July 2015

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.

A new report from the Berklee Institute for Creative Entrepreneurship says royalty squabbles between streaming services and artists miss the point. In fact, there are a bunch of other players, complex accounting and backroom deals that stand between the royalties services pay out and the artists' paychecks. "We were trying to figure out what exactly happens in the value chain from the minute I [listen] to music, to the minute the creator on the other end gets paid," says Allen Bargfrede, Berklee associate professor and one of the authors of the report. Berklee has launched a new initiative, Rethink Music, to untangle all the streams of money, dispel misconceptions about the business and propose more transparency. $0.68 --that's the portion of a $9.99 monthly subscription to a streaming service actually makes it to artists, according to the Berklee report, and all told, labels keep about 73 percent of royalties from streaming. But that doesn't even tell the whole story.

Here's the rub: those royalties are passed down a line of rights groups, publishers or third-party distributors before they make it to the label and then the artist. These players are supposed to divvy up the royalties companies like Spotify are paying out, which is complicated; the composition and recording are usually two separate copyrights, or there might be several co-writers or publishers. All the agreements dictating those payments are secret, and researchers found that royalty statements were difficult to parse. Bargfrede says Rethink Music got a hold of one statement from a "platinum-selling artist" signed to a major label and traced back the average royalty rate per stream, but it's difficult to know how accurate those numbers are if a sizable chunk of royalty payments don't make it to artists at all. "There are a lot of things that could be fixed here, and there's a lot of foot-dragging," he says. "You're looking at a legacy business that's decades old, and it takes time to adopt new technology. But it's time to say, 'OK lets march forward, we need to do this,'" Bargfrede says.

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.

The State Department wants to be able to communicate directly with hundreds of millions of Russian-language speakers, and could soon be taking to Twitter. The department issued a pre-solicitation notice seeking a Russian-speaking vendor with expertise in Twitter, Facebook, YouTube and other social media platforms. Eventually, the department plans to create Russian-language State Department accounts, to be maintained by this vendor "on a daily basis -- including evenings, holidays and weekends," the notice said.

The new Russian Twitter account would complement the department's other accounts, which usually translate what's being posted on the official English-language account -- @StateDept -- such as news about the Iran nuclear deal. Other official State Department accounts are in languages including Spanish, Arabic, Portuguese and French. "What we really try to do is try to make sure people are hearing [news] directly from us...versus having it translated for us," said Moira Whelan, the deputy assistant secretary for digital strategy in the Bureau of Public Affairs. Her goal is to "reach people where they are, and be part of that conversation." Including accounts handled by US embassies in other nations, the State Department operates about 400 Twitter handles, reaching about 35 million people a year, Whelan said.