May 8, 2013 (Overhaul of Wiretap Laws)
BENTON'S COMMUNICATIONS-RELATED HEADLINES for WEDNESDAY, MAY 8, 2013
Mobile Cramming and FirstNet on today’s agenda http://benton.org/calendar/2013-05-08/
GOVERNMENT & COMMUNICATIONS
US Is Weighing Wide Overhaul of Wiretap Laws
China and Cyberwar - editorial [links to web]
China must end cyberspying on US industry, look to its own innovation - editorial [links to web]
TELECOM
GOP senators push bill to end cellphone subsidy
Rep Blackburn Wants Answers From FCC on Lifeline
AT&T Settles FCC's TRS Billing Probe for $18.25 Million - press release
INTERNET/BROADBAND
Yanking Broadband From the Slow Lane - analysis
Grandview, Missouri — Google’s newest Fiber community - press release [links to web]
Speaker Boehner suggests House will take its time on Internet sales tax
Key lawmaker: House will be 'more thoughtful' on Internet sales tax
Cracks in objections to Internet sales taxes - analysis
If the Internet Sales Tax fails, Expect Higher Gas Prices
NCTA Says Farm Bill Needs to Fix RUS Program
Scientists have been using quantum internet for years [links to web]
SPECTRUM/WIRELESS
FCC Hosts 600 MHz Band Plan Workshop - press release
TELEVISION
FCC Rejects Petition Against 3 Fox Stations [links to web]
TV Homes On Rise, Hits $115 Million [links to web]
LRG: More Than 1/4 of U.S. Adults Watch Video Daily on Something Other Than a TV [links to web]
PRIVACY
FTC Warns Data Firms on Selling Information
White House Taps Twitter Legal Vet as Nation’s First Chief Privacy Officer
Personal Information Is the Currency of the 21st Century - op-ed
POLICYMAKERS
White House Taps Twitter Legal Vet as Nation’s First Chief Privacy Officer
Which Way Will Tom Wheeler Take The FCC? Follow The Blog Trail - analysis
FCC nominee’s progress may be linked to GOP pick
AGENDA
FCC Moves June Meeting
STORIES FROM ABROAD
Syria Has Dropped Off the Internet, Again
China reacts to U.S. accusations of cyber spying [links to web]
German Court Slams Apple on Privacy [links to web]
MORE ONLINE
Federal Agencies Start to Lose Competitive Edge for Cyber Warriors [links to web]
Students Want More Mobile Devices In Classroom [links to web]
Liberal Groups Launch Ad Boycott of Facebook [links to web]
The Gender Gap in Social Media [links to web]
YouTube Is Happy to Take Your Money, but What It Really Wants Are Ad Dollars [links to web]
NYT’s Jill Abramson: Social media was biggest difference between Boston and 9/11 [links to web]
Yahoo Wants Out of Microsoft Deal [links to web]
GOVERNMENT & COMMUNICATIONS
OVERHAUL OF WIRETAP LAWS
[SOURCE: New York Times, AUTHOR: Charlie Savage]
The Obama Administration, resolving years of internal debate, is on the verge of backing a Federal Bureau of Investigation plan for a sweeping overhaul of surveillance laws that would make it easier to wiretap people who communicate using the Internet rather than by traditional phone services, according to officials familiar with the deliberations. The FBI director, Robert S. Mueller III, has argued that the bureau’s ability to carry out court-approved eavesdropping on suspects is “going dark” as communications technology evolves, and since 2010 has pushed for a legal mandate requiring companies like Facebook and Google to build into their instant-messaging and other such systems a capacity to comply with wiretap orders. That proposal, however, bogged down amid concerns by other agencies, like the Commerce Department, about quashing Silicon Valley innovation. While the FBI’s original proposal would have required Internet communications services to each build in a wiretapping capacity, the revised one, which must now be reviewed by the White House, focuses on fining companies that do not comply with wiretap orders. The difference, officials say, means that start-ups with a small number of users would have fewer worries about wiretapping issues unless the companies became popular enough to come to the Justice Department’s attention. Still, the plan is likely to set off a debate over the future of the Internet if the White House submits it to Congress, according to lawyers for technology companies and advocates of Internet privacy and freedom.
benton.org/node/151357 | New York Times
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TELECOM
BILL TO END LIFELINE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
Sens. David Vitter (R-LA), Jim Inhofe (R-OK) and Dan Coats (R-IN) have introduced a bill that would end the cellphone portion of the Federal Communications Commission's Lifeline program. “This phone program has expanded far beyond its original intent, and as so many middle class Americans struggle underneath this economy, it is really offensive for Washington to make taxpayers pay for free cell phones for others,” Sen Vitter said. The program pays for phone service, not the phones themselves. But many companies that receive funding through the program offer free and low-cost phones to their subscribers. The program is funded through fees that the telephone companies pass on to consumers on their monthly bills, not taxes. Congress first enacted Lifeline in 1985, and the FCC expanded the program to cover cellphone service in 2005. Sen Inhofe said the program has become so expansive that it "no longer addresses its primary mission to help those with the most dire needs." "Our legislation will restore Lifeline to its original intent and also protect taxpayers from further excessive government spending,” he said.
benton.org/node/151348 | Hill, The
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BLACKBURN VS LIFELINE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Rep. Marsha Blackburn (R-TN) took aim at the Federal Communications Commission's Lifeline program and wants the FCC to freeze the program until it can answer whether the government subsidy for telecom service to low-income Americans was used by terrorists. In calling out the program, she repeated her invocation of the Boston bombers from an April 24 hearing on the program, saying in a release, "The fact that the FCC can't even comment on whether or not the Tsarnaev brothers, the Boston Marathon bombers, participated in the Lifeline program is further proof the program is mismanaged and dysfunctional." Reps Blackburn and Tim Griffin (R-AR) said the program remains "plagued" by waste, fraud and abuse and called on the FCC to freeze the fund until she got answers. The letter also said that Lifeline-supported phones are "often" found at crime scenes and used in drug deals, citing law enforcement officials.
benton.org/node/151342 | Broadcasting&Cable
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AT&T TO PAY $18.25 MILLION TO SETTLE FCC INVESTIGATION
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
AT&T Inc. has agreed to pay $18.25 million to settle an investigation by the Federal Communications Commission’s Enforcement Bureau into whether the company improperly billed the Telecommunications Relay Service (TRS) fund for certain IP Relay (Internet-based TRS) calls. Among the issues under investigation were whether AT&T billed the fund for IP Relay calls by persons whom the company registered for the service without first requiring them to provide such basic information as their names, and by persons whose registration information the company failed to adequately verify. These registration and verification requirements are designed to protect the program against waste, fraud and abuse. In the consent decree, AT&T agreed to reimburse the TRS Fund $7 million, which includes interest. In addition, AT&T agreed to make a voluntary contribution of $11.25 million to the U.S. Treasury. AT&T must implement a robust compliance plan including new operating procedures, comprehensive training of its employees and contractors, and periodic reporting requirements.
benton.org/node/151329 | Federal Communications Commission | Order/Consent Decree
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INTERNET/BROADBAND
GOOGLE FIBER AND AMERICAN BROADBAND
[SOURCE: New York Times, AUTHOR: Eduardo Porter]
Milo Medin, one of @Home’s co-founders, now leads Google’s effort to deploy superspeedy 1 gigabit-per-second broadband networks — 100 times faster than the 10 Mbps plans @Home introduced long ago — in several cities around the country, starting in Kansas City last fall. Most of the nation’s innovation today relies on a broadband connection. Yet broadband seems to be the one area of the information economy that has not followed Moore’s law, named after the proposition by Intel’s co-founder Gordon Moore that the power of digital devices would roughly double every couple of years, radically expanding their capability and driving down their cost. “Internet access is constraining what people can do,” Medin said. “This puts American companies at a disadvantage. It puts Google in a place where we can’t innovate as well as we could.” President Obama recently nominated Tom Wheeler, a veteran lobbyist for the telecommunications industry, to chair the Federal Communications Commission. He has his job cut out for him: achieving fast universal broadband requires figuring out how to shake up the oligopolies that run the nation’s high-speed Internet. There has been progress lately.
benton.org/node/151355 | New York Times
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HOUSE WILL TAKE TIME
[SOURCE: The Hill, AUTHOR: Bernie Becker, Mike Lillis]
House Speaker John Boehner (R-OH) suggested that the online sales tax legislation that easily cleared the Senate this week was not one of the House's top priorities. Speaker Boehner referred reporters at a news conference to House Judiciary Committee Chairman Bob Goodlatte (R-VA), who has expressed concerns about the Senate bill. “I think they have jurisdiction over this. I've not talked to him about it,” Speaker Boehner said. “I don't know what his intent is, in terms of whether he's interested in moving it through his committee or not.” “I'm for regular order,” Speaker Boehner added, when pressed about whether he is personally interested in the bill. Senate Republicans split roughly down the middle — 21 for, and 22 against — on the proposal. The breakdown underscores that the measure likely faces a rockier path in the GOP-controlled House. But retail groups and state governments, which could gain more than $20 billion in new revenue each year under the bill, have made the sales tax measure a major priority. Because of that, Speaker Boehner, Majority Leader Eric Cantor (R-VA) and other GOP leaders will find themselves under intense pressure to bring the bill to the floor. “I think the overwhelming number of Democrats are for this bill, I think a large number of Republicans are for this bill,” Minority Whip Steny Hoyer (D-Md.) told reporters shortly after Boehner’s comments. “I think they're going to get a lot of pressure from retail people in their states who are having to compete with online sellers who don't pay tax.”
benton.org/node/151328 | Hill, The | The Hill
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CHAIRMAN GOODLATTE
[SOURCE: Los Angeles Times, AUTHOR: Jim Puzzanghera]
House Judiciary Committee Chairman Bob Goodlatte (R-VA) said his panel would take a "more thoughtful" approach to legislation allowing states to force retailers to collect sales taxes on Internet purchases. His comments signaled that momentum from the easy passage of the bill in the Senate won't lead to quick House action on the controversial issue. Chairman Goodlatte said he has problems with the proposed Marketplace Fairness Act, and criticized the Senate for bypassing the committee process by taking the bill straight to the floor. He understands the concerns of conventional retailers that they are competing with Internet sellers who do not have to collect sales tax. But he said the bill's process for collecting sales tax for hundreds of different jurisdictions and then remitting payments needed to be simplified. Chairman Goodlatte has also echoed concerns of some conservative opponents of the bill that it could set a precedent for states to collect other taxes, such as income or business-use levies, from people or companies outside their borders. "I am open to considering legislation concerning this topic, but these issues, along with others, would certainly have to be addressed," Chairman Goodlatte said. "The committee will also look at alternatives that could enable states to collect sales tax revenues without opening the door to aggressive state action against out-of-state companies.”
benton.org/node/151327 | Los Angeles Times
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CRACKS IN OBJECTIONS TO SALES TAX
[SOURCE: Fortune, AUTHOR: Dan Mitchell]
Taxes on Internet sales have been talked about since the birth of e-commerce. In those early Web days, one major objection was that taxes would be impossible to collect, given all the various local and state sales-tax regimes. Forcing merchants to adhere to the laws of thousands—or dozens if only state sales taxes are considered—of jurisdictions would have made it impossible for even the largest online store to do business. Developments in software and services have long since solved that problem.
benton.org/node/151326 | Fortune
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IF THE INTERNET SALES TAX FAILS, EXPECT HIGHER GAS PRICES
[SOURCE: National Journal, AUTHOR: Brian Fung]
What would happen if the push for Internet sales taxes falls apart? In at least a couple of states—Maryland and Virginia—it could mean higher gasoline prices. One reason the Senate’s Marketplace Fairness Act came up now is that states are hungry for new revenue. Balanced-budget rules and the slow economic recovery have combined to produce a $55 billion budget shortfall affecting all states this year. That hunt for revenue makes online shoppers an appealing target; estimates are that collecting sales taxes on Internet purchases could put an additional $23 billion a year in state coffers. Some states are so anxious for the anticipated revenues they’ve already committed the money to various projects.
benton.org/node/151325 | National Journal
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RUS FIX?
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The National Cable & Telecommunications Association wants to make sure the Farm Bill, likely being marked up in the Senate Agriculture Committee this week, fixes what it says is the ongoing problem of government subsidies to grow broadband where the service is already planted. NCTA has long complained that the USDA's Rural Utilities Service loan program has no requirement that the money goes to unserved areas. RUS modified its rules after a USDA Inspector General's report that highlighted the overbuilding. NCTA says that the changes RUS made in the wake of that report do not resolve the overbuild issue. "The fact is these rules still allow loans in areas that are 100 percent served. Currently, there is no requirement that a single unserved household be included in the project's service area in order to earn funding approval."
benton.org/node/151344 | Broadcasting&Cable
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SPECTRUM/WIRELESS
6OOMHZ PLAN WORKSHOP
[SOURCE: Federal Communications Commission, AUTHOR: Ruth Milkman]
The Federal Communications Commission hosted a public workshop May 3 as part of its LEARN program. The workshop focused on how best to structure the 600 MHz wireless band plan in the upcoming incentive auction. In proposing a band plan, the Commission focused on five key policy goals: utility, certainty, interchangeability, quantity, and interoperability. The workshop focused on tradeoffs of elements within these goals to achieve balance. At the workshop, FCC staff moderated a highly informative discussion among stakeholders representing a wide range of interests, including television broadcasters, licensed mobile broadband providers, device and component manufacturers, and other interested parties. The discussion indicated support for many of the band plan elements proposed in our Incentive Auction NPRM. We also received valuable input regarding some of the more challenging issues associated with developing the 600 MHz band plan. In particular, we had very productive technical discussions on intermodulation and harmonics interference, mobile antenna issues, filter pass band issues, and how to accommodate technical flexibility in the band.
benton.org/node/151347 | Federal Communications Commission
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PRIVACY
DATA BROKERS WARNED BY FTC
[SOURCE: New York Times, AUTHOR: Edward Wyatt]
The Federal Trade Commission said that it had sent warning letters to 10 data brokerage firms, telling them that their practices, which involve gathering and selling consumer information, could violate federal privacy laws. The companies, most of which market their services online and through toll-free phone numbers, appeared to be offering to sell consumer data for use in screening job candidates, determining eligibility for insurance or making offers of credit, the FTC said. Such practices could violate the Fair Credit Reporting Act if the sellers are legally considered “consumer reporting agencies” and they fail to verify that customers buying the consumer information have a legitimate purpose for receiving it.
benton.org/node/151351 | New York Times | FTC | WSJ | FT | Washington Post
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PERSONAL INFO
[SOURCE: Wall Street Journal, AUTHOR: Tom Cochran]
[Commentary] The currency of the 21st century digital economy is your personal information. It has no transaction costs and does not decrease in value when the supply increases. Contrary to the laws of economics, it may even increase in value with greater supply. The more information you provide to companies, the more value they can extract from it. Now that 21st century digital behemoths such as Facebook and Google have discovered how to make personal information the most valuable resource in the history of humanity, they are strip-mining mountains of it into completely unrecognizable states. Conversely, we tend to ignore this process because the most magnificent, technologically advanced and socially connected digital city is being built from it. [Tom Cochran is CTO at Atlantic Media, publisher of the Atlantic, Quartz, National Journal and Government Executive]
benton.org/node/151331 | Wall Street Journal
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POLICYMAKERS
NICOLE WONG
[SOURCE: Wall Street Journal, AUTHOR: Mike Isaac]
Apparently, Nicole Wong, Twitter’s legal director and longtime veteran of Internet litigation issues, has been picked by the Obama Administration to be the nation’s first Chief Privacy officer, a new position in the White House, created by the Obama Administration. Wong joined Twitter approximately five months ago to head up its legal team, which has long dealt with First Amendment issues for the microblogging service. Previous to her time at Twitter, Wong spearheaded decisions at Google on whether certain user-generated content would remain up on YouTube and other Google-owned applications. She also dealt much in litigation with China and its government’s decisions to censor Google search content in 2010.
benton.org/node/151323 | Wall Street Journal
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TOM WHEELER
[SOURCE: Forbes, AUTHOR: Hal Singer]
[Commentary] Interested parties of all types, from hedge fund managers to Silicon Valley entrepreneurs, are pondering how Tom Wheeler will manage the Federal Communications Commission and what he’ll focus on. A look back at his musings on a personal blog (aptly named Mobile Musings) and on his more formal writings as chairman of an advisory committee to the FCC may provide some insights. Out of the gate, Wheeler will be confronted with several pressing issues, ranging from the FCC’s merger-review authority to the broadcast-spectrum auctions to net neutrality to the IP transition. When it comes to drawing the limits of the FCC’s authority, I have argued that where the conduct under scrutiny fits squarely within the four corners of antitrust (such as mergers), the FCC should take a backseat to the antitrust agencies; for conduct that is not easily recognized as an antitrust violation (such as discrimination by a vertically integrated network owner), the FCC should take the lead. Does Wheeler agree?
benton.org/node/151324 | Forbes
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WHEELER AND THE GOP
[SOURCE: Politico, AUTHOR: Tony Romm]
As two of the Federal Communications Commission’s leaders head for the exits, their replacements still have quite the trek ahead just to get their feet in the front door. President Barack Obama’s new nominee for chairman, Tom Wheeler, may not be able to advance in the Senate unless he’s paired with a candidate for the agency’s open Republican slot — a scenario that Sen. John Thune (R-SD), the top Republican on the Commerce Committee, seemed to endorse. However, the White House hasn’t put forward a GOP name — and Senate Republicans, who by custom can suggest a nominee to the President, say they haven’t done so either. That means the agency could soon be at less than its full strength of five commissioners at a time when it’s due to address top priorities including a multibillion-dollar auction of highly prized wireless airwaves. he FCC has operated while down members in the past, though it tends to slow down the panel’s decisions. And typically, an acting chairman avoids the kinds of long-term decisions that would usurp the choices of the incoming nominee.
benton.org/node/151356 | Politico
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AGENDA
FCC RESCHEDULES JUNE MEETING
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Communications Commission Chairman Julius Genachowski moved the FCC’s June meeting from the June 6 to June 27. Chairman Genachowski plans to leave the FCC next week and Commissioner Robert McDowell is likely to leave soon, too. Moving the meeting would give Interim Chairman Mignon Clyburn more time to prep for her first public meeting.
benton.org/node/151343 | Broadcasting&Cable
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STORIES FROM ABROAD
SYRIA DROPPED OFF THE INTERNET
[SOURCE: New York Times, AUTHOR: Arik Hesseldahl]
Internet traffic into and out of Syria has ground to a halt again. The last time this happened, the folks at Renesys, a research firm that tracks the health of the Internet’s underlying plumbing, noticed that all five networks bringing Internet traffic into Syria went down more or less at once. There are four physical cables that bring bandwidth into Syria and three of them land in the coastal city of Tartus. A fourth comes in from Turkey to the north. Chances are routers in the telecommunications building were reconfigured to stop announcing themselves in the global routing tables, essentially making them invisible to the rest of the Internet. The question — as with last time this happened — is why now?
benton.org/node/151345 | New York Times
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