Michael's Insight

Senators request additional information about AT&T mobile data allegations

Politicians Probe AT&T Over Phantom Mobile Data Charges [Broadband Reports]

I recently wrote about a lawsuit currently pending about AT&T's data usage tracking. One of the key issues in that case is whether AT&T smartphones makedata transfers on AT&T's mobile network even when phone settings have been modified to avoid background data usage.

Now, two U.S. senators have become interested in AT&T's practices and plan to investigate the issue.

Lawyers in the case conducted a study to determine whether or not AT&T is over-charging and , if so, the extent to which AT&T was over-charging for data usage. Engineers hired by the plaintiff attorneys purchased new AT&T smartphones and did not enable any push notifications, location services, or anything that could inadvertently lead to data usage. Afterwards, several data charges appeared on the bill, even during late night hours when the phone's power was off. 

This development obviously changed the tone of the case, which AT&T previously described as "without merit." The lawsuit alleges that AT&T overbills its customers anywhere from 7 to 300% for data usage.

U.S. Senators Amy Klobuchar and Herb Kohl have taken an interest in the case and sent a letter to AT&T asking the company to explain the "phantom charges." Senators Klobuchar and Kohl also asked the company to provide a thorough accounting of their billing practices and whether or not they provide safeguards against over-billing data usage and whether or not there are ways for customers to verify their data usage. 

Senate to take up mobile location gathering issue in a second committee hearing

Apple, Google, Facebook to talk privacy with Senate [CNET News] 

Last week the U.S. Senate Judiciary Committee held a hearing on the mobile location data collection issue. Both Apple and Google were brought in to discuss how their respective mobile operating systems - iOS and Android - deal with user's location data.

Now a second hearing with the Senate's Commerce Committee has been scheduled, and Facebook has been added to the list of attendees (which includes another round with Apple and Google). Notably, the Department of Justice is not involved in this hearing as it was in the first.

The topic to be discussed is "consumer privacy and protection in the mobile marketplace," including the notifications practices these companies use and how the collected data is stored and/or transferred.

The initial hearing came on the heels of the location data issue and focused primarily on data collected by Apple's iOS devices that was stored on an accessible file on Apple's iPhone and iPad devices. Apple described its data collection policies and its intentions for using the data (essentially a crowd-sourced database). Apple also promised to more thoroughly secure the data, prevent the data from staying on the phone for more than a few days, and delete all the data whenever location services were disabled on the device.

It appears the Senate isn't done with its examination of this issue, which also included Android devices and Windows Phone 7 devices (though Microsoft has not been included in the second hearing).

NCTA files comments on RUS broadband loan program

NCTA Says RUS Should Stop Broadband Loans Until Rules Are Fixed [Multichannel News] 

The Department of Agriculture's Rural Utilities Service (RUS) has instituted interim rules for its distribution of broadband development loans. However, the National Cable and Telecommunications Association (NCTA), the cable industry's trade association, has filed comments with the RUS that these rules do not fix the program's many problems and should be fixed before any more loans are distributed.

The program has received its fair share of criticism for failing to meet the intended purpose of delivering broadband to areas that aren't served by broadband, instead funding a number of applicants to build networks in areas that are already served by other providers, resulting in government-subsidized competitive providers. 

The NCTA proposes that broadband loans should be given to areas that are totally unserved as a top priority. The next tier of broadband loan distributions should be targeted to areas where the unserved make up more than 75% of all area households. The FCC and the NTIA (National Telecommunications & Information Administration) both keep records that better define "unserved," as compared to the RUS's internal records.

The NCTA has also objected to the RUS practice of including Universal Service Fund (USF) disbursements in loan repayment calculations. The FCC has plans to reform the out-dated USF, and there are good questions about whether it makes sense for the RUS to use a system that is admittedly out-dated to determine what these government-subsidized service providers should have to repay.

Senators propose disclosure for cyber attacks

Senators Want Cyberattacks To Be Disclosed [Mashable]

Five senators, including Commerce Committee Chairman Jay Rockefeller, are currently looking to have the Securities and Exchange Commission require a greater level of disclosure from companies regarding cyberattacks.

In particular, these five senators would like the SEC to establish a set of guidelines for properly reporting any attacks on networks or systems. These guidelines should also direct companies to provide specific details relating to what exactly has been compromised during the attack. 

All of this comes on the heels of the significant attack Sony experienced on its PlayStation Network, which compromised thousands of accounts of user data and credit card information. Sony's is the latest example, but other companies including Google, Intel, PayPal, and MasterCard all have recently suffered some form of cyberattack.

Another problem the SEC has with these attacks is that too often a company's investors are not informed enough regarding the implications of cyberattacks. As Sony has shown us, these cyberattacks can significantly impact a company's bottom line as it's reported Sony lost roughly $1.24 billion on the PlayStation Network breach and outage. 

Google accused of anti-competitive behavior in lawsuit

Suit Opens a Window Into Google [New York Times] 

In Massuchusetts, a state court is reviewing a claim by Skyhook Wireless against Google, in which Skyhook, a location-based services provider, claims that Google used its mobile OS Android to improperly squash competition.  They describe some real hardball tactics by the colossal Internet company.

Last year, Motorola had chosen Skyhook as its location services provider. According to Skyhook, Google "went crazy" after that decision by Motorola and threatened that Motorola devices may not fit the compatibility standards that devices must meet in order to operate Android. Soon the decision was reversed and Motorola switched to Google. A similar occurrence happened with a deal reached between Skyhook and Samsung that was quickly reversed in Google's favor. At the time, Google stated publicly that Skyhook was essentially bringing a baseless claim in the hopes of reversing the results of fair competition.

Recently the Skyhook case has led to some very interesting discovery – emails from within Google that illuminate some of Google's operating procedures. The court has now made these emails public.

One of the most troubling emails was from Android manager Dan Morrill stating that the compatibility requirements were being used "as a club to make [the phone makers] do things we want." Other emails paint Skyhook as a hungry start-up with a strong sales base that could hurt Google's ability to grow its own location-based services by limiting the number of devices using Google's services. These emails name the Motorola and Samsung deals directly as significant threats to Google's services. Further emails discuss working with Motorola's PR team after Skyhook issued a press release about the plotting by Google to steal Motorola. 

Many of the emails were redacted from public view, leaving much to the imagination. With the ever-increasing number of lawsuits based on email exchanges, it's interesting to look at one post that followed a long redacted section and simply said "PLEASE DO NOT! Thread-kill and talk to me off-line with any questions."

 

Google to send YouTube infringers to copyright school

Google to sentence YouTube violators to ‘copyright school’ [Politico]

Users posting videos to YouTube that infringe on a copyright, could find themselves having to attend Google’s new copyright school to keep their YouTube account in good standing.

Ever since YouTube came on the scene, Google has been dealing with allegations of copyright infringement and has been forced to find new ways to curb the number of unlawful videos on the site. Many lawmakers and copyright holders have criticized Google for failing to take sufficient precautions to prevent copyright infringement.

The latest Google tactic aimed at preventing copyright infringement, and thus silencing its critics, is YouTube Copyright School. If a user posts a video on YouTube that results in a notification of infringement, that user will be forced to complete the YouTube Copyright School before being allowed to post any additional videos.

The “school” consists of a tutorial video and, to prove that the user did indeed watch the video, a quiz to test the user’s understanding of YouTube’s copyright policies.

Google’s current policy suspends any users who have three copyright strikes against them. However, these users can now participate in the “school” to remove strikes from their records and improve their status. So long as the users continue to abide by the rules, they can get back on the good list and back to posting videos.

It’s an interesting way for Google to educate its users about copyright infringement. Hopefully, this education will lead to overall fewer cases of infringement on YouTube.

NCTA study reveals BIP waste and overbuilding

NCTA: Broadband Subsidies Are Wasting Millions [Broadcasting and Cable]

The NCTA has released a comprehensive study examining investments made under the Broadband Initiatives Program (BIP) that was part of the 2009 economic stimulus. While the program's funds have now been exhausted, the U.S. Department of Agriculture's Rural Utilities Service (RUS) allocated over $3.5 billion over its two year lifespan.

NCTA's study found that the program has led to millions of dollars being used to build broadband in areas that already were already being served by other providers. The FCC originally estimated that it would take around $23.5 billion to ensure that broadband reached every household.

Now, because so much has been spent on building areas already served, it appears that it will take as much as $87.2 billion to achieve the FCC’s goal.

The goal of the broadband stimulus portion of the economic recovery act was to provide broadband access to areas that may not be financially feasible or beneficial for private providers to build.

Since the program began, the NCTA and many others have expressed concern over the funds being used as government competition in the form of overbuilding in areas where private companies already invested their own capital to provide broadband access.

This latest study shows that those concerns were legitimate. It examined three particular BIP projects, and a total of 85 percent of the households in the areas that received the funding were already being served by another provider. In fact, in one area, over 98 percent of the people in the awarded areas already were being served.

Using taxpayer dollars to build out high-cost areas that aren't already served by a private provider is a laudable goal.  But when it results in government investment competing with private companies and wasting millions of dollars, while many Americans still don't have access to the promised broadband access, it's probably time for a serious review of the existing plan.

Microsoft accuses Google of false claims on email product

Microsoft: Google lied on email deal [Politico]

The government contract to supply email service to the U.S. Department of Interior has led to a fierce battle between Microsoft and Google. That battle was taken to a new level recently when Microsoft publicly accused Google of false claims relating to its email service’s fulfillment of the federal security requirements.

The deal was originally offered to Microsoft for $59 million in exchange for email services to roughly 88,000 federal employees. Shortly after Microsoft was granted the account, Google brought suit against the federal government alleging that the process for awarding the contract was rigged in Microsoft’s favor.

Since that time, Google alleged that its Google Apps for Government had received a stamp of approval for official government certification. It was thought that this certification, given under the Federal Information Security Management Act, would give Google a leg up on the competition, namely Microsoft.

In a lengthy blog post on Monday, however, Microsoft alleged that the FISMA certification claim by Google was, despite all statements by Google to the contrary, was not valid. In fact, Microsoft even pointed to official Department of Justice documents stating that the Google Apps for Government did not have FISMA certification.

Apparently, Google Apps Premier, a different suite, had received the certification, but Google Apps for Government is merely in the process of certification.

Between this dispute and the recent claim filed by Microsoft against Google before the European Commission, alleging various antitrust violations, the Microsoft-Google tension appears to be at an all time high.

Net neutrality suit dismissed from DC Circuit

Verizon's anti-net neutrality lawsuit tossed on technicality [ArsTechnica]

When the FCC released its network neutrality rules a few months ago, Internet service providers Verizon and MetroPCS were quick to respond with lawsuits.

Verizon was the first to bring a claim over the new rules. Interestingly, Verizon chose to bring its claim before the U.S. Court of Appeals for the District Court of Columbia, which is the same Court that issued the Comcast case that called the FCC’s authority into question in the first place. In fact, Verizon even requested the same judges.

As savvy as that move might have been, the case has now been dismissed for fairly technical reasons. The Court’s order pointed to the “prematurity” of Verizon’s claim. The FCC net neutrality rules had not yet been published in the Federal Register when the claims were brought. This filing must occur before a proper challenge may be brought to FCC action.

The FCC can count this as a win, for now. It’s likely that Verizon and MetroPCS will still bring their claims. They simply will not have the benefit of having the claims heard by the D.C. Court of Appeals.

FTC commissioner outlines concerns regarding Google, other tech giants

FTC commissioner: Beware of Google, Facebook, Apple, Microsoft [Politico]

According to J. Thomas Rosch, commissioner at the Federal Trade Commission, entrepreneurial garage inventors need to beware.  Rosch spoke Wednesday about his concerns regarding four large tech companies - Google, Facebook, Apple and Microsoft. 

Rosch’s concern is that these four companies could make it extremely difficult for upstart companies to enter the Internet advertising market. The FTC has concerns that those four companies have become so big that they could manipulate the market in their favor.

Rosch pointed to Google’s search methods, Facebook’s huge friend population, Apple’s app store, and Microsoft’s alliance with Facebook as signifying a highly concentrated advertising market. 

He also pointed to a proposed FTC proposal regarding advertising that could actually work against ensuring upstarts have the ability to truly compete. For instance, the FTC has proposed requiring browsers to install a “Do Not Track” tool to prevent tracking advertisements. Rosch’s opinion is that the big players will be able to find ways to work around this type of regulation while smaller players will be the most impacted.

Rosch's remarks came on the same day that the FTC ordered Google to submit to regular privacy audits for the next 20 years. That action awaits a full commission vote.

Senators express concerns over Facebook users' data privacy

Senate Democrats push Facebook on privacy [Politico]

Facebook's planned policy to allow third-party app developers to request access to users’ personal contact information stored in their profile on the site has been met with criticism, which resulted in Facebook deciding to postpone implementing the new policy for the time being.

Now the newly formed privacy panel of the U.S. Senate is getting involved. Senators Al Franken (Minn), Chuck Schumer (NY), Sheldon Whitehouse (RI) and Richard Blumenthal (Conn) are pressing Facebook on the policy.

The senators are requesting that Facebook reconsider the policy, at least as it applies to younger users who may not understand the consequences of not protecting their personal information. Further, the senators are demanding that Facebook provide detailed disclosure information to any users who could be affected. Their preference would be that these apps still be available to users even if they decline to provide the contact information, if at all possible.

Facebook has responded by saying that, while they appreciate the feedback and will use it to influence future decisions, they see great value in giving users the opportunity to share information about themselves. The company went on to say that any external app could not access personal information without the user granting permission through Facebook.

Still, Congress has its concerns, and even some House members have gotten involved in the issue. Rep. Joe Barton (Texas) and Rep. Ed Markey (Mass.) from the Bipartisan Privacy Committee have expressed similar concern to that of the Senate.

Facebook is still weighing their concerns so it remains to be seen if, when and how they will implement the policy.

Another retransmission blackout underway after LIN pulls stations from Dish

LIN Stations Go Dark On Dish [Multichannel News]

It's happening again.

Over the weekend, LIN Media pulled its broadcast channels from Dish’s network because the two companies failed to reach an agreement on increases in retransmission consent fees. It’s a story that unfortunately has become all too familiar over the past couple years.

LIN Media owns more than 24 stations in 17 markets, ranging geographically from Albuquerque to Buffalo, which Dish customers now are no longer able to view.  Within Insight's footprint, one station affects customers in the Columbus, OH market.

Both companies have issued the usual accusatory statements - Dish saying that LIN is asking for an exorbitant increase and LIN insisting they only want "fair" compensation - while Dish customers are left in the dark.

Just last week the FCC voted to begin a rule making on retransmission consent - rules that govern the process by which cable and satellite providers include broadcast channels on their lineups. The Commission is considering eliminating restrictions on providers carrying out-of-market broadcast stations during a dispute and strengthening how it defines good faith negotiations between providers and broadcasters. Both measures could help to bring some sanity to this process for consumers.

As I've said before, under the current rules, broadcasters frequently use their programming monopoly as leverage to ask for double and triple digit percentage increases in retrans fees   While the FCC will seek to tighten the rules surrounding retransmission consent negotiations, some stakeholders claim the agency lacks the jurisdiction to intervene. Unfortunately, the FCC has just begun considering these changes, and the current retransmission rules do nothing to protect Dish viewers from this blackout.

Supreme Court hands down transparency ruling in E-Rate program

Supremes: AT&T Can't Use 'Personal Privacy' To Hide USF Data [Broadband Reports]

In a unanimous decision, the U.S. Supreme Court ruled this week that AT&T can not claim a privacy exemption on data collected by the FCC regarding the company's participation in the E-Rate program. The program, which is funded by the Universal Service Fund, is designed to provide subsidies to connect schools and libraries to broadband. Ma Bell had fought a court battle to keep its billing records under E-Rate exempt from the Freedom of Information Act under a protection for "personal privacy" in the law.

The Supreme Court ruled 8-0 that AT&T's arguements were without merit. Chief Justice John Roberts wrote the court's opinion, which stated in part, "When it comes to the word ‘personal,’ there is little support for the notion that it denotes corporations, even in the legal context.” And in a bit of wit that indicates that even Supreme Court justices are not without a sense of humor, Roberts wrote, "We trust AT&T will not take it personally."

This ruling is a win for consumers. In 2004, AT&T settled a FCC investigation into its overbilling under E-Rate. This ruling ensures there will be transparency in their E-Rate billing practices going forward, meaning that USF funds are being used for their designated purpose - providing teachers and students broadband and not simply lining AT&T's pockets.

Senator Schumer calls on sites to enable HTTPS to prevent data theft

Senator wants more secure Web sites for Wi-Fi use [CNET News]

Sen. Charles Schumer (D-NY) has called on a number of online companies, including Amazon, Twitter, and Yahoo!, to adopt the HTTPS protocol to help curb password and data theft over public Wi-Fi networks. Right now, many users at public Wi-Fi hotspots transmit information, including logins and passwords for popular websites across the airwarves unencrypted.

Sen. Schumer cited the readily-available programs that allow even the most amateur hackers to access private information shared over public Wi-Fi hotspots. Sites that use HTTP protocol do not provide the security of the HTTPS protocol. HTTP is used primarily by sites that do not transmit secure information, while HTTPS uses “secure sockets layer” or SSL to encrypt sensitive information, which makes the data less susceptible to hackers.

For the most part, online retailers and merchants use HTTPS but there is currently no rule requiring them to do so. Many sites, including many that provide webmail do not have a method to allow users to log in on a secure connection. On a public Wi-Fi network, a hacker could intercept their login credentials when the unsuspecting user is signing in to their webmail site. Sen. Schumer would like to see a rule put in place requiring HTTPS, but in the meantime he is simply targeting some of the biggest online companies and requesting they adopt the more secure protocol.

Twitter currently uses HTTP protocol, as does Facebook. However, Facebook allows users to enable HTTPS, but the users must opt-in on their own.

U.S. House planning vote to repeal net neutrality this month

Boehner Says Vote To Invalidate Net Rules Could Come In March [Multichannel News]

U.S. House Speaker John Boehner believes the FCC’s recent net neutrality rulemaking will come up for a repeal vote in the House as early as this month. The rules are only a couple months old, as the FCC voted on December 21 to formalize their position on how providers manage their networks. Since that time, however, Republicans have been sworn in as a majority in the House and have indicated plans to overturn the FCC's assumption of jurisdiction over net neutrality.

House Republicans have already impacted the rulemaking by defunding the net neutrality rules enforcement in the stop-gap appropriations the House recently passed. However, Speaker Boehner believes the opposition will go even further, citing a resolution introduced by Greg Walden (R-Ore.) who chairs the Communications Subcommittee. Walden’s resolution would completely invalidate the FCC’s rules on net neutrality, and Boehner believes that resolution will quickly pass the House.

Of course, in order for any repeal to become law, the Senate must also pass the measure and President Obama must sign it. Even if the House were to overturn net neutrality, it is a long shot that it will ever pass in the Senate and even less likely that the President would ever sign it into law.

Consumer group pushing proposal to have Netflix contribute to USF broadband

Consumer group wants to tax Netflix to pay for rural broadband [Hillicon Valley]

The Universal Service Fund (USF) is an $8 billion fund to subsidize phone services in rural and high-cost build-out areas. Recently, the FCC has begun a process to transition the fund from phone service to broadband service.

Using the fund for broadband is good public policy, but migrating to broadband also raises interesting questions about who should be contributing to the fund.

The Consumer Federation of America (CFA) has stated that it believes Netflix should be forced to pay into the fund. In the CFA’s opinion, Netflix and other companies that eat up large amounts of bandwidth are just as responsible for funding broadband deployment as the providers themselves.

Mark Cooper, the director of research for CFA, compared Netflix to phone service tolls. Although they were not service providers, phone tolls paid into the USF because of the costs they imposed on phone service. Cooper believes Netflix imposes a similar toll and should be charged a similar tax.

Blair Levin, a former FCC official, stated that he wouldn’t be opposed to demanding contributions from companies like Netflix, but he stressed that before the contribution debate took place, the FCC needed to iron out the distribution process for USF funds. Levin worries that muddying the contributor debate with the distribution debate will end up in a “political stalemate” and the USF will remain the out-of-date fund it is today.

Rural phone companies are obviously in favor of contributions from high-bandwidth websites like Netflix. According to the chief executive of the National Telecommunications Cooperative Association, Netflix uses up roughly 10 percent of each provider’s bandwidth and they should be required to contribute for that high level of usage.

U.S. House votes to defund net neutrality enforcement

House votes to stop FCC funding for net neutrality [Washington Post]

The FCC's network neutrality rules are already the subject of a lawsuit filed by Verizon and MetroPCS seeking to overtun them on jurisdictional grounds. As of Thursday, they're also under assault in Congress, as the U.S. House of Representatives voted to deny funding to the FCC for the rules' enforcement budget.

The House voted 244 to 181 in approving an amendment to a spending bill that denied the FCC funding for net neutrality enforcement. The measure was championed by the Republican majority in that chamber, and the vote was largely along party lines.

Of course, for the measure to become law it must be approved by the Senate and signed into law by President Obama. It faces an uncertian future in the Senate. Republicans in that body have filed a similar measure, but they don't have a majority, although there might be enough Democrats to make it a horserace. Even so, President Obama, a supporter of the FCC's actions on net neutrality, would be unlikely to sign a bill that effectively overturns the new rules.

Defining a net neutrality violation & how that created a Comcastic opportunity for mischief

FCC tries to define net rule breach [Politico]

I’ve spent plenty of time on this blog discussing the FCC’s journey toward a net neutrality ruling. There has been detailed coverage of the various FCC agendas and hearings, as well as the various parties who have expressed their support or opposition to the policy.

One thing that hasn’t been determined through all of this back-and-forth is what truly constitutes a violation of the FCC’s net neutrality rules.

The FCC’s goals are pretty clear. They want to prevent ISPs from behavior that could hinder competition and innovation. What that behavior looks like, however, is not so clear. Why?  Because no one really knows how to define all the theoretical bad things ISP's could do.  Instead, the Commission wisely decided to provide ISP's with a rough idea of what they can and can't do and then to review behavior on an individual event basis.

Indeed, the first claim of violating net neutrality has already been filed against MetroPCS for allegedly unfairly capping usage of some applications in some of the provider’s pricing plans. MetroPCS then fired back by challenging the net neutrality regulations themselves in court.

But much more interesting was when a net neutrality claim was made against Comcast (though it never rose to the level of a formal complaint by Level3), one of Comcast's backbone providers. What happened was that Level3 altered its relationship with Netflix, resulting in a huge increase in traffic into Comcast's network.  Level3 claimed that Comcast sought to unfairly improve its economic relationship with Level3 when the traffic flow changed. 

Here's the real scoop.  Most ISP/backbone agreements anticipate approximate relationships between inbound and outbound traffic.  It has always been the industry standard to review those assumptions on a fairly regular basis and adjust the payments from one to the other accordingly.  When Level3 and Netflix altered their distribution agreement, the balance between sending and receiving data between the Comcast network and the Level3 backbone was so dramatically changed that Comcast simply sought, in the normal course of business, to reset their fee structure with Level3.  

Despite all the wild accusations, this was never about Comcast trying to block Netflix from Comcast's network; it was simply an attempt to have their existing economic relationship updated to reflect a significant change in usage patterns.  And it's simply a fact that their acquisition of NBC couldn't have come at a better time giving a group of opportunists a great chance to try to take advantage.

AllVid proponent advocates for double standard

Lobbying for an Unlevel Playing Field [Multichannel News]

Todd Spangler at Multichannel News has a good post about the FCC's proposed AllVid standard and the double standard of one of its advocates.  AllVid is the FCC proposal to replace CableCards and require all cable, satellite and phone companies to install a device designed accept and combine multiple streams of video for distribution within a premise.  It's a perfect expample of government intervention in the marketplace.

Enter Public Knowledge.  During the highly publicized approval of the recent deal between Comcast and NBC Universal, the non-profit interest group that claims to defendintellectual property rights, competition, and open internet, applauded the federal government's conditions on the deal that would "lead to equal treatment of online video and cable or satellite video" with regards to program distribution.

However, when it comes to Public Knowledge's stance with regard to AllVid their standard was reversed.

John Bergmayer, attorney for Public Knowledge, has gone on the record saying that online video distributors (Netflix, Apple, etc.) should not be held to the same standards and restrictions as cable and satellite providers. Bergmayer’s explanation seems to be that both cable and satellite providers are given “special privileges under the law” that online video distributors do not receive.

What are these special privileges? According to Bergmayer, cable and satellite providers enjoy the legal privilege of negotiating retransmission agreements with broadcasters. Bergmayer goes on to claim that because of these privileges, “it is entirely justified to treat cable differently.” 

Mr. Bergmayer, trust me.  If you want your online buddies to have the "privilege" of being forced to negotiate retransmission agreements with broadcasters as we are, not one cable or satellite operator would object.  Go for it!!

In other words, Public Knowledge for some reason feels that although online distributors should have the same access to broadcaster programming, they shouldn’t have to open their video services to the new FCC technical standard of AllVid.

It's clearly a double standard. An open standard should mean open for all providers, both traditional and online. But that doesn't appear to be the intent of AllVid advocates. To them, open means open for one set of video providers but not for traditional providers who would not have that same privilege, should online providers begin producing their own programming.

They may claim to represent the public, but many "public interest groups" receive large sums of money from companies.  And then they argue, unabashedly, seeking the help of the government to give their donors a leg up in the free market.

House subcommittee holds hearing on broadband stimulus oversight

House Hearing: Political Divide Over Broadband Stimulus [Broadcasting and Cable]

The 2009 economic stimulus included $7.2 billion to fund two programs aimed at expanding the adoption of broadband. Last Thursday, the House Energy and Commerce Communications and Technology Subcommittee held a hearing aimed at discussing the program's oversight and results.

Of the $7.2 billion, $4.7 billion was assigned to the Broadband Technology Opportunities Program (BTOP) overseen by the National Telecommunications and Information Administration (NTIA). The other $2.5 billion was managed by the Rural Utilities Service’s (RUS) as the Broadband Initiatives Program (BIP).

Part of the hearing's testimony centereed around the use of stimulus funds to overbuild existing broadband providers. One of the witnesses, Eagle Communications President and CEO Gary Shorman, discussed how the government had provided over $100 million to a recipient to build out broadband in areas his company and AT&T already serve in western Kansas.

One member of the panel, Rep. John Shimkus of Illinois mentioned an instance in his district that involved a grant to a wireless provider that overbuilt an existing wireline broadband provider. The existing provider's broadband speeds were also faster than the wireless overbuilder.

The broadband stimulus was proposed to provide broadband to Americans without access, not to subsidize broadband deployment in places that are already served. Last week's hearing served as the beginning of an important discussion about the program, its goals and results. 

FOX threatens affiliates with programming blackout if they balk at programming fee increases

Fox Takes Hard Line With Affiliates In Tussle Over Fees [WSJ]

I've written with increasing frequency about the problems inherent in the current retransmission rules that govern negotiations between broadcasters and video providers. What’s not discussed often enough is the role that the networks often play in those negotiations, even when they're not the station owners.

The local broadcast affiliates and their owners are the ones who collect retransmission fees from cable and satellite distributors, but many times it's the national broadcasters (NBC, FOX, ABC, CBS) who are, behind the scene, demanding higher programming fees from local affiliates. This is part of what leads to local broadcasters demanding huge increases in fees from distributors who are forced to pay to continue being able to provide these channels to their customers.

The Wall Street Journal reports that News Corp, which owns FOX (and the Wall Street Journal, for that matter), is unabashedly promising to drop any local FOX affiliates that refuse to pay increased programming fees to News Corp. In other words, if WDRB in Louisville refused to pay an increased fee, News Corp will simply cut WDRB off from receiving FOX programming.

Because national broadcast programming and live sporting events are some of the most popular programs local affiliates broadcast, local affiliates are largely at the mercy of the network when it comes to a demand of this nature.

On last week’s earnings call for News Corp, COO Chase Carey unveiled a plan by which FOX plans gain an additional $1 billion in annual earnings over the next two years through fees collected from local affiliates, who then attempt to pass on those costs to cable and satellite providers and ultimately end up costing customers.

Apparently Carey believes that $1 billion of additional revenue is worth exploiting the network's relationship with affiliates that broadcast FOX’s programming and the cable and satellite customers who are their viewers. Further, it’s not as though News Corp is looking at $1 billion gains because their programming is in higher demand or they’ve expanded their viewership and ad revenue. They want to gain an additional $1 billion by simply hiking their programming fees regardless of how they are doing in the ratings.

As I’ve stated before, this is a broken system. There are no natural market checks on broadcasters, who are allowed to negotiate exclusive rights to major events like the Super Bowl or March Madness and then use those monopoly-like powers to force distributors, and ultimately consumers, to pay up or lose their favorite programs.

Broadcasters petition court to put FCC white space rules on hold

Broadcasters Ask Court To Hold Off On White Spaces Decision [Multichannel News]

Recently the FCC agreed on a plan for establishing a database to identify available areas in the broadcast TV spectrum that can be used by white space devices without the risk of interference. It’s the result of a process that began in the fall of 2008. Since that time, numerous petitions for reconsideration have been filed, resulting in the FCC going back to the drawing board several times to reconsider.

Two years ago and just after the FCC began their white space process, The National Association of Broadcasters (NAB) and the Association of Maximum Service Television (MSTV) brought a claim against the FCC on the issue. As a result of this lawsuit, the two associations were precluded from filing petitions for reconsideration.

Now the broadcast trade associations, who undoubtedly are determined to hold on to the spectrum the FCC is seeking to free up for wireless broadband applications, want the federal court reviewing the decision to hold off until the FCC can hear even more challenges. In addition, the broadcasting associations are asking the court to require 60 day filings by the FCC on the status of its latest reconsiderations.

The broadcasters are determined to hold on to the spectrum, even the portions that are no longer in use since their digital transition. The FCC may have more hurdles to overcome before their spectrum decision becomes official.

FCC set to reform Universal Service Fund to move from telephone to broadband focused

 

FCC Votes Unanimously To Launch USF Reform [Multichannel News]

Bringing us into the 21st Century, the FCC voted today to move forward with Universal Service Reform.

The fund was established to help the deployment of universal telecommunications service in sparsely populated rural America where the cost of bringing voice telephony was deemed too expensive unless subsidized by the Federal government. 

Even to this date, the fund focuses almost entirely on phone service even though dial tone is available to virtually all of the nation.

As part of last year’s National Broadband Plan, the FCC laid out a course to migrate the Universal Service Fund (USF) from phone to broadband. Today, the FCC voted unanimously to approve the change.

The National Cable & Telecommunications Association has openly welcomed the FCC’s reform and approved of the path the agency has established. NCTA Vice President Jim Assey stated that the NCTA was pleased that the FCC was getting serious about reform, and was also satisfied with the greater accountability and fiscal responsibility in the proposal. The FCC’s plan includes new required disclosures from recipients of the fund. The plan also includes limiting deployment to areas where a free market solution does not exist.

FCC Chairman Julius Genachowski said that USF reform will come in two stages with the first stage being changes and reductions to the payment structure between companies for interconnection, followed by consolidating existing funds into the new broadband fund, dubbed the Connect America Fund.

ICANN ironing out top level domain creation process

U.S. seeks veto powers over new domain names [CNET News]

Who controls the Internet's archtectural rules? The anwser is complicated and, in at least one case, subject to intense debate by several stakeholders.

The Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit organization with a contract with the U.S. government to manage and assign IP address blocks and to manage top level domains (.com, .net, .org and the like). Most Internet users are familiar with the most common top level domains (TLDs). ICANN is currently working on plans to allow additional TLDs to become part of standard Internet addressing. 

How would these new TLDs work? Well, if a group submits an application for a new TLD and pays a substantial fee, ICANN would have the discretion of creating the TLD and charging the group with the responsibility of doling out the new addresses to companies and individuals seeking them. The proposed TLDs could be anything from .music to .shop, each describing the type of content that could be found on sites with that TLD.

As it turns out, the U.S. government has reservations about ICANN having the unilateral authority to decide which TLDs are approved and has proposed a new process that would allow it or other nations to veto TLDs that are found to be objectionable. The U.S. government, namely the Commerce Department's National Telecommunications and Information Administration, believes that if other countries aren't allowed to object to TLD creation, some countries might block entire TLDs, leading to international Internet fragmentation. 

For its part, ICANN is working to create consensus among many countries' governments on the TLD creation process. At the end of this month, the organization is holding a two-day meeting aimed at arriving at a compromise solution to the future of Internet addressing.

February 16 will be a big day for technology and telecommunications on Capitol Hill

Telecom doubleheader scheduled for Feb. 16 [Hillicon Valley]

There are two major issues set to be introduced in Congress this year, and it appears that they will be heard on the same day – February 16.

The House Communications Subcommittee, chaired by Greg Walden (R-Oregon), is considering the abolishment of the FCC’s recent net neutrality regulations. The regulations, which are a set of compromise principles, were agreed to by many industry members and a number net neutrality advocates.  However, they also were met with instant criticism from many Republicans on the hill  who questioned the FCC's jurisdiction, and are now facing legal battles brought by Verizon and MetroPCS.

In the Senate, Commerce Chairman Jay Rockefeller (D-W.Va) will lead a discussion of spectrum legislation aimed at enhancing public safety and first responder networks across the country.

There could even be a third telecom-related topic before Congress that day, as the Senate Judiciary Committee may potentially consider an intellectual property bill designed to combat online infringement and counterfeiting.