July 27, 2015 (AT&T Closes $49 Billion DirecTV Buy)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, JULY 27, 2015
This week’s agenda https://www.benton.org/calendar/2015-07-26--P1W
OWNERSHIP
FCC Grants Approval Of AT&T-DirecTV Transaction - press release
AT&T Closes $49 Billion DirecTV Buy [links to web]
Dish Responds to FCC’s Move to Deny Spectrum Auction Discounts
INTERNET/BROADBAND
Republicans are trying to defund net neutrality. Will it work?
Akamai on broadband: A few surprises and a new (but useless) metric - Richard Bennett/AEI op-ed
Don’t Delay the Fiber Future - Verizon press release
Facebook and Other Tech Giants Expand Internet Access in Africa
WIRELESS/SPECTRUM
International Cooperation with Mexico for a Successful Incentive Auction - FCC press release
CONTENT
Ads for Podcasts Test the Line Between Story and Sponsor
Public Knowledge Urges US Trade Representative to Protect Fair Use and Public Domain - press release [links to web]
Everyone's getting the music streaming business wrong [links to web]
Colin Cowherd Tries to Explain Remarks on Dominicans [links to web]
LABOR
Is Uber a threat to democracy? - analysis
EDUCATION
The Best Screen Time
GOVERNMENT & COMMUNICATIONS
State Department Seeks Russian-speaking Social Media Maven [links to web]
LOBBYING
What Tech Giants Are Spending Millions Lobbying For
STORIES FROM ABROAD
Concerns grow over EU digital rules targeting American companies [links to web]
Facebook and Other Tech Giants Expand Internet Access in Africa
OWNERSHIP
FCC GRANTS APPROVAL OF AT&T-DIRECTV TRANSACTION
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission grants – with conditions – approval of the transfer of control of licenses and authorizations from DIRECTV to AT&T. The approval will allow AT&T to acquire DIRECTV and merge the two companies into one combined entity. Based on this review, the FCC has determined that granting the application, subject to certain conditions, is in the public interest. AT&T-DIRECTV will be required to expand its deployment of high-speed, fiber optic broadband Internet access service to 12.5 million customer locations as well as to E-rate eligible schools and libraries. In addition, AT&T-DIRECTV is prohibited from using discriminatory practices to disadvantage online video distribution services and will submit its Internet interconnection agreements for FCC review. Finally, AT&T-DIRECTV will offer broadband services to low-income consumers at discounted rates. The conditions imposed by the Commission address potential harms presented by the combination of AT&T, one of the nation’s largest telephone and Internet service providers, and DIRECTV, the nation’s largest satellite video provider. The conditions also ensure that the benefits of the merger will be realized. These targeted conditions, which generally will remain in effect for four years after the merger closes, include:
Fiber to the Premises (FTTP) Deployment. Recognizing that the merger reduces AT&T-DIRECTV’s incentive to deploy FTTP service, the Commission adopts as a condition of this merger the expansion of FTTP service to 12.5 million customer locations. This condition also responds to the harm of the loss of a video competitor in areas where AT&T and DIRECTV had directly competed before the merger by providing a pathway for increased competition from services that rely on broadband Internet to deliver video.
Gigabit Service to E-rate Eligible Schools and Libraries. In addition, to ensure that schools and libraries also benefit from expanded fiber deployment to consumers and institutions, the Commission is also requiring AT&T-DIRECTV to offer gigabit service to any E-rate eligible school or library where AT&T-DIRECTV deploys FTTP service.
Non-Discriminatory Usage-Based Practices. Recognizing that AT&T is the only major ISP that applies “data caps” across the board to all of its fixed broadband customers and that this merger increases the incentive of AT&T-DIRECTV to use strategies that limit consumers’ access to online video distribution services in order to favor its own video services, the Commission requires AT&T-DIRECTV, as a condition of this merger, to refrain from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet service.
Internet Interconnection Disclosure Requirements. Recognizing the importance of interconnection to the operation of online video services, the Commission also requires as a condition of this merger that AT&T-DIRECTV submit its Internet interconnection agreements so that the Commission may monitor the terms of such agreements to determine whether AT&T-DIRECTV is denying or impeding access to its networks in anticompetitive ways through the terms of these agreements.
Discounted Broadband Services for Low-Income Subscribers. While finding that the availability of better and lower priced bundles of video and broadband service is a potential benefit of the merger, the Commission also concludes that the public interest requires us to ensure that a bundle of video and broadband services is not the only competitive choice for low-income subscribers who may not be able to afford bundled services. The Commission accordingly requires as a condition of the merger that AT&T-DIRECTV make available an affordable, low-price standalone broadband service to low-income consumers in its broadband service area.
Compliance Program and Reporting. Given the important role that these conditions serve in securing the public interest benefits of the merger, the Commission requires that AT&T-DIRECTV retain both an internal company compliance officer and an independent, external compliance officer that will report and monitor, respectively, the combined entity’s compliance with all conditions of the merger.
An Order detailing the FCC’s reasoning and the conditions will be issued shortly.
benton.org/headlines/fcc-grants-approval-att-directv-transaction | Federal Communications Commission
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DISH RESPONDS TO FCC'S MOVE TO DENY SPECTRUM AUCTION DISCOUNTS
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran]
Dish Network confirmed July 24 that Federal Communications Commission Chairman Tom Wheeler has circulated a draft order to deny $3.3 billion in small business discounts sought by the satellite provider’s affiliated entities in an airwaves auction earlier in 2015. Dish Executive Vice President Stanton Dodge said, “we respectfully disagree with the proposed denial of the bidding credits.” He said Dish followed all the legal requirements needed to qualify and noted that the satellite provider’s participation in the auction helped make it the “most successful” one in the FCC’s history. Dish said it met with the FCC’s wireless bureau July 22 and was told about the contents of the order. The FCC staff’s analysis found that Dish does, in fact, have a “controlling interest” in its affiliated bidding entities, SNR Wireless and Northstar Wireless. Therefore, Dish’s revenues were attributed to those entities, making them ineligible for the 25 percent bidding credit for small businesses under the FCC’s rules, Dish said. Dish provided 85 percent of the capital in both Northstar and SNR. But in filings with the FCC, both entities had reported revenue of less than $15 million and said that Dish didn’t control them. The two entities won $13.3 billion in wireless licenses in the auction earlier in 2015. The FCC found that SNR and Northstar are still eligible to hold those licenses, Dish said. The FCC told Dish representatives in the meeting that it will not designate the matter for a hearing or refer it to the enforcement bureau or Justice Department.
benton.org/headlines/dish-responds-fccs-move-deny-spectrum-auction-discounts | Wall Street Journal
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INTERNET/BROADBAND
REPUBLICANS ARE TRYING TO DEFUND NET NEUTRALITY. WILL IT WORK?
[SOURCE: Washington Post, AUTHOR: Brian Fung]
It's no secret that many Republicans hate the Federal Communications Commission's net neutrality rules, which went into effect this June and regulate Internet providers like legacy telephone companies. Some now want to use Congress' power of the purse to roll those regulations back. If it works, Congress could forbid the FCC from using its budget to enforce net neutrality and give Internet providers a come-from-behind victory. During the week of July 20, the Senate Appropriations Committee approved a bill that contains an amendment singling out the FCC and net neutrality. Notably, the rider would prohibit the FCC from using its most powerful regulatory tool to police Internet providers -- Title II of the Communications Act. A similar funding bill in the House goes even further, blocking the FCC from enforcing any of the net neutrality regulations until an industry lawsuit to overturn the rules gets resolved. Oral arguments in that case are expected in December or January. But would President Barack Obama even sign a funding bill that has an anti-net neutrality rider attached? This is a tricky question that wraps in a lot of non-tech issues: If the bill gets to the Oval Office, President Obama would have to choose between an issue that he has strongly supported and the continued functioning of the federal government. It's a tough call, and could go either way. But it probably won't even come to that, because Republicans appear split on these funding bill riders. Ultimately, this disagreement over strategy may be what foils the amendments.
benton.org/headlines/republicans-are-trying-defund-net-neutrality-will-it-work | Washington Post
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AKAMAI ON BROADBAND: A FEW SURPRISES AND A NEW (BUT USELESS) METRIC
[SOURCE: American Enterprise Institute, AUTHOR: Richard Bennett]
[Commentary] Akamai’s most recent “State of the Internet” report is 60 pages of insightful data on broadband around the world. The report contains reiterations of many things we already knew (including that the US is not, in fact, falling behind), but also offers some surprising insights into IPv6 adoption and a completely new -- albeit somewhat useless -- metric. In terms of Internet speeds in different US states, Delaware ranks number one with an average peak (Akamai’s measure of broadband capacity) of 85.6 Mbps. If Delaware were a country, it would rank 3rd overall, behind Singapore and Hong Kong. In the overall global ranking, Singapore retains the lead with an average broadband capacity of 98.5 Mbps. Because it’s not reasonable to compare small countries to big ones and urban countries with suburban ones, I like to compare the nations in the G7 with each other. While there are few surprises in Akamai’s speed rankings, IPv6 adoption rankings is a different ballgame. Belgium is the world leader in IPv6, followed by Germany and then the US. This is surprising since conventional wisdom says China – who didn’t even make the top 10 – is the biggest adopter. There may be a lot of IPv6 within China, but none of the external sensors see it. I expect the island nation will be the world’s first to break the 100 Mbps barrier. To sum up, global broadband speeds continue to rise at a rapid rate, especially in small, densely populated areas, and IPv6 is catching on, especially in the US and Western Europe. So there you have it folks, this is the State of the Internet.
[Richard Bennett was vice-chair of the Institute of Electrical and Electronics Engineers (IEEE)]
benton.org/headlines/akamai-broadband-few-surprises-and-new-useless-metric | American Enterprise Institute
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DON'T DELAY THE FIBER FUTURE
[SOURCE: Verizon, AUTHOR: David Young]
There is no disputing that fiber is the best wireline broadband communications infrastructure. So it is no surprise that communities across the country are trying to attract fiber deployments in their areas and President Barack Obama has created a Broadband Opportunity Council to identify ways of removing barriers to new broadband deployment. That is why it is strange that some parties are asking the Federal Communications Commission to consider rules that, rather than encouraging the move to fiber, would divert investment dollars into the very legacy copper networks that they have already acknowledged cannot provide real competition for cable at the higher speeds. Make no mistake, rules that force companies to invest in copper networks, even where they are already deploying new fiber networks, would significantly delay the fiber future. Specifically, some parties are asking the FCC to adopt rules to address “de facto copper retirement,” a made-up problem based on the unfounded claim that copper networks are being allowed to deteriorate to the point of not being usable. Despite some cherry-picked anecdotes provided by advocates with a vested interest in having us spend more money on two parallel wireline networks, the objective performance data makes it clear that there simply is not a problem. The FCC and other policy makers rightly recognize that only new fiber deployments can improve the quality and range of services available to consumers, while also accelerating competition at the highest broadband speeds. Creating new rules that would divert investment from fiber to keep redundant copper networks would be a major step backwards for consumers and competition.
benton.org/headlines/dont-delay-fiber-future | Verizon
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EXPANDING ACCESS IN AFRICA
[SOURCE: New York Times, AUTHOR: Vindu Goel]
Nearly two years ago, Facebook’s chief executive, Mark Zuckerberg, announced an ambitious effort to connect the world’s poorest people to the Internet. Zuckerberg’s vision — carried out with partners through an entity called Internet.org — encompasses a range of strategies, including lasers, drones and satellites beaming Internet signals down from the sky. Today, tens of millions of people have tasted the Internet through it, and as of May, more than nine million of those newcomers have become regular users of Internet services, the company says. “Internet.org is really showing people the value of the Internet,” said Chris Daniels, vice president of Internet.org The next stage, which Daniels plans to announce at a software developers conference on July 27, is to vastly expand the number of carriers who offer Internet.org.
benton.org/headlines/facebook-and-other-tech-giants-expand-internet-access-africa | New York Times
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WIRELESS/SPECTRUM
INTERNATIONAL COOPERATION WITH MEXICO FOR A SUCCESSFUL INCENTIVE AUCTION
[SOURCE: Federal Communications Commission, AUTHOR: Mindel DeLaTorre, Gary Epstein]
Coordinating with Mexico and Canada to harmonize our TV and wireless spectrum bands is a critical component of meeting the Federal Communications Commission’s goals for the Incentive Auction. We are thrilled to be able to report some exciting progress on this front. During the week of July 13, the Mexican communications regulator, the Instituto Federal de Telecomunicaciones (IFT), confirmed through an exchange of technical coordination letters with the FCC that our two agencies intend to follow common guidelines for repacking TV stations that will clear 600 MHz spectrum for mobile broadband use in both countries. In 2014, Mexico announced its plan to relocate all of its television stations below channel 37, and this exchange of letters outlines the procedures by which we will work together to help advance the ongoing FCC and IFT spectrum reconfiguration process. They also describe the procedures by which the two agencies intend to help advance both Mexico’s analog-to-digital transition and the ongoing FCC and IFT spectrum reconfiguration process. Taken together, these steps are another milestone on the road to a successful Incentive Auction. Many thanks to our counterparts at IFT for their hard work and cooperate efforts to reach this point.
benton.org/headlines/international-cooperation-mexico-successful-incentive-auction | Federal Communications Commission
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CONTENT
PODCAST ADS
[SOURCE: New York Times, AUTHOR: Dino Grandoni]
Podcasts — audio stories that can be saved and played on a computer or smartphone — have reached new levels of popularity. The uptick in popularity has made podcasting a rare cause for optimism in serious journalism. Podcasting often offers an in-depth form of reporting that advertisers want to pay for and that is attracting talent largely from radio. Behind much of podcasting’s growth, though, is the embrace of ads in which hosts gush over products or even do reporting for advertising spots. That has led to a clash between those coming from public radio and those with a commercial radio background, with some expressing concern that journalists, who rely on trust, are using their position of confidence to push products. The line between advertising and news has never been quite as sharp on commercial radio as on public radio. Because of Federal Communications Commission rules forbidding advertising on public radio, those journalists, who have flocked to podcasts, stayed out of the endorsement business — until the advent of stand-alone podcasts, which are not regulated by the FCC.
benton.org/headlines/ads-podcasts-test-line-between-story-and-sponsor | New York Times
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LABOR
IS UBER A THREAT TO DEMOCRACY?
[SOURCE: Brookings, AUTHOR: Kemal Dervis]
[Commentary] Uber, which enables people to connect with available drivers through a smartphone app, is precisely the kind of disruptive company that is driving the shift towards increased machine productivity and declining demand for human work. Taxi drivers in France and around the world are particularly incensed about UberPOP (called UberX outside Europe), a no-frills service. Uber has since withdrawn UberPOP from France, at least temporarily -- though not before two of its top managers were arrested for ignoring the government’s injunction to suspend UberPOP. But the kind of innovation that Uber exemplifies will not be stopped so easily. Uber’s software, in a sense, does the job of thousands of Walrasian auctioneers acting locally in space and time, leading to almost perfect price discrimination. Airlines have long employed such price discrimination, offering multiple prices for the same distance flown, depending on date and time. But Uber price setting is unique in its immediacy, which it has achieved by taking full advantage of modern communications technology. In terms of work, Uber creates more jobs than it destroys. This leads to a clear increase in efficiency and provides overall income gains. Even if losers were fully compensated, the sum of the gains -- shared by the firm, its mostly part-time workers, and its customers -- would far outweigh the losses. Nevertheless, there are real problems that must be addressed. For starters, there are the losers: traditional taxi drivers, who often have had to pay large license fees and thus cannot compete with Uber’s low prices. While this problem always arises when disruptive new technologies appear, innovation and adoption are occurring faster than ever. Taxi drivers are being asked to adjust in a matter of days, rather than years, leaving democratic systems little time to determine how much compensation they should receive, and how it should be distributed.
benton.org/headlines/uber-threat-democracy | Brookings
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EDUCATION
THE BEST SCREEN TIME
[SOURCE: Slate, AUTHOR: Chris Berdik]
A program to help low-income parents learn alongside their children in the hope that they will encourage more productive screen time. “The goal,” said Jamie Dunne-Duarte, the Haynes librarian, “is to help the parent get comfortable with the technology, so they can get involved and engage with their child’s use of the computer, to see it as a learning tool, instead of a pacifier or a babysitter." The initiative was launched in 2014 by Tech Goes Home, part of the nonprofit Open Air Boston, which works to expand Internet access in the city’s low-income neighborhoods. TGH trains teachers and administrators at local schools to lead the classes, in which parents are encouraged to ask their kids questions about what they’re doing and learning as they work on the computers. The goal is to bring technology to the pre-K crowd and help bridge the digital divide. In both efforts, parents are key.
benton.org/headlines/best-screen-time | Slate
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LOBBYING
WHAT TECH GIANTS ARE SPENDING MILLIONS LOBBYING FOR
[SOURCE: Wired, AUTHOR: Issie Lapowsky]
Tech companies already own Silicon Valley, but new lobbying disclosure documents reveal just how much weight they throw around Washington as well. While their policy concerns are not altogether surprising, they do tell a cohesive story about what the tech giants driving the industry consider to be its most pressing issues. The enduring issue of patent reform, for instance, received substantial attention from Google, Amazon, Facebook, and Apple this quarter, with companies urging lawmakers to address issues like intellectual property protection and patent litigation reform. Specifically, they lent their support to the proposed Innovation Act, which aims to cut down on the number of abusive lawsuits initiated by patent trolls. Immigration issues also topped the list as the companies lobbied the government to create more pathways for high-skilled foreign workers. The companies also prioritized taxation and trade policies. Facebook lobbied for the extension of the R&D tax credit. Amazon lobbyists, meanwhile, pursued the issue of the Remote Transactions Parity Act of 2015, an Internet sales tax Amazon has endorsed that would require online stores to pay taxes in each state in which they sell goods. Most of these issues are perennial topics for tech businesses in Washington. But the disclosure forms also reveal cottage interests of each company. Google, for instance, which has a substantial footprint in schools already thanks to its Chromebooks, pushed policymakers to promote the issue of connected education. Apple lobbied the Justice Department on issues related to government requests for data, which CEO Tim Cook has publicly opposed. And Amazon, determined to some day deliver packages by drone, lobbied the FAA and others on issues surrounding the regulation of unmanned aerial vehicles. As we head into the 2016 election season, one in which tech donors are expected to play a bigger role in campaign financing than ever before, it will only become more important to watch which issues these money movers stand behind.
benton.org/headlines/what-tech-giants-are-spending-millions-lobbying | Wired
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