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October 2015

Why the FCC's AllVid remains a really bad idea

[Commentary] Referred to as "AllVid," the Federal Communications Commission's idea was to force all cable and satellite video providers to establish a common interface for connection to televisions, DVRs and other smart video devices. First, in contrast to the common view that the self-supply model of set-top boxes is anticompetitive and anti-consumer, the set-top box conveys no market power to the cable and satellite video provider, even under the assumption of monopoly supply for multichannel services. If the equipment can be produced more efficiently and sold at a lower price in a competitive retail market, then the provider will embrace such a market to the benefit of both provider and the consumer. If the equipment can be sold at a lower price through self-supply, then the providers prefer that option, also to the benefit of both provider and consumer. Third, a government-directed commercial market for set-top boxes is unlikely to provide substantial gains in terms of lower costs, lower prices or increased innovation. Finally, advances in technology now allow consumers to access lawful content from both multichannel video providers and "Over the top" providers on an array of third-party devices through dedicated apps.

At bottom, the notion that AllVid makes any economic sense, just as folks thought that its predecessor CableCARD regime made any sense, is misguided.

[Spiwak is the president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]

Trump 'SNL' Hosting Triggers FCC Time Requirements

NBC affiliates may want to get their stop watches out when Donald Trump hosts Saturday Night Live. Per Federal Communications Commission rules, qualified candidate appearances on non-news broadcasts are subject to the "equal opportunities" requirement, which requires TV stations who give airtime to one candidate to offer other qualified candidates for the same office an equivalent amount of airtime on the station. NBC could ask the FCC for a ruling that the show was a bona fide news broadcast or news interview program or documentary, and thus exempt from the requirement, but that would be a stretch.

The FCC makes such rulings on a case-by-case basis, including in the past that Entertainment Tonight was a news show that did not trigger equal opportunities requirements. Instead, look for it to advise affiliates of their obligation to post a notification in their FCC online political files of Trump's appearance and the exact screen time. That will trigger a seven-day window for Trump's opponents, so long as they are declared candidates and have been active in the state where the TV station is located, to seek a similar amount of time.
The requirement is on stations, not networks, to provide that equal opportunity,

Zoom Says FCC Should Block Charter/TWC

Set-top maker Zoom Telephonics has asked the Federal Communications Commission to deny the Charter/Time Warner Cable merger, primarily over the issue of access to third-party set-tops. Since 2012, Charter has bundled the price of leasing its modems into the overall price of service, which Zoom has said gives customers no financial incentive to purchase their own devices. Zoom also petitioned the FCC to deny the Comcast/TWC deal over the issue, saying that if the FCC did approve that deal--it didn't--it should condition that approval on Charter stating an unsubsidized price for leasing cable modems and not “unreasonably” refusing to allow “nonharmful” modems to attach to its network.

In its petition to deny the Charter/TWC deal, filed Oct 13, Zoom repeated its charge that bundling the price means there is not savings for customers who opt for their own cable modems. Zoom says that most of the third-party modems Charter has certified for use are not available at brick-and-mortar retailers, and others are not readily available. But even when they are available, it says, the bundled pricing discourages customers from purchasing them.

Dish Asks FCC to Deny Charter/TWC

Dish has asked the Federal Communications Commission to reject the Charter/Time Warner Cable merger. In a petition filed Oct 13, the satellite operator pointed to the "potential for the merger to significantly damage competitive development of over-the-top (OTT) video and limit consumer access to online video programming." Joining with Dish was Roger Lynch, CEO of Sling TV, who included in the petition this declaration: “I believe that the proposed merger.... would cause significant and irreparable harm to emerging competitive online video products and services, as well as the performance of traditional satellite television service, ultimately reducing competition and choice for consumers. Accordingly, I believe that the merger as currently constructed is not in the public interest and should be denied.”

Dish says that the problems with the deal cannot be remedied with conditions, but if the FCC disagrees, those conditions should include prohibiting the merged company from "restricting the ability of third-party programmers to grant online rights to OVDs," and should require it to unbundle its broadcast services by offering residential stand-alone services and bundle its broadband with competing pay-TV and online video providers (OVD) services. In addition, it should have to abide by the FCC's Open Internet order regardless of whether or not it is overturned by the court.

Studios, Networks Ask FCC to Rethink Charter/TWC Protective Orders

The TV and movie studios and broadcast networks have asked the Federal Communications Commission to reconsider its protective orders in the proposed Charter/Time Warner Cable/Bright House merger, saying they are illegal violations of the Trade Secrets Act and Administrative Procedures Act. Those provide the framework for how the FCC deals with sensitive business information submitted by the parties wishing to merge, including programming contracts with program providers, like studios and broadcast networks.

The petitioners are the same groups who petitioned the FCC to reconsider its protective orders and their sharing of program contract info in the Comcast/TWC and AT&T/DirecTV merger reviews, then took the FCC to court when it declined to do so. The US Court of Appeals for the DC circuit overturned those orders, saying the FCC had not sufficiently justified its decision for making program contract work product widely available to the representatives of hundreds of third parties, including competitors and consolidation critics. But the court also remanded the orders back to the FCC for better justification. In the meantime, the FCC nixed the Comcast/TWC deal and approved the AT&T/DirecTV deal.

Seniors and the Internet: 27 Percent Are “Virtual Shut-Ins,” Survey Finds

More than one-quarter of seniors 80-plus (27 percent) are “virtual shut-ins” unable or not interested in using the Internet or social networking as a result of their inability to use the Internet or the need for assistance, according to “Rewiring Aging.” Sponsored by Brookdale Senior Living and conducted by market researchers at Kelton in collaboration with the Stanford Center on Longevity, the survey is the first in-depth study to examine how online social networking and the use of other digital telecommunications technology can improve well-being and quality of life among seniors, the fastest growing demographic segment in the US.

The negative effects of being virtual shut-ins are akin to those of seniors who are isolated and unable to venture out due to physical disabilities or cognitive impairment, the researchers found. Virtual shut-ins reported lower overall satisfaction with life, poorer physical health and greater loneliness than the survey group in its entirety. However, nearly 6 in 10 seniors surveyed said they believed communication with family and friends could improve through the use of technology. Those who use social networking technology said they were more satisfied with their lives, were healthier and were more likely to achieve life goals than those who did not.

New EU Law Will Tell US What Can Be Said -- And Built -- On the Internet

[Commentary] Americans have long been ignoring European data protection law, but it has not been ignoring us. Now a new EU-wide regulation is nearly final, and it will set the rules for these and other data protection questions for years to come. It’s time to pay attention.

The new law is the General Data Protection Regulation (GDPR). It does a lot of good things for Internet users -- giving us the right to extract our data from one service to migrate to a competing one, for example. And it does a lot of things that -- like the “right to be forgotten” -- seem odd to Americans but align with the general European perspective on privacy and government regulation. The sad truth is that it is probably too late to change many of the GDPR’s problems. There may be room for improvement at the margins, but even that won’t happen unless affected Internet users, technologists, companies, industry associations and civil society groups raise a fuss. Soon.

[Daphne Keller is the director of intermediary liability at the Stanford Center for Internet and Society]

Solving the Unsolvable on Safe Harbor -- The Role of Independent DPAs

[Commentary] Since the European Court of Justice (ECJ) announced its Schrems decision on October 6, there has been understandable consternation about what comes next -- is there any legal and practical way forward on EU/US data flows? Fortunately, we have faced a similar situation once before, and solved it. That earlier experience, in the late 1990s, suggests a promising path this time as well. Notably, this path reaffirms the lawfulness of Binding Corporate Rules (BCRs) and model contract clauses, thus providing ongoing, lawful means of transferring personal data to the US.

The ECJ, in Schrems, has affirmed a bedrock principle, that an independent authority must be in place to protect EU citizens’ fundamental right to privacy. At a formal level, independent authorities have this authority when they approve and oversee BCRs and contract clauses, so BCRs and clauses are fundamentally consistent with the right of redress and the Court’s opinion. There are numerous challenging issues ahead as the EU implements Schrems and moves forward with the General Data Protection Regulation. As in the 1990s, however, there is a legal path forward for transfers of data, especially when the analysis includes a fair understanding of what the EU expects of its own organizations.

[Peter Swire is the Huang Professor of Law and Ethics at the Georgia Tech Scheller College of Business, and Senior Counsel with Alston & Bird LLP]

October 14, 2015 (Cubs over Cardinals!)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, OCTOBER 14, 2015 (Cubs Magic Number is 8!)

Digital Media and Developing Minds in Irvine (CA) today https://www.benton.org/calendar/2015-10-14

BROADBAND/TELECOMMUNICATIONS
   4.2 billion people are still offline
   Report: AT&T TDM-to-IP Transition Trial Results are Disappointing
   Verizon furthers copper-to-fiber replacement strategy in 4 states

OWNERSHIP
   FCC Review of Charter-TWC Merger Focusing on Broadband Impact
   Public Knowledge Files Petition to Deny Proposed Charter, Time Warner Cable Merger [links to Public Knowledge]
   Free Press Files Petition to Deny Charter Takeover of Time Warner Cable [links to Free Press]

CONTENT
   Apple E-Book Antitrust Monitoring May End After Rocky Course
   Copyright battle over sports clips plays out on Twitter
   New-Media Companies Shift Attention to TV
   The fascinating economics behind Playboy's decision to drop nudes from its magazine [links to Vox]

TELEVISION
   What is localism and does it still matter? - TVfreedom.org op-ed [links to Benton summary]

PRIVACY
    Intercede: Millennials Don't Trust Government With Their Online Information [links to Benton summary]

CYBERSECURITY
   Will the costs of cyber insecurity outweigh connectivity's benefits? [links to Atlantic Council video]

ACCESSIBILITY
   Dept of Education Awards $4.8 Million to Improve Outcomes for Children with Disabilities through Improved Adolescent Literacy, Accessible Technology, Media Services and Educational Materials [links to Department of Education]

PATENTS
   Apple loses patent lawsuit to University of Wisconsin, faces hefty damages [links to Reuters]

POLICYMAKERS
   FCC Chairman Tom Wheeler Announces Staff Changes - press release

STORIES FROM ABROAD
   Achieving a Global Information Society: Linking the UN’s Sustainable Development Goals with WSIS+10 - Public Knowledge
   Apple News is blocked in China
   Facebook Goes On Privacy Offensive in Europe
   Editorial: European court ruling reveals trust issue for US tech [links to San Jose Mercury News]

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BROADBAND/TELECOMMUNICATIONS

4.2 BILLION PEOPLE ARE STILL OFFLINE
[SOURCE: CNNMoney, AUTHOR: Ananya Bhattacharya]
For majority of the world, "Googling" and "Facebooking" are not second nature. There are currently 4.2 billion people -- 57 percent of the world -- who are still offline on a regular basis, according to the United Nations Broadband Commission. Overall growth in Internet access is expected to slump down from 8.6 percent in 2014 to 8.1 percent in 2015. Around 70 percent of mobile and fixed subscriptions are concentrated in these two regions: Asia-Pacific and the Americas. Even though the report estimates that 60 percent of the world population should be online by 2021, the gap between the richer and poorer nations will most likely remain wide unless policy efforts are made to bridge that gap. Less developed countries have not adopted the internet with the same enthusiasm. Growing audiences in linguistically diverse areas, such as Africa, India and Southeast Asia, still proves to be a challenge. Most of the world's languages are not not represented online.
benton.org/headlines/42-billion-people-are-still-offline | CNNMoney
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REPORT: AT&T TDM-TO-IP TRANSITION TRIAL RESULTS ARE DISAPPOINTING
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
Only a small fraction of AT&T customers in areas where the company is conducting time-division multiplexing (TDM) to Internet Protocol (IP) transition trials are voluntarily switching off of traditional voice service, according to data published on the New Networks site provided by AT&T. The trials involve an urban area in Florida referred to as Kings Point (FL) or Delray Beach (FL), and a rural community -- Carbon Hill (AL). AT&T initially proposed the trials several years ago and according to New Networks Executive Director Bruce Kushnick, the trials kicked off over a year ago. In the trials, AT&T offered to replace traditional phone service with an IP-based alternative -- either an LTE-based fixed wireless service or, where available, a service based on the company’s U-verse fiber-to-the-node infrastructure. Kushnick said AT&T didn’t specify the number of customers choosing either of those options in data released publicly, instead providing a numberless graphic representation. But by laying a grid on the graphic, Kushnick estimated that in Kings Point, AT&T has not met its target take rates for the wireless alternative, known as Wireless Home Phone or VoiceLink, or for U-verse. Kushnick argues that some people in the AT&T trials may be reluctant to switch because they have alarm systems, medical alert systems, fax machines or other equipment designed to operate over traditional TDM lines.
benton.org/headlines/report-att-tdm-ip-transition-trial-results-are-disappointing | telecompetitor
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VERIZON FURTHERS COPPER-TO-FIBER REPLACEMENT STRATEGY IN 4 STATES
[SOURCE: Fierce, AUTHOR: Sean Buckley]
Verizon continues to make progress with its copper-to-fiber migration strategy. The service provider, according to a series of Federal Communications Commission filings, is retiring copper network facilities in White Plains (NY), Pittsburgh (PA), Falls Church (VA), and Providence (RI). Similar to other markets like New York City, when the migration is completed Verizon will no longer offer services over copper wires and maintain those facilities. However, it will continue to offer consumers and businesses a 64 Kbps grade public switched telephone network (PSTN) over the fiber connection. It emphasized that consumers, the majority of which are plain old telephone service (POTS) customers, will not see any effect to the services they use and it is not a transition to IP-based services. Verizon has not revealed whether it would try to upsell these customers with FiOS services now that they will be connected to the fiber-to-the-home network.
benton.org/headlines/verizon-furthers-copper-fiber-replacement-strategy-4-states | Fierce
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OWNERSHIP

FCC REVIEW OF CHARTER-TWC MERGER FOCUSING ON BROADBAND IMPACT
[SOURCE: Bloomberg, AUTHOR: Todd Shields]
Regulators weighing Charter’s $55.1 billion bid for Time Warner Cable are focusing on how the merger would affect Internet service. Requests for information were sent by the Federal Communications Commission to companies including top telephone providers AT&T and Verizon, largest cable provider Comcast, online video leader Netflix and Internet-traffic carrier Cogent Communications. This is the second time the FCC has asked questions related to the merger’s impact on broadband service. The agency in Sept asked Charter for documents about its customer gains or losses to Web video and whether that has slowed or blocked access to rival services. The FCC is in early stages of its review, having reached the 32nd day toward its informal 180-day deadline for deciding the merger. Questions from the agency, in the requests sent Oct. 9, included whether AT&T and Verizon plan to offer faster Internet service and how those companies and Comcast use data caps. The letters also asked Cogent and Netflix to offer comment on Charter’s pledge not to charge for accepting traffic onto its network.
benton.org/headlines/fcc-review-charter-twc-merger-focusing-broadband-impact | Bloomberg
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CONTENT

APPLE E-BOOK ANTITRUST MONITORING MAY END AFTER ROCKY COURSE
[SOURCE: Bloomberg, AUTHOR: Pamela Maclean]
The US Justice Department said it’s satisfied Apple put in place reforms to comply with antitrust laws even though it fought with a monitor appointed to oversee its sale of electronic books.
The government recommended that the monitoring not be extended. In a letter to the Manhattan federal judge who found in 2013 that Apple illegally conspired with publishers to set e-book prices, the Justice Department said Apple has “now implemented meaningful antitrust policies, procedures, and training programs that were obviously lacking at the time Apple participated in and facilitated the horizontal price-fixing conspiracy found by this court.” The Justice Department said Apple “never embraced a cooperative working relationship with the monitor.” Apple acknowledged its relationship with the monitor was “rocky at times,” but disagreed that it wasn’t willing to cooperate. Apple said in the joint letter to US District Judge Denise Cote that it’s committed to fulfilling its obligations, including training, antitrust risk assessment and audits. “Over the past two years, Apple has developed and implemented a comprehensive, engaging, and effective antitrust compliance program,” the company said.
benton.org/headlines/apple-e-book-antitrust-monitoring-may-end-after-rocky-course | Bloomberg
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COPYRIGHT BATTLE OVER SPORTS CLIPS PLAYS OUT ON TWITTER
[SOURCE: The Hill, AUTHOR: Mario Trujillo]
Twitter temporarily shut down a pair of prominent accounts run by sports news websites for posting short clips of NFL and college football highlights. Deadspin’s account and one run by SB Nation were removed after receiving takedown notices under the Digital Millennium Copyright Act, a law that says websites cannot be liable for what their users post but which also requires those websites to remove infringing content when it is flagged. Deadspin’s account was reinstated after being down for about two hours on Oct 12, while the SB Nation account was still down Oct 13.
The sharing of unauthorized sports highlights has been a point of past contention on social media platforms and how it relates to fair use. Deadspin told media organizations it received 18 takedown notices from the NFL about 16 tweets that included GIFs of football highlights. After Twitter stripped the GIFs out of the tweets, the account was reinstated.
benton.org/headlines/copyright-battle-over-sports-clips-plays-out-twitter | Hill, The
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NEW-MEDIA COMPANIES SHIFT ATTENTION TO TV
[SOURCE: Wall Street Journal, AUTHOR: Lukas Alpert]
Companies like BuzzFeed, Vice Media and Huffington Post are known as “new-media” specialists -- makers of lists, articles and videos designed to go viral online and lure young audiences. Now, they’re venturing aggressively into a decidedly old-media stronghold: television. There are a variety of potential models, most of which involve some sort of tie-up with traditional media companies: BuzzFeed says it may create TV shows with Comcast Corp.’s Universal Studios. Vice Media is in talks to take control of a cable channel from A+E Networks. On one level, it’s a jarring and seemingly illogical shift for companies that have prided themselves on being the opposite of traditional. The TV business is in turmoil, as networks fret over young audiences lost to cord-cutting and the fragmentation of viewing from having so much original content on so many cable channels.
benton.org/headlines/new-media-companies-shift-attention-tv | Wall Street Journal
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POLICYMAKERS

FCC CHAIRMAN TOM WHEELER ANNOUNCES STAFF CHANGES
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Federal Communications Commission Chairman Tom Wheeler announced the appointments of Jessica Almond and Edward “Smitty” Smith as legal advisors, and the departure of legal advisors Maria Kirby and Renee Gregory. As of October 26, 2015, Almond will serve as legal advisor for media, enforcement, and public safety issues, and Smith will be legal advisor for wireless telecommunications, engineering and technology, and consumer issues, as well as the broadcast incentive auction. Prior to rejoining the FCC, Almond worked as government affairs counsel at HTC America, Inc. Before that, she served as chief of staff in the FCC’s Wireless Telecommunications Bureau, special counsel in the office of Chairman Genachowski, and legal advisor in the FCC’s Media Bureau. She earned her law degree from George Washington University Law School and her bachelor’s from the State University of New York at Buffalo. Smith served as director of the District of Columbia Office of Victim Services and Justice Grants. Mr. Smith has also served as senior counsel and chief of staff for the FCC’s Incentive Auction Task Force, special counsel in the FCC’s Enforcement Bureau, special advisor at the National Telecommunications and Information Administration, and candidate for District of Columbia Attorney General. He earned his law degree from Harvard Law School and his bachelor’s from Brown University.
benton.org/headlines/fcc-chairman-tom-wheeler-announces-staff-changes | Federal Communications Commission
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STORIES FROM ABROAD

ACHIEVING A GLOBAL INFORMATION SOCIETY
[SOURCE: Public Knowledge: AUTHOR: Melanie Penagos]
2015 marks the end of two major United Nations processes that signify the beginning of a new era in international development, an age when Information and Communication Technologies (ICTs), such as the Internet and telecommunications, are considered vital to facilitate the Sustainable Development Goals (SDGs). The UN has recognized how important international development is by adopting the SDGs and initiating a ten-year review of the World Summit on the Information Society (WSIS+10).The WSIS+10 process will ultimately produce an outcome document with the potential to steer the course of ICTs for development. Stakeholders input will help preserve the WSIS vision of building a people-centric, inclusive, and development-oriented Information Society. The WSIS+10 review has acknowledged the importance of ICTs and critical obstacles to sustainable development, such as the digital divide, which has the potential to exacerbate social and economic inequalities. Connecting the Sustainable Development Goals with the WSIS+10 process will help the international community achieve its development goals. It’s still possible for organizations to engage in the WSIS review by submitting comments to the forthcoming zero-draft document or by organizing and participating in side events during the second interactive stakeholder consultation on October 19. Only involvement from a diverse range of stakeholders and communities can help us achieve a truly inclusive global Information Society.
benton.org/headlines/achieving-global-information-society-linking-uns-sustainable-development-goals-wsis10 | Public Knowledge
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APPLE NEWS IS BLOCKED IN CHINA
[SOURCE: CNNMoney, AUTHOR: Sophia Yan, Hope King]
Apple's new News app is unavailable in China. Whether Apple is blocking it or the News app has succumbed to the Chinese government's "Great Firewall" remains unclear. Apple won't say. So far, the app has officially launched only in the United States, and is being tested in the United Kingdom and Australia. But US iPhone owners have been able to use the News app in many places around the world, including Hong Kong -- yet they are prevented from accessing the app while in mainland China. Reporters in China and Hong Kong were able to download Apple News Oct 12, after switching their iPhone regions to the United States. When operating on a mobile network in Hong Kong, which is not subject to Beijing's censorship rules, the app functioned normally. But when connected in Beijing, an error message appeared when trying to open previously loaded stories. "Story Unavailable: News isn't supported in your current region," the message said.
benton.org/headlines/apple-news-blocked-china | CNNMoney
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FACEBOOK’S PRIVACY OFFENSIVE
[SOURCE: Wall Street Journal, AUTHOR: Sam Schechner]
Facebook is gearing up to fight a cascade of privacy investigations in Europe, arguing that regulators are overreaching in ways that could hurt the social network’s ability to protect users against hacking and fraud. Ahead of a court ruling due in Belgium, Facebook is attacking this case against it as an ill-thought-out attempt to regulate privacy that would instead remove one of the tools Facebook uses to stop automated programs from hacking into users’ accounts. The case, brought by Belgium’s Privacy Commission, is the most advanced of five coordinated Facebook investigations launched by regulators from Germany to Spain. If it loses the case, in which the regulator has requested fines of €250,000 ($284,000) a day, Facebook has threatened to make Belgian users endure more identity checks when logging into the website to guard against hacking.
benton.org/headlines/facebook-goes-privacy-offensive-europe | Wall Street Journal
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