Daily Digest 6/14/2018 (After AT&T, Then Came Comcast)

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House Subcommittee on Communications and Technology Advances Bills

The House Subcommittee on Communications and Technology, chaired by Rep. Marsha Blackburn (R-TN), advanced bills to the full committee that improve the nation’s broadband infrastructure and strengthen public safety communications.

H.R. 2345, the National Suicide Hotline Improvement Act of 2017, authored by Rep. Chris Stewart (R-UT) and Rep. Eddie Bernice Johnson (D-TX), to direct the Federal Communications Commission (FCC), in consultation with the Substance Abuse and Mental Health Services Administration, to study and report on the feasibility of designating an N11 dialing code to be used for a national suicide prevention and mental health crisis hotline system.

H.R. 5709, Preventing Illegal Radio Abuse Through Enforcement (PIRATE) Act, authored by Rep. Leonard Lance (R-NJ) and Rep. Paul Tonko (D-NY), to increase fines for illegal pirate operations from $10,000 per violation to $100,000 per day per violation, up to a maximum of $2,000,000, and streamline the FCC’s enforcement process and empower state and local law enforcement in combating illegal pirate operations.

H.R. 3994, the Advancing Critical Connectivity Expands Service, Small Business Resources, Opportunities, Access, and Data Based on Assessed Need and Demand (ACCESS BROADBAND) Act, authored by Rep. Tonko and Rep. Lance, to establish an Office of Internet Connectivity and Growth at the National Telecommunications and Information Administration (NTIA) to coordinate and track federal funding for broadband across all agencies. 

H.R. 4881, Precision Agriculture Connectivity Act of 2018, authored by Rep. Bob Latta (R-OH) and Rep. Dave Loebsack (D-IA), to require the FCC and the U.S. Department of Agriculture to form a task force to evaluate the best ways to meet the broadband needs of precision agriculture.

Democrats Use PIRATE Act Markup to Slam Net Neutrality Rule Rollback

Democratic Reps used a House Communications Subcommittee markup of a pirate radio bill to express their opposition to the Federal Communications Commission's rollback of network neutrality rules. Subcommittee Ranking Member Mike Doyle (D-PA) introduced an amendment to the Preventing Illegal Radio Abuse Through Enforcement (PIRATE) Act (HR 5709) that would have replaced the base bill with one that would restore the net neutrality rules just jettisoned. He also put in a plug for supporting his Congressional Review Act (CRA) resolution that would nullify the rollback and restore the rules. Several Democratic Reps then weighed in with their criticisms of the FCC rule rollback, including full committee Ranking Member Frank Pallone (D-NJ), as well as their support for the amendment and the CRA. Ranking Member Doyle then immediately withdrew the amendment. After the various proposed amendments were withdrawn, the PIRATE Act was approved unanimously by voice vote. 

SMART IoT Act Heads to Commerce Committee for Consideration

The Subcommittee on Digital Commerce and Consumer Protection, chaired by Rep. Bob Latta (R-OH), advanced by voice vote H.R. 6032, the SMART IoT Act, to the full committee for consideration. The SMART IoT Act, authored by Subcommittee Chairman Latta and Rep. Peter Welch (D-VT), will direct the Secretary of Commerce to conduct a study on the state of the internet-connected devices industry.

California’s Net Neutrality Bill Has Strong Zero Rating Protections for Low-Income Internet Users, Yet Sacramento May Ditch Them to Appease AT&T

California’s network neutrality bill, SB 822, is often referred to as the “gold standard” of state-based net neutrality laws. The bill tackles the full array of issues the Federal Communications Commission had addressed right up until the end of 2016 before it began repealing net neutrality. One such issue is the discriminatory use of zero rating, where Internet service providers could choose to give users access to certain content for “free”—that is, without digging into their data plans. ISPs can use zero rating to drive users to their own content and services to the detriment of competitors. California’s legislature has so far opted to ban discriminatory users of zero rating and prevent the major wireless players from picking winners and losers online. But new and increased resistance by the ISP lobby (led by AT&T and their representative organization CALinnovates) unfortunately has legislators contemplating whether discriminatory zero rating practices should remain lawful despite their harms for low-income Internet users. In fact, AT&T and their representatives are even going so far as to argue that their discriminatory self-dealing practices that violate net neutrality are actually good for low income Internet users.

USTelecom's Spalter: Internet Freedom Has Been Restored... Now What?

In a speech to the Media Institute, USTelecom President Jonathan Spalter said it is time to establish "consistent safeguards" across the entire internet. The key to those consistent safeguards, he suggested, were their broad application, echoing the growing chorus of internet service providers and legislators from both parties that believe mammoth edge players like Facebook and others need minding. "[T]he reality today is the companies making headlines for privacy missteps or blocking content aren’t the ISPs," Spalter said. "Just witness the back-and-forth between Google and Amazon blocking the sale of each other’s products and services on their respective platforms. This was a fatal flaw of Title II: It is no longer acceptable to write rules either here in Washington or in any state that omit the most powerful and valuable — at least in terms of market cap — players of the digital age. We all have a stake in getting modern rules right because if we don’t, then others will continue to fill the void."

With net neutrality gone and mergers galore, it's a new internet

The dissolution of net neutrality regulations and the AT&T/Time Warner decision could shape the internet for years to come. 

Worst case: In this scenario, the giant companies that supply your internet access (AT&T, Verizon, Comcast, et al.) try to outflank the giant companies that provide most of your online content and services (Google, Facebook, Apple et al.) — and consumers lose out. Service providers could leverage their access to user data to target ads more efficiently, favor content and services they own over competitors, and then raise prices on customers who don’t have alternative options. Startups have a harder time breaking in, users have a harder time switching services, and everyone ends up spending more money. With the Federal Communications Commission's net neutrality rules gone, the Federal Trade Commission can intervene to address some anticompetitive behavior. But progressives and net neutrality activists worry it isn't equipped to effectively police the new internet dynamics.

Bottom Line: Most agree that the ruling in AT&T's favor will lead to new experiments with vertical integration by content providers and internet-delivery networks. While that's in part necessary for media companies to evolve and survive in an all-digital world, it likely will re-shape consumers' internet experience in the process.

via Axios

Comcast disabled throttling system, proving data cap is just a money grab

Comcast has disabled a throttling system that it deployed in 2008 in order to slow down heavy Internet users. Comcast's network is now strong enough that a congestion management system isn't needed, the company says. The system has been "essentially inactive for more than a year," and is now disabled entirely. Yet the nation's largest cable operator still imposes data caps and overage fees in 27 states, claiming that it limits the amount of data customers use each month "based on a principle of fairness." Comcast initially deployed its congestion management system after it was caught throttling BitTorrent traffic over a decade ago. The system deployed in 2008 was application-agnostic. Instead of targeting specific online services, Comcast used the system to slow down heavy Internet users regardless of which applications they were using. 

Rep Cramer and Sen Daines Introduce Reprioritizing Unserved Rural Areas and Locations for Broadband Act

Rep Kevin Cramer (R-ND) introduced the Reprioritizing Unserved Rural Areas and Locations (RURAL) for Broadband Act. The RURAL Broadband Act ensures government resources are being used as efficiently as possible while developing broadband networks in rural areas. The bill prioritizes the Rural Utility Service (RUS) funds to unserved areas over underserved areas which are already receiving some Universal Service Fund (USF) resources. Senator Steve Daines (R-MT) introduced identical language as a bill in the Senate, S. 2970.  


Comcast, in 2nd Try, Offers $65 Billion Cash for 21st Century Fox

Comcast announced an offer worth $65 billion for the bulk of 21st Century Fox’s businesses, setting up a showdown with the Walt Disney Company for Rupert Murdoch’s media empire. The all-cash bid by Comcast, the largest cable company in the United States, came a day after a federal judge approved a merger between AT&T and Time Warner. Comcast executives had awaited the decision in that case before mounting their bid for 21st Century Fox. In December, Disney struck a $52.4 billion, all-stock deal for Fox’s assets. Comcast, whose roughly $60 billion offer for the Fox assets was rebuffed in 2017, is now including contractual assurances such as a reverse breakup fee — worth about $2.5 billion — in the event a transaction is blocked by the government. Comcast’s new offer is about 19 percent higher than Disney’s proposal, according to its statement. Murdoch and his company’s board had rejected Comcast’s earlier offer partly on concerns the government would block the deal. But the AT&T-Time Warner decision also allayed many concerns that a Comcast takeover of 21st Century Fox’s businesses would be denied by regulators.

What's the government's next move in the AT&T case

Judge Richard Leon issued a stinging rebuke to the Justice Department's attempt to block AT&T's $85 billion bid to acquire Time Warner. But that doesn't mean the case is over. The Justice Department can appeal the ruling, and the department's antitrust chief, Makan Delrahim, is considering that option.  "I think the constitution and the statues allow for due process for all litigants and we will take a look at what the next steps are," Delrahim said. The Justice Department could seek a stay of his decision, essentially freezing the combination of the two companies while the case works its way through the appeals process. But the Justice Department would have to go through Judge Leon first, and at the June 12 hearing, he used unusually strong language to discourage the department from asking him for an injunction. He said such a request would be "manifestly unjust" because it would have the effect of killing the acquisition, since AT&T and Time Warner's agreement expires on June 21. "I hope and trust that the government will have the good judgment, the wisdom, and the courage to avoid such a manifest injustice," he said in court. "To do otherwise, I fear, would undermine the faith in our system of justice of not only the defendants but their millions of shareholders and the business community at large." The government's attorneys could go to the D.C. Circuit Court of Appeals to request an injunction. Another option for the government is to skip a stay, and just appeal the case. But AT&T and Time Warner have said they will begin to merge the companies as soon as possible. A ruling from an appeals court would arrive after the deal is completed, making it difficult to untangle the newly merged company. "The reason you'd get a stay is because the process of an appeals process can takes six months to a year," said Jeffrey Blumenfeld, a former senior Justice Department antitrust attorney who is now a partner at the law firm Lowenstein Sandler. "The risk in a merger situation is once the companies combine operations it can be difficult to take the company apart again, though it has been done."

via CNN

In AT&T-Time Warner, the Government Went After the Wrong Merger

[Commentary] The government's insistence on bringing such a weak lawsuit [AT&T/Time Warner] does not bode well for the immediate future of antitrust. There are going to be plenty of mergers over the next few years that will have far more serious consequences than the AT&T-Time Warner deal. Having been slapped down in this lawsuit, the Justice Department is unlikely to be willing to go after those worthier targets, even when they raise important issues of innovation and consumer choice. I've previously argued that we need an evolving theory of antitrust that can deal with the dominance of the big tech companies. But this requires the government to be able and willing to bring aggressive suits, and to make innovative arguments. If that doesn't happen, Big Tech is going to become so powerful it will snuff out any company that even thinks about trying to compete. That's not good for the tech industry, and more important, it's not good for the country. I had hoped that [DOJ antitrust chief Mark] Delrahim, as a longtime antitrust expert, would be the person to lead such a charge. But that hope is now lost. In the short term, the government's willingness to bring this dumb case means that AT&T and Time Warner's merger was delayed a bit, but the combined company can soon start competing with the likes of Netflix and Amazon. In the long term, it means that antitrust enforcement has been significantly weakened. That's the true tragedy of the government's suit.

[Joe Nocera is a Bloomberg Opinion columnist covering business.]

The blueprint for the disastrous AT&T-Time Warner deal was written years ago by the Comcast-NBC merger

[Commentary] The AT&T/Time Waner deal is not unique. Its template was laid out in 2011 by what was then the biggest such “vertical” merger in the information and entertainment sectors: Comcast’s $30-billion takeover of NBCUniversal.  That earlier deal united a big Internet service provider with a big purveyor of content. It was pitched as bringing huge benefits to the public — improved cable TV and internet technology, more innovative TV programming, lower prices. Have you seen any of that since 2011? Me neither. The FCC thought it could keep Comcast on the straight and narrow by imposing more than a dozen conditions on its merger in 2011. It was wrong. Instead it was forced into countless battles with the ever-more-powerful company, and lots of litigation. Thanks to Judge Leon, the AT&T-Time Warner merger will be completed without any such conditions. The smart money says that further mergers along the same lines will shortly be proposed, with Verizon, Comcast, Walt Disney, and 21st Century Fox among the future brides and grooms. Open season on consumers’ pocketbooks, and on their access to the content they wish to watch, starts now.

Game Over

AT&T emerged victorious from its courtroom battle with the Department of Justice. What this means for the future of TV:

  1. The Big 4 Are Omnipresent If Not Yet Omnipotent: The real heavyweights in the global video market are not Dish Networks, Comcast, or any of the other legacy pay-TV providers. Instead, AT&T’s real competitors going forward are Apple, Amazon, Alphabet (Google) and Facebook, along with Netflix and (to a lesser extent) Microsoft. These companies all have deep pockets, access to over a billion users (and the associated data), and a demonstrated commitment to create and deliver direct-to-consumer original video content on a worldwide basis without the need for a pay-TV provider whatsoever. 
  2. The Dumb Pipe Era is Over: For the large players at least, the era of the “Justas” (as in ‘Just a pay-TV provider’ or ‘Just a broadband provider’) is rapidly coming to an end.

Apparently, FCC Plans Rule Change Before Court Can Upend Sinclair Bid

Federal Communications Commission Chairman Ajit Pai is said to be planning a vote in July on limits to how many TV stations a company can own, rules he has said are too restrictive and that could factor into Sinclair Broadcast Group’s planned purchase of Tribune Media Co. Apparently, Chairman Pai is poised to schedule a July 12 vote on altering rules that cap broadcasters’ reach at 39 percent of the national audience. A vote in July could head off a decision by the US Court of Appeals for the DC Circuit in Washington that is considering a challenge to part of the existing rules. The case threatens to push Sinclair over the existing national ownership cap if it buys Tribune. Proposals from Chairman Pai, an appointee of President Donald Trump, are all but certain to pass with votes from the Republican majority he leads. Chairman Pai hasn’t publicly recommended a new limit and details of his proposal could not be learned.

Some Major TV Groups Push FCC for Right To Keep, Transfer UHF Discount

Ion, Univision and Trinity Broadcasting say the Federal Communications Commission should not only grandfather their TV station holdings' discounted audience reach if the FCC adjusts the UHF discount or 39% audience reach cap, but should also allow them to transfer that grandfathered status to a new owner. That came in comments on the FCC's inquiry into whether that 39% cap needs to be raised or scrapped (or conceivably lowered, though that is highly unlikely). All three have station groups that would exceed the 39% cap on a group's national audience without the UHF discount that allows them to count only half of a UHF station's audience toward the cap. They say full and transferable grandfathering should be the policy regardless of what the FCC does to the cap or the discount. Among the possible outcomes are eliminating the discount, but raising the cap to, say, 50%. The commenters point out that their groups were built in reliance on the discount and serve important populations--minorities, the elderly--so there is a public interest in not breaking them up. They also point out that they have used the scale the discount allowed them to build to launch multicast nets serving various populations, a public service scale that should be transferable to a new owner so they could carry on that public service mission.

Armstrong Williams got ‘sweetheart’ deal from Sinclair

Conservative commentator Armstrong Williams, the longtime confidant of Trump Cabinet member Ben Carson, is set to get what he called “a good deal” — three local television stations from Sinclair Broadcasting Group for just a fraction of the market price. Williams is acquiring the three stations — in Seattle (WA), Salt Lake City (UT) and Oklahoma City (OK) — for $4.95 million. That’s some $45 million to $55 million less than what Justin Nielson, a senior research analyst who tracks the broadcast sector for the data and research firm Kagan, said he would have expected. And while Sinclair is shedding stations in hopes of improving its chances of obtaining approval for its mega-purchase of Tribune Media, the company’s recent moves to offer favorable deals to friendly buyers is raising further questions about how much control Sinclair is truly planning to cede, and whether the company is trying to skirt federal rules.


Apple to Close iPhone Security Hole That Police Use to Crack Devices

Apple has long positioned the iPhone as a secure device that only its owner can open. That has led to battles with law enforcement officials who want to get information off them, including a well-publicized showdown with the FBI in 2016 after Apple refused to help open the locked iPhone of a mass killer. The FBI eventually paid a third party to get into the phone, circumventing the need for Apple’s help. Since then, law enforcement agencies across the country have increasingly employed that strategy to get into locked iPhones they hope will hold the key to cracking cases. Now Apple is closing the technological loophole that let authorities hack into iPhones, angering police and other officials and reigniting a debate over whether the government has a right to get into the personal devices that are at the center of modern life. Apple said it was planning an iPhone software update that would effectively disable the phone’s charging and data port — the opening where users plug in headphones, power cables and adapters — an hour after the phone is locked. While a phone can still be charged, a person would first need to enter the phone’s password to transfer data to or from the device using the port. Such a change would hinder law enforcement officials, who have typically been opening locked iPhones by connecting another device running special software to the port, often days or even months after the smartphone was last unlocked.

White House warns Congress against trying to block ZTE deal

The White House pushed back on legislative efforts to reverse President Donald Trump’s deal with China that eases penalties on Chinese telecommunications giant ZTE, helping to revive the company. White House deputy press secretary Hogan Gidley defended the administration's agreement to impose lessened penalties on the company, maintaining that the punishment was "massive" and "historic." “This will ensure ZTE pays for its violations and gives our government complete oversight of their future activity without undue harm to American suppliers and their workers," Gidley said. “The Administration will work with Congress to ensure the final [National Defense Authorization Act] conference report respects the separation of powers," he added.


State of the News Media: Newspapers Fact Sheet

Since 2004, Pew Research Center has issued an annual report on key audience and economic indicators for a variety of sectors within the US news media industry. On June 13, 2018, Pew released the Newspapers Fact Sheet

  1. The estimated total U.S. daily newspaper circulation (print and digital combined) in 2017 was 31 million for weekday and 34 million for Sunday, down 11% and 10%, respectively, from the previous year. Declines were highest in print circulation: Weekday print circulation decreased 11% and Sunday circulation decreased 10%.
  2. Digital circulation in 2017 was projected to have fallen, with weekday down 9% and Sunday also down 9%. According to the independently produced reports from The New York Times and The Wall Street Journal, however, both companies saw large gains in digital circulation in the past year: 42% for the Times and 26% for the Journal, on top of gains in 2016. If these independently produced figures were included in both 2016 and 2017, weekday digital circulation would have risen by 10%.

Chairman Pai Honors Innovators in Accessibility Communications Technology

Recognizing the importance of innovative communications technology designed for people with disabilities, Federal Communications Commission Chairman Ajit Pai announced the winners of the seventh annual Chairman’s Awards for Advancement in Accessibility (Chairman's AAA). Winners of 2018 Chairman’s AAA:

  • Orbit Reader 20: This refreshable braille display and notetaker significantly reduces the price point for this type of accessible technology, which has been prohibitively expensive for many blind and low vision persons. 
  • Captioning and Description Editing Tool (CADET): WGBH in Boston and the National Center on Accessible Media have developed a free program for closed captioning and video descriptions. 
  • Content Clarifier: The IBM AbilityLab Content Clarifier is an innovative accessible technology that uses artificial intelligence (AI) algorithms, machine learning models, and natural language processing to simplify, summarize, and augment digital content to increase comprehension for people with cognitive disabilities, the aging population, or those learning English as a second language. 
  • Seeing AI: This free Microsoft app narrates the visual world to improve accessibility and independence for blind and low vision persons. 
Government and Communications

President Trump calls 'fake news' the country's biggest enemy

President Donald Trump declared that the nation's "biggest enemy is the Fake News," particularly NBC and CNN for their coverage of the North Korea summit. "So funny to watch the Fake News, especially NBC and CNN," President Trump tweeted. "They are fighting hard to downplay the deal with North Korea. 500 days ago they would have 'begged' for this deal-looked like war would break out. Our Country’s biggest enemy is the Fake News so easily promulgated by fools!"

White House restricts US press access to Kim Jong Un summit

The White House restricted journalists’ access to parts of President Donald Trump’s summit with Kim Jong Un despite long-standing arrangements intended to ensure the public is kept fully abreast of key presidential moments. Under standard rules agreed to by the White House and the press corps, a full pool of reporters travels with the president at all times and is allowed at any meetings where press access in granted, even if space is limited. The group includes representatives from various forms of media — such as TV, print and photos — who then pool the information they gather with other news outlets that are unable to be present because of space. During the photo-op at the start of Trump’s one-on-one meeting with Kim, text reporters for newswires The Associated Press, Reuters and Bloomberg were kept out of the pool, as were the designated representatives for radio and the foreign press corps. Although a television cameraman and sound technician were allowed in, the TV networks’ editorial representative — responsible for relaying information to colleagues about what occurs or is said during the photo-op — was not. No independent journalists were allowed in for another photo-op at the start of a working lunch meeting involving President Trump, Kim and top aides. US journalists learned that the lunch was underway only when footage from inside was displayed on a video feed provided by summit host Singapore.

The North Korea summit was a triumph of Trumpian stagecraft, and the media fell for it

[Commentary] Although every legitimate news organization made efforts, some better than others, to bring context and even a measure of skepticism into their mix of stories [on the Singapore summit], the event overall was a triumph of Trumpian stagecraft. And the media played its accustomed role.  Because of wall-to-wall media coverage, carefully choreographed visuals and the usual Trumpian bluster, the Singapore summit largely came across as a triumph of personal diplomacy by the president. Meanwhile, the problems with the summit — the legitimacy given to a regime with human rights abuses, the concessions given that can never be given again for greater gain, and the disrespect shown to longtime ally South Korea — weren’t exactly ignored. But they were largely lost.

[Margaret Sullivan is The Washington Post’s media columnist]

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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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