July 2015

DirecTV false advertising beef with FTC headed for trial in December

A San Francisco (CA) federal court has set a Dec. 5 trial date for a case in which the Federal Trade Commission accuses DirecTV of misleading customers. AT&T finally closed its $49 billion purchase of the satellite TV company on July 24. It will now inherit the dispute with the Federal Trade Commission. In March, the agency filed suit against DirecTV, seeking "many millions of dollars" for those affected by the company's marketing practices.

The FTC has alleged that DirecTV didn't adequately disclose that a discounted 12-month video package requires a two-year contract, and the monthly bill increases by as much as $45 in the second year of the agreement. The agency also accuses the company of misleading customers about free three-month trials of premium channels such as HBO and Showtime. DirecTV, the agency says, isn't telling its customers that they'll be automatically charged subscription fees once that free trial period ends. In its complaint, the FTC accuses DirecTV of making "deceptive claims or omissions of material facts in advertisements." It also says the satellite company has failed to "clearly and prominently" disclose critical contract terms.

Public Knowledge Publishes Net Neutrality Paper Investigating Zero-Rating Practices

Public Knowledge is happy to announce our newest working-paper, Exploring Zero-Rating Challenges: Views from Five Countries, by Carolina Rossini, Vice President of International Policy at Public Knowledge and Taylor Moore, our 2015 Google Policy Fellow. This paper examines zero-rating practices on a global scale, focusing on their effects in five countries to add to the growing international network neutrality debate.

Carolina Rossini, Vice President of International Policy at Public Knowledge, said, “The zero-rating debate is one of the toughest issues out there, and has called into question various issues related to net neutrality and competition policy. Countries have changed their clear-cut laws to accommodate some practices. These zero-rating models include a variety of goals, ranging from marketing to adding more clients to your network to providing public services related information to connecting more people to the Internet. However, we need to get past the rhetoric of good intentions and look at the facts to inform policymakers. This is necessary so we can foster innovation and promote the public interest as we move forward with strong net neutrality rules around the globe.”

How We’re Changing the Way We Respond to Petitions

In 2011 (years before I arrived at the White House) the team here developed a petitions platform called We the People. It provided a clear and easy way for the American people to petition their government -- along with a threshold for action. Namely -- once a petition gains 100,000 signatures. We’re going to be changing a few things about We the People:

First, from now on, if a petition meets the signature goal within a designated period of time, we will aim to respond to it -- with an update or policy statement -- within 60 days wherever possible.

Second, other outside petitions platforms are starting to tap into the We the People platform. We're excited to announce that Change.org is choosing to integrate with the We the People platform, meaning the future signatures of its 100 million users will count toward the threshold for getting an official response from the Administration. We’re also opening up the code behind petitions.whitehouse.gov on Drupal.org and GitHub, which empowers other governments and outside organizations to create their own versions of this platform to engage their own citizens and constituencies.

Third, and most importantly, the process of hearing from us about your petition is going to look a little different. We’ve assembled a team of people responsible for taking your questions and requests and bringing them to the right people -- whether within the White House or in an agency within the Administration -- who may be in a position to say something about your request.

You might not always be happy with what you hear from us, but we’ll be upfront with you about why we can’t take action on a given issue if we can’t -- or about why we’re choosing not to. If there’s genuinely nothing we can do, we’re going to let you know. If we agree with you, we’ll let you know. If we’re working on it, we’ll tell you that. And we’ll keep you posted with additional details and related content that we think you might be interested in along the way. After several years, we know that We the People is an exciting tool for transparent democracy. We’ve cleared up the backlog, opened the code, and opened our platform to third-party services. And the Administration is going to keep taking petitions seriously.

Disruptive Technology that Could Transform Government-Citizen Relationships

William Gibson, the science fiction writer who coined the term “cyberspace,” once said: “The future is already here -- it’s just not very evenly distributed.” That may be exactly the way to look at the selection of disruptive technologies we have chosen to highlight in eight critical areas of government, ranging from public safety to health to transportation. Powerful combinations of digital, mobile, social, geographic and video innovations already are changing the public’s expectations and the services available. They just aren’t evenly distributed yet. And, of course, the pace of technological change is clearly accelerating. Can government agencies seize the opportunity and harness these innovations to become more efficient and responsive to citizens?

Political Campaigns Go Social, But E-mail Is Still King

Both Facebook and Twitter want to be the platform of choice for political candidates; each company has staff devoted to working with political campaigns. Twitter is aggressively marketing itself to campaigns, journalists and organizations involved in politics -- including at an event in Washington earlier in July. The event was held to promote how political campaigns can target specific Twitter users for advertisements. For its part, Facebook emphasizes the sheer number of its users, in addition targeting methods similar to Twitter. "Facebook offers scale and reach that nobody else can offer," said Facebook Policy Communications Manager Andy Stone. Facebook has more than 150 million monthly users in the United States, which one digital marketing firm estimates to be three times as many as Twitter. Even relative social media newcomer Snapchat wants to get in on the action. The video-sharing service hosted a dinner on July 27 for digital strategists in Washington.

While the campaigns are using newer social media to drive home their message, old-fashioned e-mail addresses are still crucial to fundraising. "Nothing comes close," to an e-mail list, said Michael Beach, co-founder of Targeted Victory, a digital campaign firm that works with Republicans. Beach worked with Mitt Romney's campaign in 2012 and now works with Rick Perry's campaign. "Our campaigns will do 70 percent plus of their fundraising through e-mail," he said. On the Democratic side, the President Barack Obama camp took 90 percent of their online money from e-mails in 2012. Building a digital movement this election may or may not happen, but with billions of dollars to be spent, lots of companies will certainly be cashing in.

The Clinton rules are at the heart of the New York Times's botched Hillary story

[Commentary] The Hillary Clinton-New York Times episode regarding an inaccurate NYT scoop that two US inspectors general had asked the Justice Department to open a criminal investigation into whether Clinton mishandled sensitive or classified information in using a personal account to e-mail with State Department officials and friends is a particularly illustrative example of how an unspoken set of "Clinton rules" govern the media's treatment of Clinton and how that ends up distorting the public view of her. The fallout has followed a familiar pattern: Republicans seize on an inaccurate report -- often one they pushed into the media in the first place -- and Democrats point to what's wrong in the story to undermine what's right with it. Pretty soon, the narrative emanates out from the original source of the reporting to conservative and liberal television pundits and radio talk-show hosts, ensuring that the details, and the truth, will be casualties of the never-ending political war over Clinton. That is, at some point it no longer matters whether she did anything wrong or whether there's any malice or misjudgment behind her actions. Indeed, the cloud around many big Clinton stories is so thick and toxic that it's hard to get to the bottom of whether she's the perpetrator or victim of bad deeds. No matter Clinton's level of culpability for any given sin -- real or imagined -- the Clinton rules are a drag on her political fortunes.

The Times's failure on this story is a triple whammy for Clinton: There's the hit of the original report itself, the echo effect of other reporters reinforcing the storyline by writing their own versions, and the reminder for fatigued voters that a Clinton presidency would be characterized by endless investigation and hypercharged political debate. Ultimately, the Times treated her unfairly. That happens. Journalists aren't perfect, and sometimes they get the story wrong. But the incentives to destroy Clinton are so strong that it happens to her a lot. The public suffers not just for that but for the liberty it grants Clinton and her allies to conflate erroneous reports with solid stories and argue that it's all bogus.

Cable One's broadband-first strategy has 'some critical holes,' analyst says

Newly spun off multiple-system operator Cable One is being carefully scrutinized as it preps for its first stand-alone earnings call on Aug. 6 for its notable strategy of downsizing video operations in favor of building up broadband. "We certainly have some sympathy for the notion that a broadband-only cable operator might be more profitable," wrote analyst Craig Moffett in an investor note. "But there are some critical holes in the Cable One story. Does the company truly believe that all costs are variable such that cutting video will bring endless margin expansion? Are Cable One's new shareholders really better off for having played hardball with Viacom?" Cable One, which spun off from Graham Holdings on July 1, made industry-trade headlines last year when it famously eschewed a program licensing renewal deal with Viacom, traditionally one of cable TV's lynchpin programmers.

The Phoenix (AZ)-based MSO has subsequently lost more than 20 percent of its video subscribers. In fact, the company lost 103,232 video customers in the first year after dumping Viacom, ending the first quarter with 421,331 video customers. In meetings with investors, Cable One executives have touted the improvements to EBITDA and free cash flow that have been yielded by substantially reducing the MSO's bill for video programming. After programming costs and capex are factored in, Cable One estimates that it only nets a free cash flow of 96 cents per video customer -- or about 1 percent of overall revenue. This viewpoint is shared by other top cable industry executives, including Cablevision's James Dolan. He recently told investors that high-speed data has become Cablevision's "No. 1 product," and added that "the video product has lost a tremendous amount of margin."

Remarks of FCC Commissioner Michael O'Rielly on Implementing Regulatory Reform at the FCC

The Free State foundation has been a leading advocate for improving the Federal Communications Commission's process. That is what makes the focus of today's event on implementing regulatory reform at the FCC both timely and pertinent. How should we approach process reform and what should be the governing principles for presented ideas? First, the reform proposal must improve the functionality of the FCC. Second, any ideas should improve the FCC's legitimacy. Third, reform should lead to greater transparency of FCC actions and decisions. Fourth, any reform idea should not attempt to undermine the authority of the majority. Substantive Reform Proposals & Ideas: Over the last many months I have penned nine blog posts outlining differing ideas: 1) Posting meeting items in advance 2) Post adoption process & editorial privileges 3) Pre-adoption process 4) Guest speakers and questions of "witnesses" 5) Establishing time limits & sunsets 6) Delegation of matters to staff, 7) Predictive judgment & interim rules 8) The FCC's advisory committees 9) Enforcement accountability for fines and penalties.

New Ideas: First, I suggest that the FCC should be obligated to justify why and how each statutory provision is used in an item. Second, as long as the Process Review Task Force is going to examine other agency practices, we should give a hard look to one used by the Federal Trade Commission, which can vote to bar staff from working on a subject if three Commissioners vote to do so. Third, we should publish any rules adopted at an Open Meeting on the same day. Last and not least, the FCC should establish formal rules for all of its internal procedures contained in the Code of Federal Regulations, not just an informal and out-of-date internal handbook. Let's provide a little more sunlight so everyone knows the process by which items will be considered.

What we’ve learned from one year of Internet.org

[Commentary] Facebook is celebrating the one-year anniversary of the launch of Internet.org, its much-hyped initiative to bring Internet access to the world’s unconnected population. So how has Internet.org stacked up against expectations since its initial debut in Zambia in summer 2014? Providing the world with free Internet connectivity. By conventional benchmarks, Internet.org seems to be performing well. After all, more than 9 million people have ventured online as a result of accessing Facebook’s Internet.org mobile app. And the initiative has taken off from its initial launch in Zambia to include a dozen mobile operators and 17 partner countries (including India, Pakistan and Indonesia) spread across three different continents (Asia, Latin America and Africa).

But there have been hiccups along the way -- most notably in India, where the very concept of using the Internet.org app as the way Indians access the Internet has raised troubling questions about Facebook’s role. Is the company a gateway or a gatekeeper? Facebook claims it’s a gateway, but there’s something that rubs people the wrong way when they are told which sites are free, and which are not, and how they must access them.

[Dominic Basulto is a futurist and blogger based in New York City]

What’s Inside the Justice Department’s Secret Cybersecurity Memo?

Sen Ron Wyden (D-OR) has many problems with the cybersecurity bill that the Senate may take up before the August recess. But he can only talk about some of them publicly. Other reservations remain strictly classified. Sen Wyden, the Democratic privacy hawk from Oregon, claims that a classified Justice Department legal opinion written during the early years of the George W. Bush Administration is pertinent to the upper chamber's consideration of cyberlegislation -- a warning that reminds close observers of his allusions to the National Security Agency's surveillance powers years before they were exposed publicly by Edward Snowden.

The Obama Administration pledges that it does not rely upon the memo, which some privacy experts have speculated could be used under the auspices of cybersecurity to allow government surveillance of Americans' Internet usage. Sen Wyden and civil-liberties advocates worry that the memo could be invoked by a future president, a concern fueled in part by the use of other Bush-era legal opinions written to justify warrantless surveillance and the CIA's so-called "enhanced interrogation techniques" during the war on terror. Sen Wyden has railed against the information-sharing legislation passed out of the Senate Intelligence Committee as a "surveillance bill by another name." While its boosters say it could help minimize the damage wrought by hacks like those that crippled Sony Pictures or laid bare the Office of Personnel Management's records of federal employees, Sen Wyden insists that the Cybersecurity Information Sharing Act, or CISA, is overly broad and that evidence is thin that it would improve cybersecurity.

Benton

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