Daily Digest 3/16/2018 (Something Strange Is Going On)

Benton Foundation

FCC Reform

Something Strange Is Going on With This FCC Reauthorization Bill, and It Isn’t Good

Recently, the House of Representatives approved H.R. 4986 -- a bill that, among other things, reauthorizes the Federal Communications Commission and approves the agency’s funding for fiscal years 2019 and 2020. House passage followed an announcement that the bipartisan leadership of the Senate Commerce Committee and the House Commerce Committee had reached an agreement to support the legislation -- framing the bill as reauthorizing the FCC and spurring deployment of 5G wireless networks across the nation. However, problems with the bill -- specifically in Sections 401 and 402 of Title IV -- are apparent upon closer inspection and warrant serious consideration and revision by the Senate Commerce Committee. As currently written, H.R. 4986 should not be granted unanimous consent in the Senate and should not be included in the fiscal 2018 omnibus spending bill that Congress must pass by March 23 in order to fund the government. Congress should fix the bill’s shortcomings, or strip them out, and permit the other meritorious and uncontroversial provisions to become law. Section 401 will likely diminish the FCC’s ability to address competition and consumer protection issues in the future. It also weakens congressional oversight of the FCC and agency conflicts of interest. These provisions were not even included in the high-level bullet points highlighted by the Senate Commerce and House Commerce leadership press release, and they should be stripped out of H.R. 4986 prior to consideration by the full Senate.


Will the US Invest in Next Generation Broadband?

[Commentary] The Senate Commerce Committee held three hearings this week on infrastructure. On March 14, the Communications, Technology, Innovation and the Internet Subcommittee looked at broadband deployment in a hearing titled “Rebuilding Infrastructure in America: Investing in Next Generation Broadband.” The hearing explored the most effective and efficient ways to address broadband deployment to close the digital divide, including reviewing President Donald Trump’s recent infrastructure proposal.  Besides continuing the debate over whether the proposal should contain specific-broadband funding, the hearing also examined the Federal Communications Commission’s collection of broadband data and the role of local and state regulators in the deployment of the next generation of wireless services, 5G.

How the Trump FCC Is Disconnecting the Poor

March 8, the Voices for Internet Freedom coalition hosted a briefing for members of Congress and their staff about the disastrous policies the Federal Communications Commission is moving forward that would make it harder for poor people to access vital communications services. The FCC’s War on the Poor briefing brought together affected communities, advocates and policy experts for a panel discussion about the FCC’s proposal to roll back the Lifeline program, the vote to undo Title II Net Neutrality, and the agency’s refusal to stand up to predatory prison-phone companies. All of these actions have a disproportionate impact on communities of color and people living below the poverty line. Speakers and panelists at the War on the Poor briefing called on members of Congress to:

  1. Voice their opposition to the plan to roll back Lifeline, and leave millions without affordable internet access.
  2. Support bipartisan legislation that would force the FCC to stand up for families being exploited by prison-phone companies’ predatory practices.
  3. Sign on to the congressional effort to overturn the FCC’s bad Net Neutrality vote and restore the Title II Net Neutrality protections.

RUS Community Connect Grant Program

The Rural Utilities Service (RUS), an agency of the United States Department of Agriculture (USDA), herein referred to as RUS or the Agency, announces its Community Connect Grant Program application window for Fiscal Year (FY) 2018. In addition, this NOSA announces the minimum and maximum Community Connect grant amounts, the funding priority, the application submission dates, the agency contact information, and the procedures for submission of paper and electronic applications. This notice is being issued prior to passage of a final appropriations act to allow potential applicants time to submit proposals and give the Agency time to process applications within the current fiscal year. The Agency will publish the amount of funding received in any continuing resolution or the final appropriations act on its website at https://www.rd.usda.gov/newsroom/ notices-solicitation-applications-nosas. Expenses incurred in developing applications will be at the applicant’s risk. Application deadline is May 14, 2018.

US, Tech Firms Warn Against ICANN’s Privacy Tightening

Internet Corporation for Assigned Names and Numbers (Icann), the global body that oversees internet domain names, is preparing a significant tightening of its privacy standards in response to new European Union policies. The US government and some major American tech businesses warn the move, which is expected to be adopted within the next couple of months, will threaten their ability to track down bad actors on the internet. Investigators have long used the online tracking information to determine where malevolent activity on the internet originates. The information, known as Whois data, is routinely collected by companies that run internet registries when people register a website. The data typically includes names, addresses and email contacts for people responsible for a site. It has been publicly available since the beginning of the internet. The expected change is a response by Icann, to a new European Union privacy rule, which takes effect May 25. The EU rule is aimed at protecting people’s online data from indiscriminate use. That includes Whois data. In response to the EU privacy rule, Icann has floated plans that would limit the public’s access to only the most basic information about a website, such as general location data. Icann’s plans also would set up a new system allowing access to more detailed data for people who are accredited—a group that potentially would include law enforcement, cybersecurity experts and business brand-protection investigators. But even many basic elements of the new accreditation system have yet to be determined. Meanwhile, the EU’s law will take effect on May 25, forcing the companies that register websites and collect the data to figure out what to do next. Failure to comply with the EU directive could expose them to large new fines, and many are feeling pressure to shut down access, internet experts say.

Verizon says FCC should adopt speed measurement methodology before CAF auction begins

Verizon says that as it mulls its involvement in the Federal Communications Commission’s upcoming $2 billion Connect America Fund auction this July, the regulator needs to provide more guidance on how it will determine whether a CAF-supported service meets speed requirements.  In an FCC filing, Verizon said that potential bidders need to know two main elements:  how the FCC will measure speed and whether the tested service is compliant, i.e., the statistical standards that the speed measurements will be required to meet. Additionally, Verizon said that the FCC “should adopt speed test standards that are consistent with the real-world performance of comparable services in urban areas.”

via Fierce

Cities to FCC: Stop Scapegoating Us on 5G Deployment

In a letter to the Federal Communications Commission Next Century Cities is pushing back on the FCC's efforts to exempt some wireless deployments from local historic or environmental reviews, saying they are being scapegoated unfairly as impediments to broadband deployment. Three dozen mayors and other elected officials signed the letter defending local decisionmaking in 5G small-cell deployments. "The Commission should be focused on encouraging investment in better networks," the officials wrote, "rather than limiting our local authority merely because the large internet companies find it inconvenient to pay their fair share in using the public rights-of-way. [Next Century Cities is a consortium of public officials committed to advancing next-generation broadband in their communities.]

AT&T’s FiberTower deal raises questions about the value of 5G spectrum

[Commentary] A large and growing group of voices, including those from legislators, journalists, FiberTower shareholders and trade associations, argues that AT&T’s purchase of FiberTower’s millimeter wave licenses is a sweetheart deal that undervalues that spectrum—spectrum those in the industry believe is critical to the rollout of 5G.  Most recently, Rep Anna Eshoo (D-CA), in a letter to the Federal Communications Commission, claimed that the agency signed off on AT&T’s FiberTower purchase without holding an open debate about the transaction. The Competitive Carriers Association, a trade group for small wireless operators, agreed, arguing that the transaction gives AT&T “a first-mover advantage in coveted 5G spectrum at the expense of American taxpayers.” Those complaints about AT&T’s purchase of FiberTower’s licenses extend to Verizon’s purchase of Straight Path’s millimeter wave spectrum licenses. Verizon agreed to pay $3.1 billion for Straight Path in 2017, and earlier this year Verizon and Straight Path paid a $600 million fine because Straight Path didn’t meet the FCC’s spectrum license buildout requirements. The full details of AT&T’s purchase of FiberTower have not yet been made public, and therefore AT&T’s final price tag for FiberTower’s licenses may change. Indeed, in her letter, Rep Eshoo estimated AT&T paid roughly $2 billion for the licenses, based on the price Verizon paid for Straight Path. But AT&T’s purchase of FiberTower may now face complications due to the ongoing debate in the bankruptcy court.

via Fierce

Mueller Subpoenas Trump Organization, Demanding Documents About Russia

Apparently, the special counsel, Robert S. Mueller III, has subpoenaed the Trump Organization to turn over documents, including some related to Russia. The order is the first known instance of the special counsel demanding records directly related to President Trump’s businesses, bringing the investigation closer to the president. The breadth of the subpoena was not clear, nor was it clear why Mueller issued it instead of simply asking for the documents from the company, an umbrella organization that oversees President Trump’s business ventures. In the subpoena, delivered in recent weeks, Mueller ordered the Trump Organization to hand over all records related to Russia and other topics he is investigating, apparently. The subpoena is the latest indication that the investigation, which President Trump’s lawyers once regularly assured him would be completed by now, will drag on for at least several more months. 


Trump administration hits Russian spies, trolls with sanctions over US election interference, cyberattacks

The Trump administration imposed fresh financial sanctions on Russian government hackers and spy agencies to punish Moscow for interfering in the 2016 presidential election, and for a cyberattack against Ukraine and other countries that officials have characterized as “the most destructive and costly” in history. Sanctions also were imposed on individuals known as “trolls” and the Russian organizations that supported their efforts to undermine the election. Additionally, the administration alerted the public that Russia is targeting the U.S. energy grid with computer malware that could sabotage the systems. Taken together, the moves represent the administration’s most significant actions to date against Russia for its aggression against the United States. They are intended to deter tampering with this year’s midterm elections while signaling to Russia that Washington will not allow its attacks to go unchallenged, officials said. The sanctions targeted many of the same Russian organizations and operatives identified by Robert S. Mueller III, the special counsel, in an indictment that outlined an audacious attempt to spread disinformation and propaganda to disrupt American democracy and, eventually, influence the vote on behalf of President Trump. The sanctions also responded to other cyberattacks, including a previously undisclosed attempt to penetrate the American energy grid.


US judge says AT&T-Time Warner merger trial may last 8 weeks

US District Judge Richard Leon said a trial to decide if AT&T’s $85 billion acquisition of Time Warner is legal under US antitrust law may last six to eight weeks, significantly longer than previously forecast. At a pre-trial hearing, Judge Leon said he will hear up to two days of motions before hearing opening arguments on March 21. Lawyers for the government and both companies did not comment on Leon’s estimate on the length of the trial; they had previously suggested it would last three weeks.

How the DOJ’s Face-Off With AT&T Could Alter American Business

The face-off, between the Justice Department and AT&T over the company’s $85 billion agreement to buy media giant Time Warner, has broad ramifications for media, technology and other industries as well as for the government’s powers to deter large-scale corporate consolidation. It could determine whether antitrust enforcers will have real practical authority to challenge so-called vertical mergers involving two complementary companies that operate at different levels of the same industry. Typically, the government challenges unions of direct competitors that sell similar products and services, or horizontal mergers. The ruling could affect major pending health-care mergers and may have ramifications for the tech economy. If the deal is allowed, AT&T argues, it could act as a bulwark against the power of digital media giants such as Google and Facebook. Or it could create an entertainment behemoth that holds consumers hostage, as the government insists. The outcome could also affect how strongly the Trump administration, with its rival populist and pro-business factions, pursues the kind of vigorous antitrust enforcement that was a hallmark of the Obama administration. The case is a pivotal moment in a recurring clash between merger mania and government enforcement, and the drama has produced two lead actors: AT&T boss Randall Stephenson and US antitrust chief Makan Delrahim.

Streaming Soon: A Fight Over AT&T, Time Warner, and the Future of TV

Would the combination of AT&T and Time Warner hurt consumers or help them? How the judge rules in the case has the potential to shape the fast-changing business of video, as consumers increasing turn to streaming services instead of traditional cable TV. AT&T, a nationwide satellite TV and wireless provider, argues that pairing up with a major content company is necessary to compete against the reach and resources of tech giants like Netflix and Amazon. But the Justice Department says the deal would hurt upstart streaming services and lead to higher prices for consumers.The decision will frame the competition among Silicon Valley, Hollywood and Madison Avenue, while also establishing what kinds of corporate mergers — in the media industry and beyond — will be permitted in the years to come. “This court case is so important it is hard to know where to start,” said Amy Yong, a research analyst at the investment firm Macquarie. “This case is at the heart of what we do in our everyday lives.”

Digital Economy

Initial Estimates Show Digital Economy Accounted for 6.5 Percent of GDP in 2016

The Bureau of Economic Analysis released, for the first time, preliminary statistics and an accompanying report exploring the size and growth of the digital economy. Goods and services that are primarily digital accounted for 6.5 percent of the US economy, or $1.2 trillion, in 2016, after a decade of growing faster than the US economy overall, BEA’s research shows. From 2006 to 2016, the digital economy grew at an average annual rate of 5.6 percent, outpacing overall U.S. economic growth of 1.5 percent per year. In 2016, the digital economy supported 5.9 million jobs, or 3.9 percent of total U.S. employment. Digital economy employees earned $114,275 in average annual compensation compared with $66,498 per worker for the total U.S. economy.

The battle for digital supremacy

“Desigend by Apple in California. Assembled in China”. For the past decade the words embossed on the back of iPhones have served as shorthand for the technological bargain between the world’s two biggest economies: America supplies the brains and China the brawn. Not any more. China’s world-class tech giants, Alibaba and Tencent, have market values of around $500 billion, rivalling Facebook’s. China has the largest online-payments market. Its equipment is being exported across the world. It has the fastest supercomputer. It is building the world’s most lavish quantum-computing research centre. Its forthcoming satellite-navigation system will compete with America’s GPS by 2020. America is rattled. An investigation is under way that is expected to conclude that China’s theft of intellectual property has cost American companies around $1trillion; stinging tariffs may follow. Earlier in 2018 Congress introduced a bill to stop the government doing business with two Chinese telecoms firms, Huawei and ZTE. Eric Schmidt, the former chairman of Alphabet, Google’s parent, has warned that China will overtake America in artificial intelligence (AI) by 2025.

Company News

IHeartMedia, US’s Largest Radio Broadcaster, Files for Bankruptcy

IHeartRadio’s parent company, iHeartMedia, filed for bankruptcy protection in an attempt to restructure part of the $20 billion debt load that has burdened it since a leveraged buyout a decade ago, on the eve of the 2008 recession. The company announced that it had reached agreements with creditors to reduce its debt by more than $10 billion. It said it would continue to operate its stations during the process. According to court filings, iHeartMedia, known as Clear Channel Communications until 2014, paid $1.4 billion in 2017 in interest on its debts. Its media division, which includes the broadcast stations, a popular music app and a unit that syndicates shows by Rush Limbaugh, Sean Hannity and others, had $3.6 billion in revenue and $735 million in operating income. Counting its global business in outdoor billboards, which is not part of the bankruptcy, the company had $6.2 billion in revenue over all. The bankruptcy is the culmination of iHeartMedia’s yearslong dance with its creditors; a final phase, long expected by analysts, began in Feb when the company skipped a $106 million interest payment. It is also the latest and most high-profile shift in the tumultuous radio business, which has struggled to retain advertising dollars and compete with streaming services like Spotify and Pandora.


Here’s who could become one of Trump’s top science and tech advisers

More than a year after entering the White House, President Donald Trump still has not selected his top science and technology adviser, leaving unfilled a critical policy post that guides the administration on issues as varied as artificial intelligence,  climate change and cancer research. While the White House maintains that it is unconstrained in its work — and has staffed up to tackle such challenges as closing the country’s Internet-access gaps — the vacancy still troubles policy experts, who believe that President Trump would be best served by someone who could double as an emissary to the academic and engineering worlds. Technically, the White House has two major science and technology posts. The first is the director of the Office of Science and Technology Policy, which has a broad remit that includes coordinating the country’s vast federal research budget. The second is the assistant to the president on science and technology, a title that is supposed to afford its bearer access to the person occupying the Oval Office. Often, those roles are held by the same person, and under Obama, the responsibilities fell to John Holdren for eight years. Since Holdren's departure, the posts have remained vacant. But President Trump's aides have actively sought new leadership for months. One of the candidates under consideration is Kelvin Droegemeier, an expert in extreme weather and meteorology from the University of Oklahoma, apparently. 

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Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Robbie McBeath (rmcbeath AT benton DOT org) -- we welcome your comments.

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