John McKinnon

FCC Chief Ajit Pai Develops Plans to Roll Back Net Neutrality Rules

Apparently, Federal Communications Commission Chairman Ajit Pai laid out preliminary plans to roll back the agency’s network neutrality rules in a meeting with trade associations. The conversation shows that the FCC chairman is inching closer to making his plans public, possibly as soon as April.

The plans appear aimed at preserving the basic principles of net neutrality but shifting enforcement to the Federal Trade Commission, while undoing what Republican critics regard as the regulatory overreach of the FCC’s rules. Pai’s plans likely would reverse the reclassification of broadband Internet access service as a telecommunications service, so the FTC again would have jurisdiction over the telecommunications carriers. To preserve the basic tenets of net neutrality, the plans would require broadband providers to pledge to abide by net neutrality principles such as no blocking or paid prioritization of internet traffic. That would allow the FTC to go after violators for deceptive or unfair trade practices. Chairman Pai also is believed to be considering provisions to restore FTC oversight of broadband providers’ consumer privacy protections. GOP lawmakers, with the backing of Chairman Pai, recently passed a measure repealing an Obama-era FCC privacy rule that broadband providers criticized as unfairly restrictive. Pai’s plans could begin to be adopted as soon as the FCC’s monthly meeting in May, although the June meeting remains possibility.

FCC Tees Up Rule Change That Could Spur Wave of TV Industry Mergers

Federal regulators plan to reverse an Obama-era rule that prevented major television-station owners from buying stations or readily selling themselves, a move that could touch off a wave of deals among media companies.

The proposal, which would effectively loosen a national cap on audience share for station owners that the rule had tightened, is scheduled to be put before the Federal Communications Commission in late April, an agency official said. Chairman Ajit Pai is expected to announce the plan on March 30. The longstanding ownership cap limits TV groups to a 39 percent national audience share. But for years, the government said station owners didn’t have to fully count UHF stations in calculating their share because UHF was typically a less powerful signal.

The Obama-era FCC eliminated the so-called UHF discount last September, contending that the distinction between UHF stations and VHF stations had effectively disappeared. The FCC under Chairman Pai is expected to revert to the previous rule in one of a series of actions he is taking as he plans to reverse several policies adopted under his predecessor, Tom Wheeler, who was FCC chairman for much of President Barack Obama’s second term.

Trump Takes on Tech Industry in Early Policy Moves

President Donald Trump has shown a readiness to take on the tech industry, clashing with Silicon Valley in ways that his tech-friendly predecessor hardly ever did.

The president’s executive order on immigration, which generated an outcry from the industry, was only the beginning. Trump-appointed regulators have begun scaling back network neutrality regulations that marked one of the tech industry’s most significant victories during the Obama era. That rule requires that internet service providers don't give priority to some traffic—a policy that companies like Facebook and Netflix like, because it assures them the same basic treatment that rivals would get. Regulators also are likely to undo customer-privacy restrictions imposed under the Obama administration that critics say disadvantaged cable and wireless firms such as Charter Communications and AT&T in their competition with internet firms.

The new Attorney General Jeff Sessions, like President Trump, has been a critic of the tech industry’s ability to keep customers’ communications and data from the government. Many tech and privacy policy experts believe the new administration will be aggressive in its efforts to broaden the government’s authority, particularly where national security is involved. Moreover, given some past comments by President Trump and his aides, many companies worry that the administration plans new restrictions on visas for high-skilled workers from abroad, among other potential changes to the immigration system that could be unwelcome to Silicon Valley.

Investor Peter Thiel Is Helping Mold Tech’s Ties to Donald Trump

Now as one of the tech industry’s main bridges to President-elect Donald Trump’s incoming administration, Silicon Valley investor Peter Thiel is playing a central role in helping shape the relationship with a president most tech titans didn’t want.

President-elect Trump vs. AT&T: A Signal Test of How Business Will Fare in New Washington

AT&T Chief Executive Randall Stephenson made an $85 billion wager in Oct that would turn the giant telephone company into one of the world’s biggest media companies by swallowing Time Warner. The same day, Donald Trump told supporters in Gettysburg (PA) he would block the deal if elected president. “It’s too much concentration of power in the hands of too few,” he said, calling the merger “an example of the power structure I am fighting.”

Few companies had more at stake in the presidential election than AT&T, which expected Hillary Clinton to be in the White House, said one former AT&T executive in Washington. Other businesses in a similar position are watching to see if the merger survives a still-undefined Trump administration. For the telecommunication industry, President-elect Trump could usher in an era of deregulation, a change from what many companies viewed as a strong-arm era under President Barack Obama. Yet President-elect Trump’s talk on the campaign trail about crushing the AT&T deal has left executives, lobbyists, bankers and others wondering what his view will be from the White House.

AT&T-Time Warner Deal Stokes Debate Over ‘Zero Rating’

AT&T’s practice of exempting its streaming video services from data-usage caps is rankling competitors and shaping up as a major issue for regulators set to weigh the company’s proposed acquisition of Time Warner.

When AT&T rolls out its $35-a-month DirecTV Now online TV service, its wireless subscribers will be able to stream as much as they want without it counting toward their monthly data caps. But if the same customers binge on outside services like Netflix or Hulu, those bits will add up—potentially leading to surcharges. Streaming services are likely to press regulators to scrutinize the practice—known as “zero rating”—in their review of the AT&T-Time Warner deal, people familiar with the matter said. TV networks that have streaming apps, like CBS and ESPN, also may have a stake in the matter. Several companies are likely to argue that AT&T’s DirecTV Now approach is anticompetitive, and will push for conditions on the merger, the people say.

Some Federal Communications Commission staffers already view AT&T’s DirecTV Now exemption as an example of improper zero-rating, people familiar with the situation said, because it disadvantages AT&T’s streaming rivals. The agency is considering how to address zero-rating and whether to raise it as a merger issue, the people said. Other options the agency is weighing include industrywide guidelines on zero-rating.

US Consumer Safety Agency Plans Recall of Samsung Galaxy Note 7

The Consumer Product Safety Commission announced a formal recall of the Galaxy Note 7 phone, which has sparked fires and a global crisis for Samsung Electronics Co. The CPSC said consumers “should immediately stop using and power down the recalled Galaxy Note 7 devices.” The agency said users can request a Galaxy Note 7 with a different battery, a refund or a replacement device. Samsung, in a separate statement, said it expected to have the new Note 7 devices at most US retail locations by Sept 22. Samsung already had been pursuing a global recall effort of its own, after reports surfaced of overheating and exploding batteries in its new top-of-the-line phone. But the company’s recall effort has been plagued by problems, including conflicting consumer information and communications troubles with regulators. According to the CPSC, Samsung has received 92 reports of the batteries overheating in the US, including 26 reports of burns and 55 reports of property damage, including fires in cars and a garage.

FCC’s Wheeler to Intensify Push to Break Cable’s Grip on Set-Top Boxes

The nation’s top television regulator is preparing a major push to win support for a compromise version of his proposal to open up the market for television set-top boxes, apparently. Federal Communications Commission Chairman Tom Wheeler has made a priority in 2016 of breaking the cable industry’s longtime grip on the lucrative market for those boxes. The devices have long been used to translate cable signals into TV programs, but several companies see a market for devices or services that offer integrated access to both cable TV and independent video-streaming services like Netflix Inc. or Hulu LLC. Chairman Wheeler’s plan would require cable companies to make their feeds available to other device makers through apps. Regulators hope the increased competition will help drive down prices. Proponents also say it would give a major boost to internet-based media. By some estimates, the set-top-box business brings in $21 billion a year in rental fees for cable and other pay-TV providers, which dominate the market. Consumer advocates estimate that customers overall pay $6 billion to $14 billion more for the boxes than they would if there were greater competition. But Chairman Wheeler remains at risk of being blocked by objections from cable and media companies, say several people familiar with the matter, despite extensive concessions to the cable industry and others that condemned the original plan.

Big media companies worry that the new generation of devices that Chairman Wheeler’s plan would foster might pose a long-term threat to their business model, such as by offering unlicensed internet versions of their content. They are expected to file detailed comments with the agency early this week. Some cable companies, meanwhile, worry about the potential for what they view as unaccustomed FCC meddling in their complex deals with their program suppliers.

Deals Stoke Criticism Over US’s Plan to End Internet Oversight

The US government plans within weeks to end much of its oversight of the California nonprofit that helps run the internet, a move with broad international support. But recent business deals by the nonprofit are threatening to roil those plans.

Under the deals, the nonprofit Internet Corporation for Assigned Names and Numbers, known as Icann, is set to give significant new business to its largest contractor, Verisign, under circumstances that some say show favoritism. One of the deals would give Verisign a no-bid extension on its current contract to run the huge dot-com domain. In the other deal, Verisign emerged as a surprise potential winner of the contract to operate the new dot-web domain by quietly putting $130 million behind another firm’s bid in an Icann auction. Icann denies that it has given special treatment to Verisign, saying its focus has been promoting the internet’s stability and security.

FCC’s Tom Wheeler Has Big Agenda, but Time Grows Short

Federal Communications Commission Chairman Tom Wheeler has never been known for aiming low, and he started 2016 with an ambitious agenda to reshape the rules on everything from cable TV to internet privacy.

Chairman Wheeler has yet to bring up any of his major proposals for a final FCC vote, amid industry opposition and fraying support on the commission and in Congress. And time could be running out on some of Wheeler’s big plans. Even some fellow Democrats question whether it is feasible for Chairman Wheeler—who in 2015 succeeded in pushing through a landmark network neutrality rule—to accomplish all his goals in 2016. Wheeler’s plans are complicated by election-year politics, including his reluctance to commit to departing when President Barack Obama’s tenure ends. These complexities could hamper his three big goals for the year.