Ownership

An executive at local broadcast TV giant Sinclair defended the company and lashed out against what he called "biased" news organizations that have "an agenda to destroy our reputation" in an internal memo. The memo, written by Sinclair's Vice President of News Scott Livingston and sent to Sinclair station news directors, said he wants to “dispel some of the myths” being reported about the organization. In the memo, Livingston lists out several storylines that have emerged around the Maryland-based television company and provides what he said are facts proving them false. They range from reports about their “must run” segments to morale at their Washington station WJLA. HBO late night host John Oliver also made Sinclair and its "must run" segments the focus of a 19 minute segment earlier in July.

As the period for filing public comments on the Federal Communications Commission's plans to roll back network neutrality regulations comes to a close, telecommunications companies are submitting their final arguments. On July 17, the last day to submit comments, firms such as Comcast, AT&T and trade associations representing the telecommunications industry filed statements in support of FCC Chairman Ajit Pai’s “Restoring Internet Freedom” proposal to scrap the net neutrality rules the agency approved in 2015.

In their comments, telecommunications companies reiterated their claim that they don’t do the things net neutrality rules were designed to protect against — blocking or slowing down certain types of content and websites — and that public utility style regulations aren’t necessary.

A communication breakdown and a vacationing employee were the reasons it took more than a week to close a leak that contained data belonging to 6 million Verizon customers, according to Chris Vickery, the cybersecurity researcher who discovered the breach. Verizon said recently that an employee at one of its vendors, NICE Systems, had accidentally made the data available to anyone who had the public link to the cloud.

[Commentary] There are differences between what tech giants (Google, Facebook, Amazon, Netflix) of the internet and their smaller counterparts are saying. More importantly, there’s a difference in how the most powerful internet companies are incentivized to act. It’s a fine line, but an important distinction for those who want the existing net-neutrality rules to stay. The protests from big tech companies themselves were more subdued than past demonstrations, and few of the major companies involved explicitly demanded the legally enforceable, Title II-based net-neutrality rules stay in place today. And that leaves the major tech firms a small but significant bit of wiggle room.

Tech giants' relatively meager actions on July 12 serve as a reminder: Net neutrality is about the small, not the big. If the (still mostly hypothetical) fears of Title II advocates come true, and ISPs are able to set tolls for access to better quality, the companies with better funding will more easily be able to pay them.

A group of small and mid-sized manufacturers of broadband network products has told the Federal Communications Commission to roll back Title II, just one in a wave of comments coming in to the FCC by July 17, the deadline for initial comments in FCC Chairman Ajit Pai's net neutrality proposal. The makers of modems and routers, switching equipment and semiconductors—which included Blonder Tongue Labs, FiberSource, Infinera and more than a dozen others—say their input should get "special weight" since the D.C. appeals court that has principal jurisdiction over FCC issues has said those who sell goods and services have an "incentive to make a completely unbiased judgment on the matter." Their judgment, they told the FCC, is that there is a "serious and substantial risk" that continuing to regulate broadband under Title II "will have a negative impact on the economic well-being of the numerous small and medium size companies that make hardware and software used to provide Internet services."

[Commentary] I ended last week’s column on the hope that Baltimore-based Sinclair would use its clout as the nation’s largest station group to do better journalism, not yield to the temptation of becoming more partisan on behalf of President Donald Trump. On July 10, Sinclair confirmed to Politico that it was adding air time for Boris Epshteyn, the former Trump campaign adviser on messaging and White House aide who now serves as the company’s chief political analyst.

Epshteyn’s commentaries will now appear eight or nine times a week on all stations, Scott Livingston, Sinclair’s vice president of news, told The Sun. They had previously run three times week on a must-run basis. So much for high hopes as to which way Sinclair is headed.

IBM said that it has achieved a breakthrough in security technology that will allow every business, from banks to retailers to travel-booking companies, to encrypt their customer data on a massive scale — turning most, if not all, of their digital information into gibberish that is illegible to thieves with its new mainframe.

“The last generation of mainframes did encryption very well and very fast, but not in bulk,” said Ross Mauri, general manager of IBM's mainframe business. Mauri estimates that only 4 percent of data stolen since 2013 was ever encrypted. As the number of data breaches affecting US entities steadily grows — resulting in the leakage every year of millions of people's personal information — IBM argues that universal encryption could be the answer to what has become an epidemic of hacking.

This week, TV stations and multichannel video programming distributors (MVPDs) eligible for reimbursement of costs associated with new channel assignments resulting from the incentive auction submitted their initial cost estimates. Jean Kiddoo, Chair of the FCC’s Incentive Auction Task Force, issued the following statement: “Based on information we have received as of 7:00 a.m. today, the aggregate amount of the estimated costs reported by reimbursement-eligible entities is $2,115,328,744.33. We expect to receive additional estimates from MVPDs and a small number of stations. In addition, the initial estimates that comprise this amount will be subject to a careful review by the Commission and our fund administrator. The aggregate cost estimate provided today will therefore change for purposes of the initial allocation of reimbursement funds.”

A Tribune Media shareholder has filed a class-action lawsuit seeking to halt the company's sale to Sinclair Broadcast Group. The shareholder, Sean McEntire, is seeking class-action status in the lawsuit, filed in federal court in Chicago. McEntire accuses Chicago-based Tribune Media of giving stockholders incomplete and misleading information about the deal, including failing to provide portions of the companies' financial projections, the value of another bid for Tribune Media and other details of the process leading to the merger agreement. McEntire is asking the court to block Sinclair's purchase until Tribune Media shares the information he claims was withheld, or award damages if the deal goes through before the information is disclosed.

AT&T plans to separate its telecom operations from its media assets after clinching a takeover of Time Warner, putting veteran AT&T executive John Stankey in charge of the Time Warner business, according to people familiar with the matter. The reorganization would separate AT&T’s wireless business and its DirecTV satellite television business from the newly acquired Time Warner assets, including HBO, Warner Bros., and the Turner cable unit that houses CNN. The new structure would keep AT&T Chairman and Chief Executive Randall Stephenson atop the company with two top lieutenants, in an organization that would resemble Comcast Brian Roberts, Comcast’s chairman and chief executive, has two segment chiefs: one in charge of the cable business and the other heading NBCUniversal. Under the new structure, DirecTV would be combined with the company’s telecom operations, which are run out of AT&T’s Dallas headquarters and include both the wireless and landline business, the people familiar with the matter said. That segment would be run by John Donovan, another AT&T veteran who is currently chief strategy officer.