Daily Digest 5/21/2018 (FTC and Net Neutrality)

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Broadband/Internet

FTC Chairman Simons: We Have Resources to Oversee ISP Net Neutrality

Federal Trade Commission Chairman Joseph Simons told Congress that his agency has the "resources and capability" to enforce network neutrality and under "the right circumstances" paid prioritization, blocking and throttling of internet content by Internet service providers that might advantage or disadvantage particular parts of the Internet could all be seen as unfair practices." His remarks came at a Senate Financial Services and General Government Subcommittee hearing on the FTC's and Federal Communications Commission's budget requests. Chairman Simons told the Senate panel that the FTC was "conducting an inventory" just to make sure that it does have the resources it needs. He has only been in his post since May 1.  Chairman Simons said he had also talked to FCC Chairman Ajit Pai, who has said the FCC is also willing to provide them resources, particularly technical resources. Asked if he thought the FTC had the authority it needed to regulate edge providers, Chairman Simons said the agency might need additional authority to regulate privacy and data security, particularly when it came to getting "remedial relief."

Net Neutrality Is Just a Gateway to the Real Issue: Internet Freedom

[Commentary] The Senate voted 52–47 to revive an Obama administration rule ensuring equal treatment for online traffic—the so-called “net neutrality” rule recently erased by the Trump Federal Communications Commission. But the vote wasn't really about "net neutrality." Instead, it was a deeply political, bipartisan call—three Republican Senators signed on—for internet freedom writ large. Here's why: "Net neutrality," these days, is shorthand for "We don't like how much unconstrained power Comcast, Spectrum, AT&T, Verizon, and CenturyLink have over us." Why, in this era of pay-for-everything, does AT&T's involvement with Michael Cohen bug us? Because we are forced to entrust these giant companies with everything we do and say, and we don't think it's rational to trust them. Because we rely on these private providers to make our businesses function, our speech flow, and our new enterprises take flight, these companies have to be burdened with public obligations. We've got a perfectly good law on the books—the one the Obama administration used as the source of its power to issue its rules. Now all we have to do is resolve to use it.

[Susan Crawford is a professor at Harvard Law School]

via Wired

How The FCC Subverted Net Neutrality's First Principles

[Commentary] Today network neutrality is often described as the principle that internet service providers (ISPs)—and only ISPs—treat all data on the internet the same. But it wasn’t always this way and shouldn’t be this way going forward. The Federal Communications Commission’s original net neutrality principles were framed in terms of consumer rights and competition among network providers, application and service providers, and content providers. When it adopted net neutrality rules five years later, however, the FCC eliminated all references to consumer protection and competition—the traditional pillars of communications regulation. The rules instead limited the application of net neutrality principles to the “last mile” portion of the network that’s operated by ISPs (i.e., the connection from an individual consumer or home to the rest of the internet). The FCC’s decision to limit the application of its net neutrality rules to ISPs represented a fundamental shift in its approach to communications regulation, a shift that effectively abandoned its traditional roles of protecting consumers and promoting competition in wire and radio communications. The FCC’s revised approach focused its efforts on the ways internet service providers do business with other network providers and big tech companies, irrespective of competition or harm to consumers.

[Fred Campbell is the director of Tech Knowledge, a Senior Policy Advisor with Wireless 20/20, and an adjunct professor in the Space, Cyber, and Telecommunications Law program at the Nebraska College of Law.]

via Forbes

Net neutrality is coming back, no matter what happens next with the Senate resolution

[Commentary]  The Republican Senate's passage May 16 of a measure that would reinstate the Federal Communications Commission's network neutrality rules is a strong indication that support for those regulations is gaining steam. Net neutrality started as an obscure policy debate, but it has become a mainstream issue, and the more people know about it, the more they support it, regardless of their political identification. That support means that even if the Senate's resolution ultimately dies in the House of Representatives or on President Donald Trump's desk, the net-neutrality rules will be reinstated, one way or another. Support for the open-internet rules has only grown over time, both among the public and in the Beltway. And the more people know about the rules and what purpose they serve, the more they like and back them, no matter which side of the political aisle they're on.

Farm Bill's Demise a Hit to Rural Broadband

The House of Representatives failed to pass a massive farm bill as Republicans were unable to shore up support from their conservative members. The 641-page bill addresses a range of issues related to agriculture, such as livestock disaster programs, conservation, feral swine, farm loan programs and broadband services in rural areas, just to name a few. The vote was 198-213. While Republican leaders said they were confident ahead of the vote, it was clear the bill was in jeopardy, and members of leadership could be seen on the floor holding last-minute negotiations, as conservative Republicans sought a promise of a vote on their preferred immigration bill. In the end, the farm bill, a measure with huge implications for low-income families and the agricultural industry, became little more than a bargaining chip in the heated intraparty battle over immigration, President Trump’s core cultural and political issue.

FCC Confirms Plan to Further Downgrade Rural America and Widen Digital Divide

Upgrading to next-generation services, like high-speed broadband, is important and essential to closing the digital divide. While the copper network may be dated, millions of Americans still rely on it to support devices like credit card machines, fax machines, school fire alarms, and medical devices. With this order, the Federal Communications Commission gives carriers the green light to provide consumers with less notice about service changes and less time to respond. If passed, this order puts rural communities, small businesses, the elderly, and people with disabilities at risk of suddenly losing access to vital services or, worse, experiencing a downgrade in service. The FCC claims its eliminating regulatory burdens to encourage broadband investment, when really it’s just trading consumer protections for self-regulation by transitioning phone companies. This entire order really boils down to the Commission turning a blind eye to their statutory mandate to protect consumers on services central to daily life. At its heart, the order trusts carriers to just do the ‘right thing.’ Carriers’ own track record has demonstrated that’s not enough.

Chairman Pai's Response to Senator Tester Regarding the E-Rate Program

On March 13, 2018, Sen Jon Tester (D-MT) and Gov Steve Bullock (D-MT) wrote to Federal Communications Commission Chairman Ajit Pai to express concerns with FCC regulations that are causing significant delays on certain school broadband projects in rural states. "It is unacceptable for bureaucratic red tape to stand in the way of high-speed internet being delivered to rural classrooms. As such, we urge you to take immediate corrective actions," they wrote. On May 10, Chairman Pai responded by writing, "[T]here have been serious flaws in the administration of the E-Rate program. That's why I have asked the Universal Service Administrative Company (USAC), which implements this program on the FCC's behalf, to improve administration of E-Rate so that schools and libraries in need do not get trapped by unnecessary technicalities."

Chairman Pai's Response to Members of Congress Regarding Broadband Deployment

On May 9, Federal Communications Commission Chairman Ajit Pai responded to various Members of Congress about the FCC's efforts to accelerate wireline broadband deployment to all Americans, particularly about the transformation of communication networks from traditional telephone service provided over copper wires towards incorporating services provided over next-generation technologies. Chairman Pai wrote, "I  agree with you that we must protect consumers during and after technology transitions - and our rules continue to do just that. Should a carrier seek to stop offering traditional telephone service or reduce that service through a de facto copper retirement, the Commission's rules still require that carrier to provide advance notification to affected customers and to seek Commission permission through the section 214 discontinuance of service process. Our rules still ensure that replacement services are compliant with 911 obligations and accessible to individuals with disabilities. And the record confirms that alarm systems, fax machines, and medical monitoring devices still continue to work over fiber facilities-and that next-generation networks dramatically expand the competitive choices for consumers for these very services (and many others)."

Chairman Pai's Response to Sen McCaskill Regarding CAF II Auction

On Dec 12, 2017, Sen Claire McCaskill (D-MO) sent a letter to the Federal Communications Commission to urge the FCC to ensure that the Connect America Fund (CAF) Phase II Auction has sufficient safeguards to ensure a fair auction and prevent waste, fraud, and abuse. On May 10, FCC Chairman Ajit Pai responded by writing, "I agree that safeguards in any broadband funding program are critical to ensure success in getting Internet access to as many unserved Americans as possible and in preventing waste and fraud. That's why the Commission decided earlier this year to require applicants to establish baseline financial and technical capabilities to bid and to preclude applicants from bidding for support at speed tiers and latencies that are inconsistent with their underlying technologies." 

US Broadband Subscriber Growth Slows in Q1

The rate of US broadband subscriber growth continued to slow in Q1 2018, according to a new analysis from Leichtman Research Group. The nation’s top cable operators and telecommunication companies, representing about 95% of the market, added roughly 800,000 net broadband subs in the period, down from 965,000 net adds in the year-ago quarter, LRG said. Cable continued to dominate, as the top companies added 845,000 subscribers, or 84% of the net adds they acquired in Q1 2017. By comparison, the top telecom companies, driven by the ongoing decline of DSL, shed 45,000 subs in Q1 2018, similar to the net losses a year earlier. LRG noted that the telcos have combined net broadband losses in each of the past eight quarters.

Privacy

What’s changing and what’s not under new data privacy rules

Europe’s new data and privacy rules take effect May 25, clarifying individual rights to the personal data collected by companies around the world for targeted advertising and other purposes. Not much will change for you, at least right away; companies will keep on collecting and analyzing personal data from your phone, the apps you use and the sites you visit. The big difference is that now, the companies will have to justify why they’re collecting and using that information. So now companies are flooding their users with notices that aim to better explain their practices and the privacy choices they offer. European Union regulators have new powers to go after companies that get too grabby or that don’t tell you clearly what they’re doing with your data.

FCC investigating reports website flaw exposed mobile phone locations

The Federal Communications Commission said it was referring reports that a website flaw could have allowed the location of mobile phone customers to be tracked to its enforcement bureau to investigate.  A security researcher said that California-based LocationSmart data could have been used to track AT&T, Verizon, Sprint, and T-Mobile US consumers without consent within a few hundred yards of their location. Sen Ron Wyden (D-OR) urged the FCC to investigate, saying on Twitter a “hacker could have used this site to know when you were in your house so they would know when to rob it. A predator could have tracked your child’s cell phone to know when they were alone.” Gigi Sohn, a former top aide at the Federal Communications Commission during the Obama administration, said user location data has been at high risk since 2017 That’s when Congress repealed FCC privacy rules barring mobile wireless carriers from sharing or selling it without customers’ express “opt-in” consent. “At a bare minimum, consumers should be able to choose whether a company like LocationSmart should have access to this data at all,” she said.

Welcome to the wireless industry’s Cambridge Analytica

[Commentary] The U.S. wireless industry is now facing its own version of a Cambridge Analytica-style public relations disaster.  Specifically, a hack into the website of a company called LocationSmart reportedly allowed anyone to obtain real-time location information for any mobile device from AT&T, Verizon, T-Mobile and Sprint. As reported by security researcher Brian Krebs and ZDNet, an “elementary bug” on the try-it-before-you-buy-it page on LocationSmart’s website could be exploited so that anyone could essentially obtain real-time location information on everyone who is carrying their phone in their pocket. "I had a friend who was driving around Hawaii and [with permission] pinged the location and I could watch the marker move around the island. It's the kind of thing that sends chills down your spine," said researcher Robert Xiao from the Human-Computer Interaction Institute at Carnegie Mellon University.

via Fierce
Ownership

International politics emerging as a factor in Sprint/T-Mobile merger

One of the federal agencies that must sign off on the proposed merger between Sprint and T-Mobile is the Committee on Foreign Investment in the US (CFIUS), and that agency has become a more important factor in recent international merger-and-acquisition action.  Indeed, under the Trump administration and led by Treasury Secretary Steven Mnuchin, the CFIUS played a critical role in ultimately blocking Broadcom’s attempted hostile takeover of Qualcomm over national security concerns. Such concerns may well factor into the proposed merger of Sprint and T-Mobile, largely due to the holdings of Sprint parent SoftBank. SoftBank is the biggest shareholder in China’s Alibaba, Taiwan’s Foxconn is an investor in the Vision Fund from SoftBank’s Masayoshi Son, and that China’s Huawei is a SoftBank equipment supplier.

via Fierce

Boost Mobile Founder Peter Adderton is against the T-Mobile-Sprint merger: Here's why.

The founder and former CEO of Boost Mobile USA says the proposed T-Mobile-Sprint merger should not happen. Certainly not unless Boost, which is currently owned by Sprint, and MetroPCS, a unit of T-Mobile, are spun off. Peter Adderton, who still runs Boost in Australia from his home in Los Angeles, says he’s concerned about the more than 30 million “prepaid” wireless customers who would be consolidated under the new T-Mobile. Though the distinctions between prepaid and postpaid phone service are getting fuzzier nowadays, prepaid plans tend to cater to more budget-conscious consumers who pay in advance for the service they think they’ll use. MetroPCS, Boost, and Sprint-owned Virgin Mobile USA epitomize such brands. Adderton is also concerned about the future of so-called MVNOs (Mobile Virtual Network Operators), the mobile companies that negotiate wholesale rates with all the major carriers, including AT&T and Verizon Wireless, then resell service under their own brand names.

Chairman Pai's Response to Sen Durbin Regarding Sinclair Broadcast Proposal to Acquire Tribune Media

On April 16, 2018, Sen Dick Durbin (D-IL) wrote to Federal Communications Commission Chairman Ajit Pai regarding the merger between Sinclair Broadcast Group and Tribune Media Company. "In making its determination whether the proposed merger to allow a single company to reach 72 percent of U.S. television households serves the public interest, I urge the FCC to carefully consider Sinclair's conduct and the significant harm it poses," Sen Durbin wrote. On May 10, Chairman Pai responded by writing, "I can assure you that Commission staff will review the transaction, including all recent filings, to ensure that it complies with all applicable laws. Moreover, the Commission's informal 180-day shot clock has been paused since January 4, 2018, because we have not had adequate information upon which to base a decision on the proposed transfer of control."

Broadcasting

Debunking the Sinclair Agenda Myth

Unfortunately, there is a false narrative in Washington (DC) that ATSC 3.0 will only benefit one particular company.  In fact, this narrative goes even further, suggesting everything the Federal Communications Commission has done in the media space over the last 17 months has been to benefit one company, in this case, Sinclair Broadcast Group. This misguided fantasy is perplexing to other broadcast stations across the country that have seen real benefits to our actions.  That is why I believe it is time to call these assertions for what they truly are: a rhetorical tool designed to divert attention from opponents’ lack of substantive objections to the underlying policies, combined with what seemingly appears to be an extreme personal dislike for the company itself. The American people deserve to know that decisions in these matters were based on the underlying law and corresponding record — as required.  The Commission’s actions under Chairman Pai’s leadership have been designed to reduce the labyrinth of outdated and costly media rules that no longer make sense today.  This is vital in the current marketplace where television broadcasters are not competing solely amongst each other, but, also, with cable networks and major over-the-top platforms like Netflix and Amazon. The following is an effort to examine each major media item approved by this Commission, which should help eliminate any notion of favoritism towards Sinclair.

Sen. Manchin Bemoans Demise of Fairness Doctrine

Debate over the so-called Fairness Doctrine was renewed at a Senate Financial Services and General Government Subcommittee hearing May 17 when Sen Joe Manchin (D-WV) quizzed Federal Communications Commission Chairman Ajit Pai on the issue. The hearing was wrapping up when Sen Manchin interrupted the closing comments of subcommittee chairman Sen James Lankford (R-OK) to ask if he could say something more. That something was suggesting that the current "toxicity" in the political arena could be traced to the doctrine's demise. He said that the "how can we destroy each other" mentality was not who legislators really were. Sen Manchin said he had talked with a former senator who had been around before and after the doctrine and cited the doctrine repeal as the turning point for divisiveness. Sen Manchin said that up until that time, the radio and TV shows had provided both sides. "Everything had to be equal." Sen Manchin said something had to be done to save the country from "destroying itself," suggesting legislators were actually all good friends, but were being pushed apart.

End of Repack? Would You Believe 2025?

The 957 stations moving to new channels in the Federal Communications Commission repack of the TV band might get up and running on those channels in two years as the agency has mandated, but many may have to settle for temporary side-mount antennas and loss of coverage for three to five years because there aren't enough tower rigging crews to go around. What can be done?

Advertising

News publishers protest Facebook's new political ad rules

Major news organizations raised objections to Facebook's plans to treat ads promoting political news coverage the same as political advocacy ads. Under changes Facebook will roll out May 22 aimed at combating the spread of political misinformation, all Facebook ads featuring political content will get a “Paid for by” label and would carry a disclaimer. Publishers say these new rules are too broad. These political messaging labels would also appear on "sponsored" posts that news organizations buy to amplify the reach of an article or video on the political news of the day. Lumping news publishers with political advocacy groups "dangerously blurs the lines between real reporting and propaganda," said a letter sent to Facebook CEO Mark Zuckerberg Friday by David Chavern, president and CEO of the News Media Alliance, which represents 2,000 news organizations in the U.S. and around the world. 

Government & Communications

President Trump personally pushed postmaster general to double rates on Amazon, other firms

Apparently, President Donald Trump has personally pushed US Postmaster General Megan Brennan to double the rate the Postal Service charges Amazon.com and other firms to ship packages, a dramatic move that probably would cost these companies billions of dollars. Brennan has so far resisted Trump’s demand, explaining in multiple conversations occurring in 2018 and last that these arrangements are bound by contracts and must be reviewed by a regulatory commission, apparently. She has told the president that the Amazon relationship is beneficial for the Postal Service and gave him a set of slides that showed the variety of companies, in addition to Amazon, that also partner for deliveries. Despite these presentations, President Trump has continued to level criticism at Amazon. And in April, his critiques culminated in the signing of an executive order mandating a government review of the financially strapped Postal Service that could lead to major changes in the way it charges Amazon and others for package delivery.

Policymakers

FCC Announces Membership of BDAC Harmonization Working Group

This Public Notice serves as notice that Federal Communications Commission Chairman Ajit Pai has appointed members to serve on the Harmonization working group of the Broadband Deployment Advisory Committee (BDAC). This working group is being formed following the vote of the BDAC on April 25, 2018, to approve both the Model Code for Municipalities and Model Code for States, subject to the understanding that further work would be done to address inconsistencies and otherwise harmonize the two codes. The Harmonization Working Group has been tasked with revising the Model Code for States and the Model Code for Municipalities with the goal of producing model codes that are harmonized with each other and with the BDAC’s prior recommendations. 

Chair: Elizabeth Bowles, President and Chairman of the Board, Aristotle
Vice-Chairs: Kelleigh Cole, Director, Utah Broadband Outreach Center, Utah Governor’s Office of Economic Development
David Young, Fiber Infrastructure and Right of Way Manager, City of Lincoln, Nebraska, National League of Cities

Members:

  • Jonathan Adelstein, President and Chief Executive Officer Wireless Infrastructure Association
  • Allen Bell, DOT, Joint Use and Franchise Manager, Georgia Power Company Southern Company
  • Robert DeBroux, Director, Public Policy and Federal Regulatory Affairs TDS- Telecom
  • Douglas Dimitroff, Partner, Phillips Lytle LLP New York State Wireless Association
  • David Don, Vice President, Regulatory Policy Comcast
  • Larry Hanson, Director Georgia Municipal Association
  • Andy Huckaba, City Council Member City of Lenexa, Texas
  • Kelly McGriff, General Counsel Uniti Fiber
  • Milo Medin, Vice President, Access Services Google Fiber
  • Chris Nurse, Assistant Vice President, State Legislative and Regulatory Affairs AT&T
  • The Honorable Karen Charles Peterson, Commissioner, Massachusetts Department of Telecommunications and Cable, National Association of Regulatory Utility Commissioners
  • Brent Skorup, Research Fellow, Technology Policy Program Mercatus Center, George Mason University
More Online
 

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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