November 2015

Enforcement Fines: The Collection Process

The Enforcement Bureau has four guiding mandates: protect consumers, safeguard competition, secure communications networks, and police the integrity of Commission funds, programs and services. To better protect the public and strengthen accountability, the Bureau has made it a priority to streamline its processes, reduce its backlogs and provide more transparency into its enforcement activities. Recently, some questions were raised about the rate at which enforcement fines are collected, so we thought it would be helpful to offer a primer on the enforcement process.

Iranian Hackers Attack State Dept via Social Media Accounts

Four months after a historic accord with Tehran to limit its atomic ambitions, American officials and private security groups say they see a surge in sophisticated computer espionage by Iran, culminating in a series of cyberattacks against State Department officials over the past month. The surge has led American officials to a stark conclusion: For Iran, cyberespionage -- with the power it gives the Iranians to jab at the United States and its neighbors without provoking a military response -- is becoming a tool to seek the kind of influence that some hard-liners in Iran may have hoped its nuclear program would eventually provide.

While American officials doubt cyber skills, or even the most advanced cyber weapons, will ever have that kind of power, Iran’s cyber focus these days is notable. Over the past month, Iranian hackers identified individual State Department officials who focus on Iran and the Middle East, and broke into their e-mail and social media accounts, according to diplomatic and law enforcement officials familiar with the investigation. The State Department became aware of the compromises only after Facebook told the victims that state-sponsored hackers had compromised their accounts.

AT&T, Verizon try to prevent ban on text message blocking

AT&T, Verizon, and other wireless carriers are urging the Federal Communications Commission to reject a petition that would impose common carrier regulations on text messaging. "Prior express written consent" needed for calls and SMS to cell phones. The FCC in 2015 reclassified both fixed and mobile Internet access as common carrier services under Title II of the Communications Act and used the new classification to impose net neutrality rules that prevent Internet providers from blocking or throttling traffic. Wireless carriers already faced Title II common carrier regulation of mobile voice, but the status of text messaging has remained unsettled, along with the question of whether carriers can block text messages.

In August, the FCC was asked by Twilio to declare that text message service must face Title II regulation, raising concerns among mobile carriers. AT&T and Verizon urged the FCC to reject Twilio's petition, and so did CTIA—The Wireless Association, which represents carriers in general. CTIA wrote in a filing that new restrictions could prevent wireless operators from blocking spam. "Twilio frames its Petition as an effort to curb what it calls the 'blocking' and 'throttling' of messaging traffic but in fact, Twilio is asking the Commission to invalidate consumer-protection measures that prevent massive quantities of unlawful and unwanted mobile messaging spam from reaching and harming consumers," CTIA wrote. AT&T and Verizon made similar arguments in their own filings. Sprint and T-Mobile did not write in themselves, but are represented by the CTIA.

T-Mobile’s gutsy Thanksgiving deal to gain customers is spooking investors

T-Mobile is trying to sweeten the holidays for customers on rival networks, offering Sprint users $200 to switch. That's a per-line offering. And it's not limited to post-paid subscribers, either, which means that folks on prepaid plans and even Sprint's subsidiaries -- Boost and Virgin Mobile -- are eligible for the credit. The latest announcement comes days after T-Mobile said it was giving out three months of free, unlimited data to many of its own customers. The company added that the Sprint deal would be followed by others aimed at AT&T and Verizon. If the gamble works, T-Mobile could finish the year by adding even more new subscribers. But as T-Mobile rolled out the Sprint promotion, its stock fell by more than 2.5 percent.

Why is this happening? Analysts say that T-Mobile's decision to offer switchers deep discounts will add to the company's costs at the same time that it needs to maintain its momentum. Investors have long been worried that T-Mobile's strategy is unsustainable in the long run, and they're looking very closely at how much the company makes on each customer. By offering $200 to every Sprint user, T-Mobile will be raising its customer acquisition costs, cutting into those all-important per-customer margins. But it could prove attractive to many consumers.

NAB: Chairman Wheeler Shows Shocking Disregard for Congress

The National Association of Broadcasters was not happy with Federal Communications Commission Chairman Tom Wheeler's continued support for eliminating the broadcast exclusivity and network nonduplication rules, particularly in the face of concerns by congressional Democrats and Republicans. "Chairman Wheeler’s dismissive rejection of the concerns raised by key congressional leaders over his proposal to eliminate broadcast exclusivity rules represents a shocking disregard for the institution that confirmed him," said NAB spokesman Dennis Wharton. "Exclusive programming rights allow TV stations to serve communities with quality news and entertainment. Unfortunately, [lawmaker] concerns have been ignored by an FCC Chairman who appears to be on a lone crusade against exclusivity."

FCC Votes to Harmonize Pole-Attachment Rates

The Federal Communications Commission has agreed to a cable operator/telecommunication joint petition to modify the cost-allocation model for pole attachments to ensure that the reclassification of Internet service providers as telecommunication does not result in higher attachment fees for cable ops. In the process, it effectively lowered the rate for telecoms, so both sides were celebrating.

The FCC has for several years been taking steps to lower those costs and speed approvals to encourage broadband buildouts, which is one of the FCC's prime directives. The National Cable & Telecommunications Association (NCTA) and COMPTEL sought clarification of the rates and proposed an approach to regularize them, which the FCC accepted and will employ. It essentially brings the telecom rate down to approximately that of the cable rate, or about 7.4% of the annual cost of a pole. Not surprisingly, utility companies were not clamoring to be paid a lower rate.

Judge Grants BMG Judgment in DMCA Suit Against Cox

In a decision that could have implications for other Internet service providers, a US District judge has granted in part and denied in part music rights company BMG's request for summary judgment in its suit against Cox alleging it was not sufficiently responsive to BMG's requests that it terminate the accounts of subscribers who repeatedly infringed its copyrights. ISPs have to respond to such requests to retain DMCA protection from copyright infringement claims themselves. BMG says Cox has not done that since its subs do not face a realistic threat of losing their accounts even for repeat infringements. Cox was unavailable for comment, but in its response to the court after the suit was filed, Cox countered that it vigorously enforces its infringer policy, takes a "graduated" approach to allegations, and that BMG (and Round Hill) mischaracterized that policy and might not have rights to the content they were asserting. Cox says that Rightscorp., which, acting for BMG and Round Hill, monitored and identified the infringement, was a shady operation that, with BMG and Round Hill's complicity, was exacting retribution through the suit for Cox's refusal to participate in a scheme to "shake down ISP customers for money without regard to actual liability," and trying to get ISPs to participate in that scheme.

The judge in a two-page summary of his upcoming decision denied Cox's motion, and upheld BMG's request for partial summary judgment, though it denied that of Round Hill's, saying it did not have exclusive rights to the copyrights at issue.

Comcast-Backed Firm Acquires Vyve Towers

CTI Towers, a wireless tower operating company majority owned by Comcast Ventures, has struck a deal to acquire 120 towers from Vyve Broadband, the independent cable MSO formerly known as BCI Broadband and founded by two former Bresnan Communications executives. CTI Towers said the deal, its largest tower acquisition agreement so far, expands its coverage into Oklahoma, Kansas, Arkansas, and Wyoming. Tenants of those towers include Verizon Wireless, AT&T, T-Mobile and Sprint, as well as broadcasters, utility companies and government entities.

Chinese, others hack interior data 19 times

Foreign intelligence agents and other hackers attacked Interior Department networks 19 times in recent years, before walking away from keyboards with unknown amounts of stolen data, according to agency inspectors. The incidents are unrelated to a previously disclosed assault on Interior networks connected to Office of Personnel Management systems, the agency says. That high-profile campaign seized from the US government 21.5 million confidential records on national security personnel and their family members. In the 19 previously undisclosed cybersecurity incidents, Chinese attackers and hackers with European network addresses copied data strictly from Interior systems.

The extent of the intrusions into Interior networks was revealed in a little-noticed Nov. 9 memo from Deputy Inspector General Mary Kendall to Interior Secretary Sally Jewell. The memo was publicly released Nov. 17. Interior handles a significant amount of valuable data, such as oil leases, which are of particular interest to China and Russia, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies, who studies foreign relations in cyberspace.

Beyond Distrust: How Americans View Their Government

A year ahead of the presidential election, the American public is deeply cynical about government, politics and the nation’s elected leaders in a way that has become quite familiar. Currently, just 19 percent say they can trust the government always or most of the time, among the lowest levels in the past half-century. Only 20 percent would describe government programs as being well-run. And elected officials are held in such low regard that 55 percent of the public says “ordinary Americans” would do a better job of solving national problems. Yet at the same time, most Americans have a lengthy to-do list for this object of their frustration: Majorities want the federal government to have a major role in addressing issues ranging from terrorism and disaster response to education and the environment. And most Americans like the way the federal government handles many of these same issues, though they are broadly critical of its handling of others – especially poverty and immigration.

A new national survey by Pew Research Center, based on more than 6,000 interviews conducted between August 27 and October 4, 2015, finds that public attitudes about government and politics defy easy categorization. The study builds upon previous reports about the government’s role and performance in 2010 and 1998. The partisan divide over the size and scope of government remains as wide as ever: Support for smaller government endures as a Republican touchstone. Fully 80 percent of Republicans and Republican-leaning independents say they prefer a smaller government with fewer services, compared with just 31 percent of Democrats and Democratic leaners.

Benton

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