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  2. April 2016

April 2016

House GOP wants to cap Internet subsidy budget

House Commerce Committee Republican Reps are vowing to take up a bill that would set a budget cap on a program aimed at offering phone and Internet subsidies to the poor. They made the announcement shortly after the Federal Communications Commission (FCC) voted to overhaul and expand the program known as Lifeline in a dramatic meeting March 31. As it stands, the FCC proposal includes a $2.25 billion “budget mechanism.” If spending nears that level, the FCC will have to decide whether to increase the funding. But without a cap, Republican Reps said, that total could easily be exceeded even if the agency does nothing. The GOP bill sponsored by Rep Austin Scott (R-GA) would cap the program at $1.5 billion. It is sure to receive strong pushback from Democratic Reps, however, and has no real chance of enactment under President Barack Obama.

In fact, House Democratic Reps helped convince FCC Commissioner Mignon Clyburn to break her deal with FCC Republican Commissioners a day earlier. A group of nine House Democrats on the Energy and Commerce Committee sent the FCC a late letter to “express concern” about a cap. “Demand is expected to increase as the program transitions to include broadband service, and any cap would threaten the goals and purpose of Lifeline,” they warned. “We strongly support the commission’s effort to modernize and expand Lifeline, but by establishing an artificial cap on funding from the outset, many low-income consumers could find themselves without any mechanism to bridge the digital divide,” according to the letter.

What are next steps for Congress on net neutrality?

[Commentary] Indications are that Congress is likely to take up network neutrality once the court rules on whether the Federal Communications Commission overstepped in its 2015 Open Internet Order. The intent at least on the Senate side is to have strong net neutrality provisions. The House seems less likely to take that position. Are there ways to have our cake and eat it too? Can we have dynamic industries and regulation? Yes, as long as the regulatory framework is consistent with a constantly improving tech ecosystem of networks, edge providers, customers, and others yet to be named. Congress has at least three options that would promote a robust and open Internet, allow innovation to flourish, and protect vulnerable customers and fledgling edge providers. These approaches apply to interconnection between Internet Service Providers (ISPs) and between ISPs and edge providers.

First best: A multistakeholder process -- The preferred option is to direct the FCC to engage in a multistakeholder process to establish how ISPs and edge providers interact. The leading thinker on this approach is TechPolicyDaily.com’s own Roslyn Layton. According to her research, of the 50 countries that have adopted net neutrality policies, those which avoid regulatory rules and instead embrace a multistakeholder approach have more edge provider innovation on average than do the other nations.

Second best: Adopt rules provided there is actual evidence of monopoly -- The next best option is for Congress to authorize the FCC to adopt net neutrality rules, but only upon showing that the ISP or edge provider in question possesses and is abusing a monopoly position. There are two key provisions to this approach, and a caveat.

Third best: Rules adopted and enforced unless there is evidence they are not needed -- If Congress is concerned that net neutrality rules are needed now, it can adopt what I consider a third-best option, namely authorizing the FCC to adopt net neutrality rules, but with a requirement that the FCC forebear from enforcing rules where a regulatory impact analysis – styled after the requirements just described – shows that monopoly is absent or that monopoly power is not being exercised even if it exists.

[Mark Jamison is the Gunter Professor of the Public Utility Research Center at the University of Florida]

ACA's Gessner Warns of Unregulated Edge Gatekeepers

American Cable Association Chairman Bob Gessner warns of a time when unregulated edge provider gatekeepers withhold their contents as a negotiating tactic, but signaled that time is already here.

Gessner, president of MCTV, which has has about 47,000 customers in Massilon (OH), said that if he had a "grave concern" about the Internet, it was that the Federal Communications Commission's Open Internet order, which prevents Internet service providers (ISPs) from blocking or throttling or paid prioritization, does not address the entire network. Recently, FCC Chairman Tom Wheeler reiterated that recent revelations about Netflix slowing traffic were not a net neutrality issue because the rules don't apply to content providers like Netflix. "I think many consumers have fooled into thinking that network neutrality applies to the entire network, and it does not," said Chairman Wheeler. Gessner conceded that, as an ISP, he was one of the gatekeepers of the Internet, but said that at the other end of the net there is another gate, the one that lets content onto the Internet. He said that was controlled by the so-called virtuous edge providers like Netflix, Google, Viacom and CBS. He said ISPs' gate is regulated, while an edge provider is totally unregulated and free to block, throttle and redirect. "It is definitely a tilted playing field and my concern is that edge providers are about to 'Cable-ize' the Internet," he said, a "time when edge providers come to the ISP and demand payment otherwise their content won't be available. And that has already happened. It has happened for cash and it has happened as leverage in negotiations."

Biggest Political Ad Year Just Got Bigger

New data from Borrell Associates predicts political ad spending in 2016 will be $357 million (or 3%) greater than it predicted earlier, increasing to $11.7 billion. It says that when the candidate with the most delegates (Donald Trump) has spent the least on advertising and gets twice as much earned media as all of his opponents combined, there’s something unusual at play.

US, Canada issue joint alert on 'ransomware' after hospital attacks

The United States and Canada issued a rare joint cyber alert, warning against a recent surge in extortion attacks that infect computers with viruses known as "ransomware," which encrypt data and demand payments for it to be unlocked. The warning follows reports from several private security firms that they expect the crisis to worsen, because hackers are getting more sophisticated and few businesses have adopted proper security measures to thwart such attacks. "Infections can be devastating to an individual or organization, and recovery can be a difficult process that may require the services of a reputable data recovery specialist," the two governments said in the alert, distributed by the US Department of Homeland Security and the Canadian Cyber Incident Response Centre. It comes in the wake of reports of a string of ransomware attacks on individuals, businesses and government agencies in the past few months, including some that interrupted services at US hospitals and police departments.

Recently, the Federal Bureau of Investigation issued a private alert to US businesses, seeking their help in its investigation into the attacks. March 30's alert said the consequences of ransomware attacks include loss of sensitive or proprietary information, disruption of regular operations, expenses to restore access to computer systems and harm to a victim's reputation. The governments discouraged victims from paying hackers to restore access to their data.

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