May 20, 2013 (MetroPCS drops challenge to network neutrality rules)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, MAY 20, 2013
This week’s agenda http://benton.org/calendar/2013-05-19--P1W/
INTERNET/BROADBAND
MetroPCS drops challenge to network neutrality rules
How We’re Investing Smart To Expand Rural Broadband - press release
Setting the Right Incentives for Investment in Rural Broadband - press release
Protecting Consumers, Promoting Competition, and Ensuring Investment in Emerging Networks - analysis [links to web]
FCC Cracks Door Open on Naked DSL, Standalone Broadband
Former FCC Chairman and GTCR Fund See Strong Rural Cable Future
Part Two: Who Controls the Internet? - analysis
Part Three: Who Controls the Internet? - analysis
Chinese Hackers Resume Attacks on U.S. Targets [links to web]
Cyberattacks call for legislation and open debate - editorial [links to web]
Eavesdropping on Internet Communications - editorial
TELECOM
FCC Lifts Unneeded Telecom Rules, Frees Millions for Investment, Consumer Benefit - press release
The FCC Still Has More Work to Do in Eliminating Rotary Phone-Era Rules - press release [links to web]
Mexico’s Lucky to Have Just One Man Blocking Internet Equality. We’ve Got a Bunch - op-ed
Telecom’s Big Players Hold Back the Future - analysis
WIRELESS/SPECTRUM
Wireless Telecommunications Bureau Seeks To Supplement The Record On The 600 MHz Band Plan - public notice
AT&T blocking cellular video calls made with new Google Android app
Spectrum Valuation Puts Sinclair at the Top
Sprint Closes on Spectrum Purchase from U.S. Cellular [links to web]
Vodafone faces pressure amid proposed buyout on Verizon Wireless
Apple Mobile Devices Approved for Use on U.S. Military Networks [links to web]
OWNERSHIP
Yahoo Tumblrs for Cool: Board Approves $1.1 Billion Deal as Expected
Bold Growth Plans at Hollywood Studios [links to web]
Vodafone faces pressure amid proposed buyout on Verizon Wireless
Stephen King Says No to E-Book, to Scare Up Business [links to web]
TELEVISION
A Word From Our Sponsor
Cable is Dominant Force across TV, Internet, Social, Mobile Screens: CAB Study
Is Cable Finally Getting Parity With Broadcast? [links to web]
How Much Will Sports Become All About Cable Money? [links to web]
EMERGENCY COMMUNICATIONS
FCC Adopts Rules to Help Inform and Protect Consumers During the Transition to Text-to-911 - press release
The Role of 311 and Social Media During Disasters [links to web]
San Francisco Embraces Social Media During Earthquake Drill [links to web]
PRIVACY
Privacy watchdog EPIC files complaint against Snapchat with FTC
Google Glass worries lawmakers, casino operators [links to web]
Why we can’t quite seem to make up our minds about Google - analysis [links to web]
GOVERNMENT & COMMUNICATIONS
Eavesdropping on Internet Communications - editorial
The AP 'Scandal': The Straight Scoop
California Launches Cybersecurity Task Force [links to web]
Apple Mobile Devices Approved for Use on U.S. Military Networks [links to web]
POLICYMAKERS
Clyburn Takes Over FCC May 20
FCC Nominee Wheeler to Divest AT&T, Verizon to Avoid Conflict
GOP considers Duke professor for FCC
Telecom’s Big Players Hold Back the Future - analysis
COMPANY NEWS
AT&T Fascinated by Europe [links to web]
Consolidated's Currey: We're ready to compete with Google Fiber [links to web]
Comcast shareholders meeting includes unhappy tea party folks [links to web]
Tribune subscriber class-action suit settled [links to web]
STORIES FROM ABROAD
Canada’s Competition Bureau plans investigation into Google Canada [links to web]
Young people 'prefer to read on screen' [links to web]
INTERNET/BROADBAND
METROPCS DROPS NETWORK NEUTRALITY CHALLENGE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
MetroPCS dropped its lawsuit challenging the Federal Communications Commission's network neutrality regulations on May 17, leaving Verizon to continue the legal battle against the rules on its own. T-Mobile, which was not challenging the rules, acquired MetroPCS earlier this month. Putting the regulations into place was one of the signature accomplishments by Chairman Julius Genachowski, who stepped down on May 17 as well. In a statement, Chairman Genachowski applauded T-Mobile for withdrawing the MetroPCS suit: “The FCC’s widely supported open Internet framework has contributed to healthy growth in innovation and investment across the U.S. broadband economy. Since 2010, our strong and balanced rules have been protecting entrepreneurs and consumers, and have increased certainty and predictability for investors in Internet services as well as networks," he said. "The ongoing litigation – now pursued by a single company – only serves to reduce that certainty and predictability," Chairman Genachowski added. Verizon declined to comment. Gigi Sohn, president of consumer advocacy group Public Knowledge, claimed Verizon's ongoing challenge is an "attempt to take away the FCC's ability to protect consumers and promote competition." "In addition to being anti-consumer, this is against the long-term interests of the largest incumbent providers," she said.
benton.org/node/152199 | Hill, The | The Verge | B&C | FCC
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EXPANDING RURAL BROADBAND
[SOURCE: Federal Communications Commission, AUTHOR: Julie Veach]
The Connect America Fund is the Federal Communications Commission’s 21st Century solution to expanding broadband to unserved areas of rural America. One reason why the Connect America Fund can stay within a budget as it accomplishes this task – while continuing to support traditional voice service as its 20th Century predecessor program did – is because we are targeting the right amount of subsidies to the right places: places where help is needed the most. The old universal service fund did little to protect against unneeded subsidies. Developing ways to stop this fiscal waste was a major focus of our 2011 Connect America reforms. We are well on the way to implementing these reforms, including making initial decisions on a Cost Model that will calculate what level of support is needed, down to the Census tract level. On May 16, we adopted another set of policies to make sure that we don’t support providers in Census tracts where another provider is delivering service without subsidies. So accounting for unsubsidized providers is critical as we distribute support for rural voice and broadband in this phase, Phase II, of the Connect America Fund. Here’s how we are going to do it:
tap data in the National Broadband Map to find the presence of unsubsidized providers that deploy fixed, land-based technologies such as cable, fiber, DSL, or fixed wireless providers like WISPs (wireless Internet service providers),
check if these competitors also provide voice service, and
use that information to publish an initial list of census blocks presumed to be lacking an unsubsidized provider – and therefore potentially eligible for the Connect America Fund.
benton.org/node/152196 | Federal Communications Commission
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INCENTIVES FOR RURAL BROADBAND
[SOURCE: Federal Communications Commission, AUTHOR: Julie Veach]
The Federal Communications Commission’s Wireline Bureau is seeking comment on a number of issues relating to broadband funding for smaller rural carriers, known as rate-of-return carriers. In order to help ensure all Americans get access to broadband while increasing efficiency and accountability -- no matter what kind of company serves an area -- we overhauled universal service and created the Connect America Fund. These reforms required making support for all types of carriers more efficient and accountable. These reforms left the basic rate-of-return system in place, and preserved funding for smaller carriers at $2 billion overall, while improving safeguards against abuse and increasing accountability. But we also provide rate-of-returns the option to migrate to the new, incentive-based Connect America Fund for larger carriers. That framework is simpler, and sets strong incentives for efficient investment in broadband. So today, we are seeking further comment on exactly how to structure the pathway for rate-of-return carriers that wish to migrate to the more market-based, incentive-driven Connect America Fund. We’re looking at other ways to bring broadband to rural America too. Some small carriers have suggested that they should be able to receive support for stand-alone broadband without voice, which their current rules don’t allow. It’s an intriguing idea as consumers increasingly subscribe to fiber, DSL or cable broadband Internet access service and use a mobile phone to talk. So we’re soliciting specific proposals for carrying out this idea. And we’d like comments on how to ensure that we stay within the $2 billion budget for support for small companies if we follow this path to facilitate expanded broadband service offerings.
benton.org/node/152194 | Federal Communications Commission | | Public Notice | Public Notice II | Order
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NAKED DSL
[SOURCE: telecompetitor, AUTHOR: Bernie Arnason]
There has been some tension in the marketplace regarding broadband and voice service, particularly in rural markets. It stems from growing consumer demand for standalone broadband – that is subscribing to broadband without the requirement for an accompanying voice line (sometimes referred to as naked DSL). Regulated rate-of-return rural carriers are challenged with this marketplace desire, given the regulatory requirement for an underlying voice line with DSL, for cost recovery purposes. As a result, rural telcos have been implementing creative ways to package DSL with home phone service, even as more and more customers look for a broadband only option. To some rural telecom outsiders, the practice of forcing customers to take a landline with DSL may seem quite odd. Why force customers to buy something they don’t want (telephone line) just to get the one thing they do (broadband)? This dilemma flows from regulatory requirements, which tie Universal Service Funding and other cost recovery mechanisms to traditional phone service, not broadband. In other words, if the telco delivers a circuit to a home, it must include home phone service to qualify to receive cost recovery, in the form of High Cost Loop Support (“HCLS”) and Interstate Common Line Support (“ICLS”). A broadband-only circuit is considered special access in this context, which is not eligible for USF support. Cost recovery is crucial in high cost rural markets. Without it, phone service and broadband would be too costly for end customers.
benton.org/node/152151 | telecompetitor
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RURAL CABLE
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
Former Federal Communications Commission Chairman Reed Hundt hopes the acquisition of tier 2 cable company NewWave Communications by investment firm GTCR will be “the first of many.” “We believe cable is the universal American communications medium,” said Hundt. “Cable is the essential connection for everyone, especially in rural America.” Wireless is important but can’t carry as much information as cable – and telephone line loop lengths in rural America are very long, all of which means “cable is the answer,” Hundt said. NewWave is the nation’s 22nd largest cable company, passing 250,000 homes in rural Illinois, Indiana, Missouri and Arkansas. GTCR made its acquisition through its partnership with Rural Broadband Investments, which is headed up by Phil Spencer, who previously was CEO of at least two smaller cable systems – Windjammer Communications and Everest Communications. Hundt referred to Spencer as a “rising star” in “Cable 3.0.”
benton.org/node/152149 | telecompetitor
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WHO CONTROLS THE INTERNET II
[SOURCE: Government Technology, AUTHOR: Colin Wood]
In part one of our three-part series, we discussed America's attempts to regulate the Internet -- and many Americans are concerned about the Internet moving away from its current governance model, for good reason.
Governance varies around the globe, and one need only look at a highly-restrictive country like China to realize that the Internet doesn’t necessarily have to be free or open in any given country. Running the Internet, despite being a huge international effort, bears similarity to a grassroots co-op. Those who are most invested in the success of the Internet, such as members of the Internet Engineering Task Force (IETF), the World Wide Web Consortium (W3C), and the Internet Society (ISOC), are typically the ones making the decisions that affect the overall scheme of how the Internet works. In other words, the gardeners run the garden. But for better or worse, new authorities will likely encroach on how the Internet is run. Regulatory authorities can be broadly categorized into three groups: governments that push for control, corporations that push for profit, and individuals that push for freedom. "Regardless of national conditions or market developments, all regulatory authorities will push for control,” a 2012 study released by Gartner stated. There is a constant tug-of-war between these three forces, and in different countries, different mixtures of the forces mold the models of Internet governance seen there.
benton.org/node/152169 | Government Technology
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WHO CONTROLS THE INTERNET III
[SOURCE: Government Technology, AUTHOR: Colin Wood]
In part one and part two of our three-part series, we discussed attempts to regulate the Internet both nationally and globally. Though the future of internet governance is unknown, as regulatory agencies and governments clamp down, cooperation between Internet advocacy groups and regulatory agencies could help avoid increased Internet censorship or possible balkanization. If the Internet were a movie, it would fall into the genre of films following the general plot of King Kong. What begins as a gentle giant, peaceful and safe in its natural habitat, eventually gets scared, terrorizes the public with a destructive rampage, and ends up shot with a tranquilizer dart and made to perform in the circus, or similar. Sometimes the movie ends at this point, the protagonist misunderstood and with no real chance of redemption, and the ending is sad (The Elephant Man). In other stories, the monster is rescued or even redeemed in the eyes of the once-angry public (The Iron Giant). The Internet is just one cyber-9/11 away from being shackled, upsetting the Web’s so-far rosy childhood that the public has enjoyed so much. Even barring an emergency, with federal lawmakers and restrictive foreign nations pushing for increased regulation, it’s possible that the Internet could become less free, less open and less useful than it is today, making for quite the sad ending.
benton.org/node/152167 | Government Technology
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TELECOM
TELECOM RULES
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission unanimously agreed to lift over 120 regulatory requirements on phone companies that are unnecessary or outdated in today’s telecommunications marketplace. At the same time, the FCC preserved vital protections to ensure competition, consumer protection, universal service and public safety. Among the rules retained: a requirement that companies notify consumers when services are being eliminated, an important protection as technological transitions transform the marketplace. Among the over 120 requirements lifted by the FCC are rules that required:
Keeping paper records made redundant by digital databases
Detailed filing of property records no longer used by the FCC
Calling card records reporting that consumed 15,000 hours of compliance work annually
benton.org/node/152192 | Federal Communications Commission | read the Order | Chairman Genachowski | Commissioner Pai | The Hill | B&C
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TELECOM MONOPOLIES
[SOURCE: Wired, AUTHOR: Susan Crawford]
Carlos Slim’s companies control 80% of the landlines and 70% of the wireless market in Mexico, and the OECD said last year that uncompetitive telecom services were costing the Mexican economy $25 billion a year. Monopoly communications industry behavior may finally become socially interesting in America. There are just a few steps between what’s happened in Mexico and what’s going on here in the United States. Mexico is at the bottom of the OECD ranks for high-speed Internet access adoption and Mexico’s network investment is lower than in any other OECD country — but Slim’s profit margins are much higher than the OECD average. Yet in the absence of regulatory oversight, Slim’s profit-taking is neither illegal nor evil. It’s entirely rational for him to allocate capital to dividends and profits rather than investing in upgrades to his network, much less encouraging his competitors. He is in harvesting mode, because neither competition nor oversight pushes him to do anything else. But his behavior — which includes charging high rates, making life difficult for competitors, and obstructing attempts at regulation through the court system — is not in the interests of all Mexicans. So Mexico’s Congress passed legislation by a vote of 108-3 last week to rein in his monopolistic practices. Here’s what stands between us and Mexico: We have several monopolists, not just one. Comcast and Time Warner Cable, within their territories, have an almost complete lock on high-speed wired Internet access, and face competition from Verizon’s FiOS service in only small portions of their footprints.
benton.org/node/152148 | Wired
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WIRELESS/SPECTRUM
WIRELESS TELECOMMUNICATIONS BUREAU SEEKS TO SUPPLEMENT THE RECORD ON THE 600 MHz BAND PLAN
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
In the Broadcast Television Incentive Auction NPRM, the Federal Communications Commission sought public comment on creating a 600 MHz wireless band plan from the spectrum made available for flexible use through the broadcast television incentive auction. The FCC identified five key policy goals that would provide the framework for adopting a wireless band plan: utility, certainty, interchangeability, quantity and interoperability. The majority of commenters support many features of the proposed band plan framework that aim to achieve these goals, but express a broader range of views on how and where to configure the uplink and downlink blocks in the band plan. To evaluate and quantify the technical tradeoffs associated with configuring the uplink and downlink bands, on May 3, 2013, the FCC hosted a public workshop. At the workshop, stakeholders discussed a variety of technical aspects to consider in creating a 600 MHz wireless band plan, including mobile antenna issues, harmonics interference, intermodulation, and high power services in the duplex gap. To advance the Commission’s goal of maintaining flexibility to offer different amounts of spectrum in different geographic markets, the FCC seeks further comment on how certain Down from 51 band plan approaches can best address the potential for market variation, particularly in markets where available spectrum is constrained.
benton.org/node/152189 | Federal Communications Commission | Commissioner Pai | B&C
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AT&T AND GOOGLE HANGOUT
[SOURCE: Los Angeles Times, AUTHOR: Salvador Rodriguez]
Google's Hangouts messaging app has been receiving generally positive reviews since it was launched, but when it comes to Android users on AT&T's network, it's hit a bit of a snag: The carrier isn't allowing users to make cellular video calls. Google introduced the new Android and iOS app during the keynote at its annual developers conference. The app is designed to make it easier for users to communicate with their friends through Google by sending messages or making video calls, whether from their smartphone, tablet or computer. When the app is used on a smartphone or a cellular-connected tablet, Hangouts can also send messages using an individual's data plan. Making video calls over cellular networks is also allowed by most major carriers, but when Android AT&T users try the feature, they are getting a message telling them they must be on a Wi-Fi network to make a video call. When asked why this is happening, AT&T blamed Google and the smartphone makers. In a statement, AT&T said apps downloaded from the Internet can be used to make video calls over its cellular network. But when it comes to apps that are pre-installed, the software developers and the phone makers have to work with AT&T to enable the ability to make cellular video calling.
benton.org/node/152174 | Los Angeles Times
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SPECTRUM VALUATION
[SOURCE: TVNewsCheck, AUTHOR: Doug Halonen]
A Wells Fargo analysis values the station Sinclair Broadcast Group’s spectrum at $2.9 billion, or $35.74 per share, 35% above the company’s May 16 closing price. “We think it important for investors to focus on the broadcasters’ most important asset — the about 300 MHz of nationwide spectrum that is owned … collectively by this industry,” the report says. Using the same analysis, the study says that the spectrum value of stock for Media General and Belo Corp. were 25% and 23% above their May16 closing prices, respectively. The report goes on to say the value of the broadcast spectrum was based on the prices generated by a 2008 FCC spectrum auction, adjusted for inflation.
benton.org/node/152173 | TVNewsCheck
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OWNERSHIP
YAHOO-TUMBLR
[SOURCE: Wall Street Journal, AUTHOR: Kara Swisher]
The Yahoo board has approved a massive $1.1 billion all-cash deal to buy Tumblr. It’s not clear when the official vote was taken, but sources close to the board said the acquisition was a foregone conclusion and was unanimously approved by the directors of Silicon Valley Internet giant. There were no other competing bids, despite reports, to snap up the New York-based social blogging service. That said, Tumblr had held some very preliminary discussions about various deals with Facebook, Google, Microsoft and also Twitter earlier this year. As part of the Yahoo deal, Tumblr CEO David Karp — who will get a windfall of cash from the acquisition — will stay at Yahoo for four years at least and retain a lot of control over the service, much in the same way Instagram CEO Kevin Systrom does at Facebook. But, as there, Yahoo will undergird Tumblr’s nascent advertising business with its large and established infrastructure, said sources.
benton.org/node/152217 | Wall Street Journal | more from WSJ | NYTimes | FT | FT commentary | LA Times | SJ Mercury
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VODAFONE AND VERIZON
[SOURCE: Financial Times, AUTHOR: Anousha Sakoui, Dan Thomas, David Gelles]
Verizon controls Verizon Wireless via a 55 percent stake yet supplies billions of dollars in dividends to Vodafone, which has the remaining 45 percent stake. Verizon has been increasingly vocal this year about its desire to buy out Vodafone from the joint venture, a stake that Goldman Sachs analysts recently valued at $115 billion post-tax. Before 2011 there had been a six-year long hiatus in dividend payments from Verizon Wireless as the company used the cash it generated to pay down debt. Analysts said the lack of dividend payments was also partly an attempt to squeeze Vodafone from the US. Now this old fight has threatened to raise its head again after Verizon warned this month that it could be a lean year for dividends. But some analysts say this would be an empty threat and represents an ineffective lever in negotiations, particularly as it is argued that Verizon needs the dividends to support its own payouts. Vodafone’s full-year results could provide a turning point in the long-running saga. For analysts at Sanford C Bernstein, the UK group is set to reveal a weak hand at a critical time.
benton.org/node/152216 | Financial Times
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TELEVISION
A WORD FROM OUR SPONSOR
[SOURCE: The New Yorker, AUTHOR: Jane Mayer]
Last fall, Alex Gibney, a documentary filmmaker who won an Academy Award in 2008 for an exposé of torture at a U.S. military base in Afghanistan, completed a film called “Park Avenue: Money, Power and the American Dream.” It was scheduled to air on PBS on November 12th. The movie had been produced independently, in part with support from the Gates Foundation. “Park Avenue” is a pointed exploration of the growing economic inequality in America and a meditation on the often self-justifying mind-set of “the one per cent.” As a narrative device, Gibney focusses on one of the most expensive apartment buildings in Manhattan—740 Park Avenue—portraying it as an emblem of concentrated wealth and contrasting the lives of its inhabitants with those of poor people living at the other end of Park Avenue, in the Bronx. Among the wealthiest residents of 740 Park is David Koch, the billionaire industrialist, who, with his brother Charles, owns Koch Industries, a huge energy-and-chemical conglomerate. A large part of the film subjects the Kochs to tough scrutiny. Shortly before “Park Avenue” aired, Melissa Cohlmia, the chief spokesperson for Koch Industries, sent WNET a two-paragraph statement criticizing the film as “disappointing and divisive.” Cohlmia acknowledges, however, that neither she nor Koch had watched it. WNET aired the statement, unedited, immediately after the film. Cohlmia said that she based the critique on the trailer.
benton.org/node/152207 | New Yorker, The
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CABLE IS DOMINANT ACROSS TV, INTERNET, SOCIAL, MOBILE
[SOURCE: Multichannel News, AUTHOR:]
Released on the eve of the upfront selling season, Cabletelevision Advertising Bureau has issued a special report underscoring the breadth of the national cable networks’ collective size versus the “five screens” advertisers and agency customers are looking for their ad buys. Created at the request of a number U.S. media agencies, the "Cable Nation: Video Advertising Update," using Nielsen, comScore and Trendrr data, aims to furnish ad budget allocators with statistics that quantify the role that cable plays in the daily lives of Americans. Among the findings: Cable remains the dominant force in ad-supported television, garnering 92% and 75% of total-day and primetime ratings, respectively, against Madison Avenue’s coveted 18-to-49 demo. Moreover, the two screens of cable TV, plus Internet, hold a significant lead over four portals and Facebook with 85 hours per month. That compares with 34 hours spent with broadcast fare, and 24 hours with AOL, Google, MSN, Yahoo! and Facebook.
benton.org/node/152212 | Multichannel News
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EMERGENCY COMMUNICATIONS
FCC ADOPTS RULES TO HELP INFORM AND PROTECT CONSUMERS DURING THE TRANSITION TO TEXT-TO-911
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
The Federal Communications Commission has adopted rules requiring wireless carriers and certain other text messaging providers to send an automatic “bounce-back” text message to consumers who try to text 911 where text-to-911 service is not available. The FCC’s requirement will help protect the public by substantially reducing the risk of consumers sending a text message to 911 and mistakenly believing that 911 authorities have received it. Instead, consumers will receive an immediate response that text-to-911 is not supported and to contact emergency services by another means, such as by making a voice call or using telecommunications relay services (if deaf, hard of hearing, or speech disabled) to access 911. The FCC’s action builds upon a voluntary commitment of the four largest U.S. wireless carriers – AT&T, Sprint Nextel, T-Mobile, and Verizon – to provide bounce-back messaging capability throughout their networks by June 30, 2013. The FCC action addresses only the provision of bounce-back messages; the FCC will address text-to-911 implementation at a later date.
benton.org/node/152187 | Federal Communications Commission | Report and Order | Chairman Genachowski | Commissioner Clyburn | Commissioner Rosenworcel | Commissioner Pai
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PRIVACY
SNAPCHAT
[SOURCE: Los Angeles Times, AUTHOR: Jessica Guynn]
A privacy watchdog group is going after Snapchat for deceiving users about self-destructing messages that don't actually self-destruct. The smartphone app has become popular with young people for sending messages that a few seconds later disappear. That clever disappearing act has made the Los Angeles start-up a hit with users and some prominent investors in Silicon Valley. But it turns out that photos sent over Snapchat have a longer shelf life than people think. They don't vanish -- at least not entirely -- and can be retrieved in some cases.
benton.org/node/152183 | Los Angeles Times
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GOVERNMENT & COMMUNICATIONS
EAVESDROPPING ON INTERNET COMMUNICATIONS
[SOURCE: New York Times, AUTHOR: Editorial staff]
[Commentary] The Federal Bureau of Investigation has a new plan to intercept Internet messages, calls and video chats. Instead of requiring companies like Skype and Google to build surveillance capabilities into their services as it suggested in 2010, the FBI now proposes fining companies that fail to comply with court-ordered wiretaps. The new approach has met less opposition from other agencies, like the Commerce Department, than the earlier plan, which went nowhere because some officials worried that it would hurt innovation by imposing expensive and technically difficult requirements on start-up Internet-based communication services. Fines, some officials believe, would be less of a burden on new businesses because they might not have to worry about developing the ability to conduct wiretaps right away. The White House is evaluating the plan for submission to Congress. The Administration and Congress need to analyze carefully the F.B.I.’s proposal, details of which have not been made public. New rules will have to strike the right balance between privacy and cybersecurity and the government’s need to monitor criminal activity.
benton.org/node/152219 | New York Times
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AP SCANDAL
[SOURCE: The Huffington Post, AUTHOR: Geoffrey Stone]
[Commentary] The hysteria of the media's response to the Associated Press “scandal” is predictably self-involved and self-interested and the reaction of Republicans is predictably hypocritical. The furious condemnation of the Department of Justice in this situation is way over the top. The Fourth Amendment prohibits "unreasonable searches and seizures." Almost forty years ago, in a regrettable decision, the conservative justices on the Burger Court held that individuals have no "reasonable expectation of privacy" in information we voluntarily reveal to third parties. The Court therefore held that for the government to obtain our financial records from our bank, or our phone records from our phone company, is not an "unreasonable search or seizure" within the meaning of the Fourth Amendment. This understanding of the Fourth Amendment is regrettable because it ignores the reality that in the modern world we often, as a matter of practical necessity, expose what we quite reasonably regard as private information to third parties, such as banks, Internet providers and phone companies. That we reveal such information to those entities does not in any way suggest that we are indifferent to the privacy of the information. Nonetheless, that is the prevailing interpretation of the Fourth Amendment and there is no possibility that the current conservative majority on the Supreme Court will change it. Thus, the subpoena of AP phone records from the phone company does not violate the Fourth Amendment.
benton.org/node/152161 | Huffington Post, The
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POLICYMAKERS
CLYBURN RISES TO FCC CHAIR
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Communications Commission member Mignon Clyburn will become acting chair of the agency effective Monday, May 20. She will be the first woman to hold that post. Chairman Julius Genachowski's and Commissioner Robert McDowell's last day is May 17, with both headed to think tanks, at least temporarily, Genachowski to the Aspen Institute and McDowell to the Hudson Institute. The FCC will be at the bare minimum needed for a quorum -- three members -- until FCC chair nominee Tom Wheeler can receive his nomination hearing (no earlier than the beginning of June said a Senate Commerce Committee spokesman) and a Republican replacement for McDowell's seat has been vetted and nominated by the White House. That could take from several weeks to several months.
benton.org/node/152197 | Broadcasting&Cable
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WHEELER TO DIVEST
[SOURCE: Bloomberg, AUTHOR: Todd Shields]
Tom Wheeler, President Barack Obama’s nominee to head the Federal Communications Commission, agreed to sell holdings of $500,001 to $1 million in both AT&T and Verizon Communications to resolve possible conflicts of interest before taking office. Wheeler, a former head of wireless and cable trade groups, disclosed his holdings and willingness to divest from 78 companies that also include Google and smartphone maker Apple in documents released by the U.S. Office of Government Ethics. He also reported stakes in top cable company Comcast worth $2,002 to $30,000 that he would sell. As head of the Federal Communications Commission, Wheeler would regulate broadcast and cable companies, review industry mergers and help set rules for auctioning airwaves coveted by leading U.S. telephone company AT&T and No. 2 Verizon for the wireless services powering their growth. Wheeler, 67, reported income of at least $1,105,189 from sources including salary, advisory fees, and serving as a director of companies including Earthlink. In a letter accompanying his disclosure form, Wheeler said he would resign from Atlanta-based Earthlink’s board and sell shares of the Internet-service provider if he wins Senate confirmation. Wheeler also said he would sell his holdings in wireless provider Sprint Nextel and its partner Clearwire Corp. (CLWR) which are seeking merger permission before the agency. Media companies he listed for divestiture include cable providers Time Warner Cable and Cablevision Systems, along with broadcasters CBS and Walt Disney, which owns the ABC television network.
benton.org/node/152171 | Bloomberg | Office of Government Ethics | Reuters | The Hill
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MICHELLE CONNOLLY
[SOURCE: Politico, AUTHOR: Tony Romm]
Senate Republicans continue to search for their preferred nominee to the Federal Communications Commission — and lawmakers may be looking seriously at Michelle Connolly, a top professor at Duke University. Four industry sources confirmed to POLITICO she’s considered a strong candidate to win Republicans’ blessings for the empty seat once held by Commissioner Robert McDowell, who left the agency on May 17. Connolly currently serves as a professor in the Economics Department at Duke University. She has had two tours of duty as chief economist at the FCC — first in 2006-07 and then in 2008-09 — according to her biography online. And she has written extensively on telecom and media policy, at one point testifying before Congress in 2011 on spectrum reform. Connolly, however, is not the only name in the running. Sources have pointed to other candidates, including A.B. Cruz, who left Scripps Networks last year, and two top Republican telecom staffers on Capitol Hill, Ray Baum and Neil Fried.
benton.org/node/152209 | Politico
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TELECOM’S BIG PLAYERS HOLD BACK THE FUTURE
[SOURCE: New York Times, AUTHOR: David Carr]
[Commentary] If you were going to look for ground zero in the fight against a rapidly consolidating telecom and cable industry, you might end up on the fifth floor of the Benjamin N. Cardozo School of Law in New York. Susan Crawford, a professor at the school, has written a book, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” that offers a calm but chilling state-of-play on the information age in the United States. She is on a permanent campaign, speaking at schools, conferences and companies — she was at Google last week — and in front of Congress, asserting that the status quo has been great for providers but an expensive mess for everyone else. Crawford argues that the airwaves, the cable systems and even access to the Internet itself have been overtaken by monopolists who resist innovation and chronically overcharge consumers. In a recent conversation, she explained that wired and wireless connections, building blocks of modern life, are now essentially controlled by four companies. Comcast and Time Warner have a complete lock on broadband in the markets they control, covering some 50 million American homes, while Verizon and AT&T own 64 percent of cellphone service. Don’t get her started on the Comcast-NBCUniversal merger unless you have some time on your hands. But don’t look for a jeremiad, either.
benton.org/node/152227 | New York Times
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