August 2015

The Federal Communications Commission hasn’t started the informal merger review clock on the Charter deals because of a secret proposal FCC Chairman Tom Wheeler is tying to the review process. It’s so secret that not even the media companies that would be affected knew about it until they spoke to people in the FCC. The only official indication that anything was circulated is a two-line item listed under the FCC’s “items on circulation list.” Chairman Wheeler wants to weaken the legal standard used to determine if certain confidential information given to the commission in the course of a merger review can be shared with third parties.

The proposal was circulated to the other four commissioners as part of the standard protective order for the Charter deals (which would start the merger clock). If Chairman Wheeler’s proposal is adopted, it could be déjà vu for the media companies that fought and won a legal challenge in the D.C. Circuit Court of Appeals against the FCC to keep proprietary programming agreements confidential from third parties during the review of the AT&T-DirecTV and Comcast-Time Warner Cable deals. While the case was pending, the FCC paused the merger shot clocks for both deals. The FCC “wants to make it easier for the agency to disclose proprietary information without telling anybody. It’s a substantial change in how the agency does business,” said one broadcast exec. Media companies including CBS, Scripps Networks Interactive, Time Warner Inc., 21st Century Fox, Viacom, CBS, and Disney, held discussions with the staffs of the other four commissioners. In an ex parte filed July 31, the media companies argue that “disclosure of their competitively sensitive information was not necessary to the commission’s evaluate of the proposed transaction,” noting that the FCC had “successfully reviewed two proposed mergers [AT&T-DirecTV and Comcast-Time Warner Cable]…without disclosing such information.” If the FCC wants to modify its policies and procedures for protecting confidential information, the FCC should hold a separate proceeding and seek public input, the media companies argued.

The 4th Circuit Court of Appeals ruled that the government cannot obtain information about a cellphone's location without a warrant. The split decision concluded that warrantless searches of cellphone data are unconstitutional, a victory for privacy advocates who have sought new protections for people’s information. “We conclude that the government’s warrantless procurement of the [cell site location information] was an unreasonable search in violation of appellants’ Fourth Amendment rights,” Judge Andre Davis wrote on behalf of the majority of the three-judge panel. “Examination of a person’s historical [cell site location information] can enable the government to trace the movements of the cellphone and its user across public and private spaces and thereby discover the private activities and personal habits of the user,” he added. “Cellphone users have an objectively reasonable expectation of privacy in this information."

Cellphone providers such as AT&T and Verizon keep records whenever cellphones exchange radio waves with a local tower. Phones typically are in touch with their nearest cell tower, so a person’s movement can effectively be tracked by looking at which towers a phone communicates with. Law enforcement officials relied in part on those types of records when they charged two men, Eric Jordan and Aaron Graham, in connection with a series of armed robberies in Baltimore (MD) five years ago. Police obtained court orders but not warrants to obtain location data about their phones covering a total of 221 days. In doing so, they violated the Constitution, Davis said. But because the government relied “in good faith” on those court orders, the court declined to toss out the convictions. Still, the decision is a boon for proponents of increasing privacy protections for people’s cellphones and location information.

Since it was instituted in the 1980s, the Computer Fraud and Abuse Act has been the government's primary tool for going after malicious hackers. But it's also has drawn the ire of cybersecurity researchers who fear the law is too broad -- and potentially criminalizes some of the things they do to help make systems safer. At the Black Hat USA security conference, a top Department of Justice official tried to convince a ballroom of cybersecurity researchers that they shouldn't be in fear. "We have a great deal of respect for the people in this room," Leonard Bailey, special counsel for national security in the Department of Justice's Computer Crime & Intellectual Property Section, told the group. "My goal today is to provide information you can use to better manage your risk when you do what you do." Prosecutions of criminal computer fraud is a small part of what the agency does, Bailey said.

But cybersecurity professionals should think carefully about the scope of their research and the way they approach companies when they discover a security flaw, he said. The CFAA was passed in 1986 -- an era in which computer crimes were often poorly understood on Capitol Hill. The law has been broadened over the years -- to the point where some prosecutors have used it go after people for things like violating a Web site's terms of service. (Think about that the next time you "borrow" someone's HBO Go login.) There have been unsuccessful efforts to amend the law, including the so-called "Aaron's Law" in the wake of Aaron Swartz's death. The Department of Justice has also said it was open to reforming the legislation, though security experts say the Obama Administration's proposals do not solve some of the laws most glaring issues. In the meantime, DOJ has implemented policies in recent years to make sure there is "more consistent implementation" of CFAA, Bailey said. "In our outreach to this community, one of these things we've heard are concerns about the CFAA and how it may be chilling legitimate security research," he said. "That's something that does, in fact, concern us."

Apple Music, the company’s new streaming service, attracted 11 million people for its trial period in a little more than a month, top executive Eddy Cue said. Apple Music was introduced on June 30 in more than 100 countries with a trial plan that gave each user three months of access free. After that period ends, the service will cost $10 a month. Of the 11 million sign-ups, two million are for family plans that will cost $15 a month and give access for up to six people, said Cue, Apple’s senior vice president for Internet software and services.

The meaning of Apple Music’s numbers is already being debated in music industry circles. Its 11 million users immediately makes Apple Music a major destination for online music; Spotify, its biggest competitor as a subscription outlet, has 75 million users, 20 million of whom pay, and has been in operation for seven years. But it remains to be seen how many of Apple Music’s new users will continue after their trial periods end and pay for streaming music. That will not become clear until at least October, when the free access for Apple Music’s first customers begins to expire.