Morning Consult

The president-elect is scheduled to huddle with Sen Heidi Heitkamp (D-ND), a member of the Senate Broadband Caucus and a "clean coal" technology advocate, as part of Dec 2's round of transition meetings. There is speculation that Sen Heitkamp could lead the Agriculture Department.

While in Congress, Sen Heitkamp has been a proponent for rural broadband, promoting infrastructure to support high-speed Internet connections on North Dakota's Indian reservations and small towns across the state. In October, she was one of five senators who urged the Federal Communications Commission to consider how its business data services rules could deter investment from emerging providers, especially in rural areas. It's unclear whether the Heitkamp meeting pertains to a potential position in the administration, though news of the expected sit-down fueled rumors that she could be under consideration for a role at either the Energy or Interior departments or at the USDA.

Confirmation prospects for Democratic Commissioner Jessica Rosenworcel of the Federal Communications Commission, who’s awaiting a Senate vote for a second term, aren’t dead yet, apparently. “I’ve felt for some time we were gonna get that resolved, I still hope that we will,” Senate Commerce Committee Chairman John Thune (R-SD) said. Earlier, he told reporters who were asking about Commissioner Rosenworcel,”It’s a leader decision about when that would come to the floor. …But you know we’re in a whole new world now. We’re going to have a new FCC starting next year.”

The prospect of a Trump Administration complicates pending confirmations, but not necessarily in a bad way for Commissioner Rosenworcel. “Now that we’ve got a new administration, we’ll have a new FCC. They’ll be looking at how and when to proceed with her nomination,” Chairman Thune said. Democratic lawmakers say Commissioner Rosenworcel is owed a confirmation vote based on a promise from Senate Majority Leader Mitch McConnell (R-KY). In December 2014, he promised Senate Democrats that if they voted to confirm Republican FCC Commissioner Michael O’Rielly, the GOP would in turn move quickly to confirm Commissioner Rosenworcel at the beginning of the 114th Congress in 2015. That hasn’t happened.

CTIA - The Wireless Association called on the Federal Communications Commission to permanently exempt small businesses from transparency rules included in the agency’s 2015 network neutrality rules, with the current exemption scheduled to expire on Dec. 15.

“The enhanced transparency rules are unnecessary and unduly burdensome for all broadband providers, and particularly burdensome for smaller providers, many of which lack the monetary and/or staff resources to comply with complex disclosure requirements that will not provide any benefit to smaller providers’ customers,” wrote Krista L. Witanowski, assistant vice president of regulatory affairs at CTIA, in a filing with the FCC. “CTIA urges the Commission to permanently exempt small businesses from the enhanced transparency requirements and adopt a more realistic definition of the small business entities to which the exemption would apply.” The Washington-based organization represents companies such as AT&T and Verizon.

Washington (DC) may be white-knuckling its way through the last days of a traumatic 2016 election. But up on the eighth floor of the Federal Communications Commission, Michael O’Rielly is taking it all in stride. The Republican commissioner’s job is safe no matter what happens on Nov 8. Commissioner O’Rielly’s term doesn’t end until June 30, 2019, and a law allowing him to remain until a successor is appointed means he could stick around into 2020.

Perhaps it’s that sense of stability that gives Commissioner O’Rielly — whose frequent pleas for a light regulatory touch have fallen on deaf ears at a commission dominated by Democratic FCC Chairman Tom Wheeler — such an unflappable outlook. At nearly every FCC open meeting, Commissioner O’Rielly can be found dutifully dissenting against what he characterizes as the commission’s latest usurpation of congressional authority. “It’s OK. I make my points,” he said. “Sometimes I win. Sometimes I lose. And we go from there.” “Most times I lose,” he added, with a grin and a shrug. But Commissioner O’Rielly knows he will outlast the current chairman, who has indicated that he will step down in 2017 to allow a new president to appoint a chairman of his or her choice. When it comes to Commissioner O’Rielly’s plans for reining in the FCC, he is playing the long game. “You don’t have to be the chairman to get good outcomes,” he said. “Right now, the commission is viewed as a pyramid. And it doesn’t have to be.”

Don’t expect the Federal Communications Commission to rush into issuing network security rules anytime soon, even in the face of a congressional inquiry seeking the agency’s response to the massive Oct 21 distributed-denial-of-service attack. At issue is whether the FCC’s Open Internet rules restrict internet service providers’ ability to block insecure Internet of Things (IoT) devices from their networks and whether the commission should mandate greater safeguards. But the commissioners generally believe the Open Internet order already gives ISPs sufficient leeway to protect their networks from vulnerable internet-connected devices without additional regulations or standards. And, according to FCC officials, there isn’t much of an appetite to issue any new mandates now.

There are also questions as to whether cybersecurity is even in the commission’s purview. Sen Mark Warner (D-VA) sent a letter to FCC Chairman Tom Wheeler on Oct. 25, several days after a hijacked network of IoT devices took large swaths of the United States internet offline. Sen Warner asked detailed questions about the commission’s role in empowering both ISPs and consumers with the means to prevent similar attacks in the future. The senator suggested that the Open Internet rule — adopted in 2015 during the debate on net neutrality — might actually limit the ability of ISPs to block insecure IoT devices from their networks. That could make it difficult to prevent future attacks stemming from those devices. Chairman Wheeler called Sen Warner’s letter “thoughtful” and promised a response. He also disputed the notion that the rules limit security practices of ISPs. “The Open Internet order allows for reasonable network management, which clearly gives leeway to be able to deal with issues like this,” Wheeler said at the FCC’s open meeting on Oct. 27. There is clear language in the rules for ISPs to deny access to networks or devices that could put their security at risk, according to one FCC official, who added that they were “designed for flexibility, particularly when it comes to network security.” The rules allow broadband providers to implement network management practices for the purpose of “ensuring network security and integrity, including by addressing traffic that is harmful to the network,” according to the Open Internet order.

The Federal Communications Commission said that commissioners will vote on final rules governing the pricing of older bulk-data services during its next open meeting, scheduled for Nov 17. The commission first unveiled its final rules for business data services on Oct 7. The rules were initially placed on circulation, and they could have been passed at any time after receiving votes from three commissioners. The commission’s plan would place price caps on parts of the $45 billion business data services industry, which powers ATM and retail transactions as well as cell towers. The rules expand upon price caps affecting older, largely copper-based bulk-data technology. Newer packet-based Ethernet technology would not be capped under the rule, but there would be an FCC-overseen complaints process for prices deemed noncompetitive. Oct 27’s announcement said the rules will “allow for light-touch regulation of packet-based business data services,” while “retaining and updating price cap regulation” for slower bulk-data technology.

AT&T and Time Warner chief executives Randall Stephenson and Jeffrey Bewkes are pushing back against “uninformed comments” from top politicians attacking the pending $85 billion deal to combine their companies. The two business leaders also announced a new, $35-a-month streaming content service called DirecTV Now, which will likely include Time Warner content among 100 “premium” channels and will compete nationally with pricier cable plans.

A spokesman for AT&T said the company does not expect the merger with Time Warner to be approved before the planned late-November launch of DirecTV Now. The launch of the new service is just the “tip of the iceberg” in terms of its collaboration with Time Warner. “These are uninformed comments,” the AT&T executive said, stressing the $35 monthly price point of AT&T’s new DirecTV Now streaming service. “Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we’re trying to do here.” Stephenson also pointed out that the merger was a classic case of “vertical integration,” where two companies occupying different stages of production in an industry come together. “Vertical integrations are rarely a means for raising prices,” said Stephenson. “You’re not changing the market structure in any way, shape or form.” He added that while he’s sure regulators “will have some concerns with this,” the federal government has historically approved vertical integrations.

The Federal Communications Commission is expected to pass privacy rules. Once approved, the rules would require explicit consent from customers before companies can use many forms of data for marketing purposes. The agency is permitted to regulate internet service providers as it does phone companies as a result of a 2015 network neutrality rule that reclassified ISPs as common carriers.

While the net neutrality rule gives the regulator solid legal standing to issue rules for ISPs, industry giants such as AT&T have argued that the privacy rules still might not align with the FCC’s authority to regulate privacy under the 1996 Telecommunications Act. If broadband providers decide to sue, that argument will likely be the one that they use, an industry source said. The law prohibits phone carries from using a customer’s “proprietary” information, which includes the location, time, date, duration of phone calls, the type of network a consumer subscribes to, as well as any other information that a provider could obtain from a customer’s phone bill. In a regulatory filing with the FCC, AT&T argued data such as web browsing and app usage can’t be proprietary if other web entities have access to it.

[Commentary] We should learn from our own history. Following the AT&T battles, the entry of competition and new technology was greatly beneficial to consumers and businesses at every level of our economy. Can you imagine having to rent a laptop from the telephone company to access the internet? Despite the echoes of the monopolists of the past, competition in cable boxes will be sound policy as well. New technology will follow, and consumers will see the benefits in their pocketbooks. Set-top boxes are a good place to continue our positive tradition of innovation and competition in telecommunications.

[Timothy E. Wirth (D-CO) represented Colorado in the U.S. Senate from 1987 to 1993 and in the House of Representatives from 1975 to 1987.]

The Federal Communications Commission’s plan to designate web browsing and app usage as “sensitive” has privacy advocates cheering and the industry rushing to lobby the agency to tweak the final rule ahead of next week’s vote. Sen Ed Markey (D-MA), a privacy advocate, told reporters that “every click Americans make online paints a detailed picture of their lives. … Consumers should have the power to stop ISPs from collecting and using their browsing information, app usage data and other sensitive information without their express consent.”

Opponents argue that the FCC should avoid adding new categories to the existing Federal Trade Commission definition of “sensitive” data. “The proposal to include web browsing and apps usage data as sensitive information would be especially counterproductive,” the industry officials said in their filing. They added that consumers “benefit” from online advertising and personalized content that the use of web browsing history and apps usage information allows. On the other side of the debate, advocacy groups including Public Knowledge and the Center for Democracy and Technology met with FCC Commissioner Mignon Clyburn’s office to urge the agency to make the definition of sensitive data “as expansive as possible,” according to a filing.