Daily Digest 7/26/2018 (UHF Discount Survives Court Challenge)

It is heartening to see the Federal Communications Commission’s unanimous decision to designate the $3.9 billion Sinclair Broadcasting acquisition of Tribune Media for administrative review. Although unaccustomed to praising the Trump FCC, I believe this is an excellent decision. What happens next is worrisome, however, especially since President Donald Trump decided to tweet about the FCC’s decision. The tweet would seem to signal to Sinclair not to withdraw the transaction (a typical reaction to a designation for a hearing). The Trump tweet not only makes the FCC’s job adjudicating the matter even more complicated; the President’s inappropriate, out-of-channels involvement possibly taints the whole proceeding. Only the Trump FCC knows whether we are watching an administrative smokescreen, designed to save 39 stations for a rabidly pro-Trump broadcaster while ignoring the company’s eligibility to hold any licenses. Thus far, the Trump FCC has been a master of Orwellian double-speak, saying one thing while doing the opposite. Let’s hope we are not hearing such double-speak once again.

[Tom Wheeler is a former chairman of the FCC]

[Commentary] To be sure, the Department of Justice has a right to appeal [the Sinclair/Tribune decision], and it has done so well within the 60 days allowed from the handing down of the Judge Leon decision on June 12. But one wonders what grounds support the DOJ’s claims that “in approving the merger, the district court rejected fundamental principles of economics, creating uncertainty that will have an outsized effect on vertical merger analysis.” The DOJ appears to be facing an uphill battle in the appeal as the economic models it relied on are useful only in that they are demonstrably a good approximation of the realities in the world in which the merger is grounded. If the DOJ’s appeal is to be successful, then (given its articulated grounds) it must demonstrate that the judge has erred in his assessments of the facts and the applicability of the models used in the original arguments. The economics of the models may be beautiful, and correct in certain circumstances, but if those circumstances do not prevail, the models will not help. The current reality is complex and it is posing new challenges to economists to develop new models that account for these factors. And as in the past, these new cases are providing the impetus to develop them.

[Bronwyn Howell is an adjunct scholar at the American Enterprise Institute]

Rep. Don Young (R-Alaska) won’t be the second Republican to support Democrats’ Congressional Review Act effort to revive Obama-era net neutrality rules, a Young spokeswoman confirmed. Fight for the Future relayed an Alaskan business owner’s account of Rep Young privately pledging, she said, to sign the Democrats’ discharge petition to force a CRA floor vote. Rep. Young backs congressional action to impose bans on broadband providers blocking and throttling websites, with strong privacy protections and transparency mandates, Young’s spokeswoman said — but not through this petition. “Congressman Young sees discharge petitions as a parliamentary option that should only rarely be used because they bypass regular order in committee.” House Commerce Committee Chairman Greg Walden opposes the CRA and he is “disappointed” in Rep. Mike Coffman (R-CO) backing it. He said Republicans still welcome legislating on net neutrality.

Sohn set out recommendations to ensure that the Internet is accessible and affordable and that broadband Internet access service (BIAS) providers and online platforms are transparent about how they conduct their businesses. Affordable access to the Internet is rarely discussed in conversations about Internet openness. An open network is of limited value, however, if significant numbers of people cannot access it for cost or other reasons. In the United States, fully twenty percent of Americans are not connected to BIAS. For half of those Americans and nearly forty percent of rural Americans, there is no BIAS to connect to in their area. For the other half, cost and other barriers discourage adoption.

[Gigi B. Sohn is a Distinguished Fellow, Georgetown Law Institute for Technology Law & Policy and Benton Senior Fellow and Public Advocate]

Sen Ben Sasse (R-NE) says the Trump Administration needs to get serious about cyberdefense. And he’s taking some cues from history with the hope of kicking the administration into action. Tucked in a massive defense policy bill Congress appears poised to pass in the coming weeks is a measure from Sen Sasse that would create a commission of top national security officials, lawmakers and experts to draw up a comprehensive cyberdefense strategy for the country. The proposal is based on the Project Solarium Commission, a Cold War effort President Dwight D. Eisenhower launched in the 1950s to counter the Soviet threat. It’s another way Congress is trying to force President Donald Trump’s hand in developing a clear doctrine for how the United States responds to cyberthreats from nation states like Russia, which President Trump refuses to unequivocally state interfered in the 2016 election. The 14-member “Cyberspace Solarium Commission” would consist of the director of the FBI and top deputies from the Office of the Director of National Intelligence, the Department of Homeland Security and the Pentagon. The remaining commissioners would be members of Congress and “nationally recognized” cybersecurity experts picked by House and Senate leaders from both parties.  The goal is to produce a “clean and coherent plan for deterring and defending our country from cyber attacks” by September 2019, Sen Sasse said. 

The major problem law enforcement faces in obtaining digital evidence is not the encryption of devices but figuring out which company holds the relevant data and how to get it, according to a study released by the Center for Strategic and International Studies (CSIS). Though much of the debate around access to digital evidence has focused on the challenges law enforcement agencies face in cracking encrypted devices or decoding encrypted data, CSIS researchers William A. Carter and Jennifer Daskal have found that the biggest hurdle is actually identifying the phone or email service provider that holds the data. Obtaining the data sought once the company has been identified ranks a close second, they found.The issue may seem obscure, but it matters to the thousands of state and local police departments that investigate the majority of violent crimes in the country, the researchers said. In the past, agents with a search warrant could conduct searches of a house or other property on their own, but today more and more of the evidence they seek lies in communications stored by distant technology firms.

Recent research from Gallup and Knight Foundation investigated how the use of opinion- or behavior-based metrics influenced study participants’ level of trust in the media.  Each participant was randomly assigned to an experimental group that viewed a news article and certain average historical trust ratings of the news source. Based on their experimental group, individuals saw ratings of their own (personal), all users of the platform (community), people similar to the news consumer (“people like you,” based on gender, political affiliation, age and other factors), a combination of personal ratings and either community or “people like you” ratings, or none of the aggregated trust indicators (control group). The findings of this experiment suggest that viewing aggregated trust ratings that convey group opinion affects a consumer’s trust in the news. Participants who viewed either the community average trust rating or the “people like you” average tended to be less trusting of the articles they read, compared with the groups who viewed their own past behavior or no past ratings. Participants who saw their own historical average trust rating generally remained consistent in how they rated news outlets before versus during the experiment. This study shows how malleable Americans’ trust in the news can be when exposed to group opinions, and it shows how difficult it may be to break the trend of declining trust in the media. It seems that the more people know, the more skeptical they become.

There have been a number of instances in which the President or his surrogates have flatly denied something — only to have that denial contradicted weeks or months later by new documents or statements. Often, by then the media coverage has moved on to a new controversy. The release of the tape recording between Donald Trump and his former fixer, Michael Cohen, is only the most recent example of this dynamic. Here’s a sampling of White House denials that eventually unraveled after new information was disclosed. Strikingly, these examples often involve situations that might place the president in legal jeopardy.

A new poll from Quinnipiac University finds that most Americans disapprove of how the media cover President Donald Trump, a function of a majority of independents disapproving of that coverage. Among Republicans, though, nearly 9 in 10 disapprove of the media coverage. Most Americans also disapprove of how President Trump talks about the media. Most Republicans, though — two-thirds of them — agree with Trump’s characterizations of the media. While 86 percent of Democrats trust the media to tell the truth about important issues, three-quarters of Republicans trust President Trump.

While highly ideological members of Congress tend to use their Facebook posts to criticize political opponents and support their allies, moderate lawmakers are more likely to concentrate on local issues in their outreach on the platform. For the average moderate legislator, about 54% of a member’s Facebook posts discussed places, groups, individuals or events in the politician’s state or district. But for the average very liberal or very conservative legislator (that is, among the 10% most liberal or 10% most conservative members by the same measure), just 38% of posts dealt with local issues. Instead, those very liberal and very conservative members were especially likely to express opposition toward their political adversaries and support for other members of their own party.

For months, Facebook has weathered a series of scandals — including Russian misuse of the platform to interfere in the 2016 American presidential campaign and the harvesting of its users’ data through the political consulting firm Cambridge Analytica — with hardly any effect to its business. Facebook has continued to post healthy double-digit increases in revenue and profit every quarter. But on July 25 it showed some of the first signs of wear and tear from the months of scrutiny. The Silicon Valley company reported a 42 percent increase in revenue and a 31 percent jump in profits for its second quarter, compared with a year earlier. But the results, which would be robust for most companies, were accompanied by decelerating growth in sales and Facebook’s slowest growth since 2011 in the number of its users. On a conference call to discuss earnings, CEO Mark Zuckerberg said profits would most likely take a further hit because the company planned to spend more on security. And the chief financial officer, David Wehner, said revenue growth would substantially decline for the rest of the year, partly because the company planned to give users more options with their privacy settings, which would let them limit the kinds of ads they saw. The results and commentary sent Facebook’s stock tumbling more than 23 percent in after-hours trading, erasing more than $120 billion in market value in less than two hours.

For several hours, a Chinese government database showed that Facebook had gained approval to open a subsidiary in the eastern province of Zhejiang. Facebook said it would use the company to set up an innovation hub there. Then the registration disappeared and references to the subsidiary were partially censored in Chinese media. Now the approval has been withdrawn, apparently. While the about-face does not definitively end Facebook’s chances of establishing the company, it makes success very unlikely. The decision to take down the approval, apparently, came after a disagreement between officials in Zhejiang and the national internet regulator, the Cyberspace Administration of China, which was angry that it had not been consulted more closely.