July 2014

FCC Launches Rural Broadband Expansion Experiments

The Federal Communications Commission launched experiments to explore how robust broadband can be expanded at lower cost in rural America. The experiments will inform the agency’s broader effort to expand rural broadband through its Connect America Fund.

They will also inform the FCC’s efforts to ensure that consumers everywhere can benefit from the sweeping technological advances occurring now in the communications industry, while preserving consumer protection, competition, universal service and access to emergency services during these transitions. Up to $100 million will be available for the experiments, which will be divided into three groups as follows:

$75 million to test construction of networks offering service plans providing 25 Mpbs downloads and 5 Mbps uploads – far in excess of the current Connect America Fund standard of 4/1 – for the same or lower amounts of support than will be offered to carriers in Phase II of Connect America
$15 million to test interest in delivering service at 10/1 speeds in high cost areas
$10 million for 10/1 service in areas that are extremely costly to serve.

Applicants will compete nationwide for the funds, which will be awarded to projects that are most cost effective. A key goal of the experiments is to test this competitive bidding process before it is used to allocate funds more broadly from the Connect America Fund, anticipated to occur later in 2015. The experiments will also test service over diverse technologies, including fiber and wireless networks, and will be open to non-traditional providers, including electric utilities, wireless internet service providers, and others. To ensure diverse experiments, project sizes are capped, while entities serving Tribal lands are eligible for a 25% bidding credit

Policies on Mobile Spectrum Holdings and Expanding Economic and Innovation Opportunities of Spectrum Through Incentive Auctions

The Federal Communications Commission has updated its initial screen for review of spectrum acquisitions through secondary markets and makes determinations regarding whether to establish mobile spectrum holding limits for its upcoming auctions of high- and low-band spectrum, in light of the growing demand for spectrum, the differences between spectrum bands, and in accordance with its desire to preserve and promote competition.

The FCC has updated its spectrum screen for its competitive review of proposed secondary market transactions to reflect current suitability and availability of spectrum for mobile wireless services. It adds to its spectrum screen: 40 megahertz of AWS–4; 10 megahertz of H Block; 65 megahertz of AWS–3 (when it becomes available on a market-by- market basis); 12 megahertz of BRS; 89 megahertz of EBS; and the total amount of 600 MHz spectrum auctioned in the Incentive Auction.

It subtracts from its spectrum screen: 12.5 megahertz of SMR; and 10 megahertz that was the Upper 700 MHz D Block. The Commission establishes a market-based spectrum reserve of up to 30 megahertz in the Incentive Auction in each license area to ensure against excessive concentration in holdings of low-band spectrum and ensuring that all bidders bear a fair share of the cost of the Incentive Auction.

It adopts limits on secondary market transactions of 600 MHz spectrum licenses for six years post-auction. It declines to adopt auction-specific limits for AWS–3. It treats certain further concentrations of below-1-GHz spectrum as an enhanced factor in its case-by-case analysis of the potential competitive harms posed by individual transactions.

Time running out to speak up about Internet 'toll lanes'

[Commentary] The Federal Communications Commission is about to allow Internet providers to charge tolls for speedy access unless we raise our voices to get the agency to declare the Internet a "common carrier," infrastructure that must be open to all on an equal basis, just as telephones, television and railroads are.

This is a critical issue for small businesses and start-ups. But the deadline for public comments is July 14.

If you, like me, want the FCC to require Internet companies to treat small businesses equally, then contact the agency and urge them to classify the Internet as a common carrier. If Internet service providers are allowed to have a fast lane for those who pay a premium and if the fairness of this policy is decided on a case-by-case basis, start-ups and small businesses would have to challenge each discriminatory practice -- an unreasonable and expensive burden.

No, Aereo isn’t really claiming to be a true cable company

In an effort to survive, Aereo's throwing everything against the wall and hoping something -- anything -- sticks. Its latest tactic? To embrace the Supreme Court decision that effectively killed its existing business model, and to work within the confines of the ruling to arrive at an alternative that won't land the company in court again.

Aereo is now conceding that it is a cable company after all, after having argued the opposite point before the Supreme Court. The company now says it's willing to pay those licensing fees -- but to the Copyright Office, rather than to the broadcasters who were suing Aereo in the first place. In short, Aereo is trying to thread a very small needle: It wants to say it's just enough of a cable company that it qualifies for the benefits that come along with it (more on that shortly) but not so much of a cable company that it needs to pay expensive retransmission fees required of other cable companies.

If Aereo admits that it's a cable company in the eyes of the copyright law, what's to stop the FCC from branding Aereo as a cable company that has to pay retransmission fees? Aereo's only hope at avoiding that outcome rests on the FCC's historical reluctance to say whether online video services count as MVPDs.

Aereo’s legal strategy straightens up and flies right

[Commentary] Recently, news broke that Aereo has reframed its legal strategy to embrace just this argument, now arguing that it is a cable system and that it can avail itself of the Section 111 compulsory license to gain access to broadcast television content. The key question: Is Aereo a cable system?

At the end of the day, we should be thankful for Aereo’s willingness to put these issues front and center. Unlike their previous legal theory, where they tried to drive a freight train of copyright violations through the eye of the Cablevision needle, they are now forcing our attention to the key legal and policy issues. There are good arguments on both sides of the Aereo-as-cable question.

In either event, judicial resolution of the issue would increase certainty within the industry in a way that the Supreme Court’s Aereo decision did not. Even more important, a decision -- whichever way it goes -- would helpfully frame the issue for ultimate resolution by Congress.

If there’s one thing that the Aereo saga makes clear, it’s that current video regulations are a poor fit for the Internet age; Aereo’s continuing efforts can only help get the much-needed involvement of Congress in updating these out-of-date regulations.

[Hurwitz is an assistant professor at the University of Nebraska College of Law]

The FTC should reward, not penalize, companies that innovate in good faith

[Commentary]The Federal Trade Commission (FTC) announced that it has filed a lawsuit against Amazon.com, alleging that the company had failed to set sufficiently tight controls for purchases made by children while using mobile apps.

The Amazon suit reflects an unfortunate trend. By forcing companies into consent decrees, instead of using its own rulemaking authority or waiting for Congress to act, the FTC circumvents the democratic process, reduces transparency and limits public participation. These agreements can end up serving as de facto policy, which is a problem since they only reflect the agreement of two parties, rather than all stakeholders. At times, consent decrees may even be anti-competitive, by creating greater barriers for new entrants and entrenching established interests.

Rather than fostering disruptive innovation, these types of 20-year agreements lock companies into stagnant business practices and discourage companies from taking risks lest they be subject to the wrath of the FTC. A better approach is for the FTC to take ambiguity out of the equation by establishing clear rules and taking action against companies that knowingly violate them, or by going after companies that knowingly and willfully harm consumers, such as any app developers who try to exploit the in-app payment system in apps directed at children.

[Castro is a senior analyst with the Information Technology and Innovation Foundation]

Privacy integral to future of the Internet of Things

[Commentary] As the Internet of Things steamrolls from tech novelty to entrenched reality, privacy concerns will mushroom surrounding the personal data generated by devices on our bodies and in our homes.

And now, it seems, is a critical inflection point, according to those gathered at the Internet of Things Privacy Summit, the first such Silicon Valley confab organized by data privacy management company TRUSTe.

The cynical view is that corporations focused on profit will minimize privacy issues if they get in the way of a growing bottom line. But Michelle Dennedy, chief privacy officer at security software firm McAfee, and others caution that approach risks a consumer backlash.

"In almost any segment it's a very competitive market out there, consumers have a lot of choices," she says.

Ultimately, the privacy debate boils down to "whether we as consumers are willing to surrender privacy for convenience, which is dangerous considering the tempting opportunity for the abuse of such private information," says Jana Anderson of The Imagining the Internet Center at Elon University.

There seemed to be two conclusions from the day's events in Silicon Valley. One, the Internet of Things is coming, and with it a growing need for consumers and corporations alike to address its attendant privacy issues. And two, worrying about our online privacy is nothing new.

Privacy Implications of Social Media Manipulation

[Commentary] The ethical debate about Facebook’s mood manipulation experiment has rightly focused on Facebook’s manipulation of what users saw, rather than the “pure privacy” issue of which information was collected and how it was used.

The key point is that the privacy impact of an interaction like this depends not only on which types of information are gathered, but also on which prompts were given to the user and how those prompts were chosen. Experimenting on users affects their privacy.

Now: What can we learn about the privacy impact of Facebook’s experiment? Facebook did learn some non-zero amount of information about the manipulability of individual users’ emotions. Given the published results of the study, the information learned about individual users was probably very weak, in the statistical sense of being correlated with the truth but only very weakly correlated, for the vast majority of users or perhaps for all users.

Ultimately, experiments that manipulate user experience impact users’ privacy, and that privacy impact needs to be taken into account in evaluating the ethics of such experiments and in determining when users should be informed.

[Felten is Director, Center for Information Technology Policy, Princeton University]

Lawyers and web experts attack UK’s fast-tracking of surveillance legislation

The World Wide Web Foundation and the United Kingdom Law Society have both strongly criticized the British government for attempting to fast-track the new Data Retention and Investigation Powers (DRIP) Act, which is meant to keep existing surveillance powers going but which will actually expand them greatly.

According to the World Wide Web Foundation, which is headed up by web inventor Tim Berners-Lee, the British government’s assertion that the bill needs to be rushed through as emergency legislation “seems at best incompetent, and at worst manipulative,” as the law could easily have been debated over recent months. The Law Society, which represents British lawyers, warned that history shows emergency laws tend to be “used for purposes for which they were not intended.”

Radio Experimentation and Market Trials -- Streamlining Rules

The Federal Communications Commission announces that the Office of Management and Budget (OMB) has approved, for a period of three years, the information collection requirements contained in the regulations in the .

The information collection requirements were approved on June 9, 2014 by OMB.

Benton

Search