challenge those characterizations, a federal report said.

The data broker industry, which is lightly regulated, develops profiles of hundreds of millions of people using online and offline sources, such as magazine subscriptions, visits to Web sites, posting on social networking services and purchase histories, the Federal Trade Commission reported. The information sold to marketers can include race, income and homeownership. Categories used to label consumers include “Bible Lifestyle,” “Smoker in Household” and “New Age/Organic Lifestyle,” the report said. One category, called “Rural Everlasting,” describes people of retirement age who have “low educational attainment and low net worths.”

FTC officials, who based their report on documents gathered by issuing subpoenas to nine data brokers in December 2012, expressed concern about how the data is collected, how it’s used and the potential for making errors that are kept secret from the consumers themselves. “The extent of consumer profiling today means that data brokers often know as much -- or even more -- about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status, and more,” said FTC Chairwoman Edith Ramirez. “It’s time to bring transparency and accountability to bear on this industry on behalf of consumers, many of whom are unaware that data brokers even exist.”

The report included several legislative proposals intended to help Americans learn what information has been gathered about them and to correct errors. Consumers, under the FTC proposals, also would have the option to opt-out of data gathering about themselves. Such information is widely used by digital advertisers to improve the targeting of their marketing messages.

Data Brokers: A Call for Transparency and Accountability

ESPN has already said it may let you pay for its sports programming on the Web without subscribing to a traditional pay-TV package. Now it is floating the idea of selling some of its stuff directly to consumers, just like Netflix does.

ESPN boss John Skipper says that in 2015, the company may sell a package of Major League Soccer games to Web viewers, who could pay for the games without subscribing to ESPN itself. That would essentially replace the MLS Live service that the league currently markets to fans on its own, which costs $65 a season and gives subscribers digital access to most of the league’s games.

If ESPN goes through with those plans, it would mark the first time the network has served up sports on an a la carte basis. And if you’re a certain kind of TV-of-the-Future thinker, you can argue that it’s evidence that the bundle that supports the entire TV Industrial Complex is starting to unwind.

But the other way to look at ESPN’s trial balloon is that it shows the cable company’s commitment to the cable business model, where pay-TV subscribers pay a lot of money to get all of ESPN’s programming, and all of ESPN’s channels, whether or not they actually want ESPN. That’s because ESPN isn’t taking anything out of its bundle -- it’s just talking about adding a premium tier for a tiny slice of fans willing to pay extra.