Holidays Over – Back to Work (Updated)

The holidays must be over, cause there certainly was a lot going on in telecommunications policy this week. We’ve had our eye on a report exploring federal investment in information infrastructure, a proposal to use the Universal Service Fund to make broadband service more affordable for low-income families, the Supreme Court’s protect of the First Amendment, the introduction of new Internet domain names, and a raging debate on how to deal with foreign websites that steal U.S. copyright material.

Competitiveness, Innovative and Information Infrastructure
On January 6, the Department of Commerce delivered to Congress a new report, The Competitiveness and Innovative Capacity of the United States, exploring, in part, the importance of federal government investment in an expansive modern electrical grid that provides robust broadband Internet access in both urban and rural communities. The report highlights the National Telecommunications and Information Administration’s Broadband Technology Opportunities Program (BTOP). Funding through the American Recovery and Reinvestment Act, BTOP projects are already having a positive impact on the lives of Americans: new public computer centers are open, free computer classes and job-trainings are underway, and infrastructure projects are under construction. Already, grantees in NTIA’s BTOP program say that they have deployed or upgraded more than 29,000 miles of broadband infrastructure and installed more than 24,000 workstations in public computer centers. In the last quarter, grantees provided more than 755,000 hours of training to around 220,000 participants. And grantees say that their programs have already led to a total of more than 230,000 new broadband subscribers.

In its coverage, Broadcasting&Cable emphasizes that the report says “techniques such as improvements in spectrum efficiency, increases in network density through cell site construction, and offloading traffic to wired networks will not be sufficient to allow capacity to keep up with demand," though it added that being more efficient with spectrum "can" be part of the solution. In other words, the report said, wireless carriers won't be able to handle demand unless they have access to "additional parts of the spectrum." It called "vital" the Federal Communications Commission's planned reallocation of broadcast spectrum -- currently awaiting congressional approval of the ability to pay broadcasters to exit -- and indicated it would be transferring the spectrum to "more efficient use."

Modernizing a Communications Lifeline
On the heels of the Commerce Department report and in continuing efforts to implement the National Broadband Plan, on January 9 Federal Communications Commission Chairman Julius Genachowski outlined a draft proposal that would reform the FCC’s Lifeline program to include provisions to encourage broadband adoption.

I. Proposed changes to eliminate waste, fraud, and abuse from and otherwise reform Lifeline will:

Establish clear goals and metrics to measure performance towards those goals;
Create a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber;
Set a budget for Lifeline, while acknowledging that the size of the program should fluctuate as the economy improves or worsens and the Lifeline-eligible population shrinks or grows.
Establish national eligibility criteria to ensure access to Lifeline service for all low-income consumers who meet federal standards for participation in the program, with the recognition of the unique circumstances facing Tribal communities. States would be permitted to add to these criteria.
Conduct independent audits every two years on every carrier that receives more than a specified annual amount of support from the program.

II. Reforms will start the process of modernizing Lifeline from telephone service to supporting broadband:
Broadband has gone from being a luxury to a necessity for Americans, including to look for and find a job and access education and healthcare services. Proposed modernization of Lifeline will:

Establish a Broadband Adoption Pilot Program using savings from other reforms to test and determine how Lifeline can best be used to increase broadband adoption among Lifeline-eligible consumers. Starting this year, the program will solicit applications from broadband providers and will select a number of projects to fund. Lifeline will help reduce the monthly cost of broadband service, but applicants will be expected to help address other challenges to broadband adoption, including the cost of devices and digital literacy.
Increase digital literacy training at libraries and schools. A Further Notice of Proposed Rulemaking will seek comment on using savings from USF reforms to increase digital literacy training at libraries and schools, a key step in increasing broadband adoption.
Build on FCC efforts to close the broadband adoption gap and address digital literacy, including the Connect-to-Compete initiative, which enlists government, non-profit, and private sector leaders to address broadband adoption barriers through digital literacy training and low-cost broadband availability.

The proposal has been met with praise from telecommunications industry groups and some members of Congress, though several consumer watchdog organizations voiced concern over whether there will be enough funding to connect more Americans to the internet. “With only 32 percent of those eligible for Lifeline using the program now, it's at best premature to be seriously considering a cap,” David Honig, president and executive director of the Minority Media and Telecommunications Council. The FCC will vote on the proposal at its January 31 open meeting.

Televised Indecency
On January 8, the New York Times reported on recent research which challenges the conventional wisdom that the Supreme Court led by Chief Justice John G. Roberts Jr is exceptionally supportive of free speech. The research shows the Court is hearing fewer First Amendment cases and is ruling in favor of free speech at a lower rate than any of the courts led by the three previous Chief Justices. The research may perk the interests of people watching this week’s High Court hearing on broadcast indecency. Nine years after Cher used a swear word during a live awards show, the U.S. Supreme Court is finally addressing the constitutional issues behind that question. Both the New York Times and Los Angeles Times argued in editorials that the Court should reject the Federal Communications Commission’s fleeting expletives rule – and recognize that the day is fast approaching when it will have to decide whether the FCC should be in the business of policing indecency at all.

At the hearing, some Justices said they were troubled by inconsistent standards that allowed certain words and displays in some contexts but not in others. Justice Samuel Alito talked about how rapidly technological change has effectively consigned vinyl records and 8-tracks to the scrap heap, suggesting that in a rapidly changing universe, time will take care of the dispute. Already nearly nine of 10 households subscribe to cable or satellite television and viewers can switch among broadcast and other channels with a button on their remote controls. "I'm sure your clients will continue to make billions of dollars on their programs which are transmitted by cable and by satellite and by Internet. But to the extent they are making money from people who are using rabbit ears, that is disappearing," Justice Alito said.

Overall, broadcasters’ efforts to avoid fines for on-air profanity and nudity met resistance with several justices predicting a spike in indecent programming should federal restrictions be eliminated. The Court’s Republican appointees offered support for the FCC’s crackdown on indecent programming. Chief Justice Roberts asked why the government couldn’t reserve a “few channels” to be free from expletives and nudity. Justice Alito voiced concern that programming would become even more indecent if the FCC could no longer fine broadcasters.

Web Domain Name Expansion
On January 12, the Internet Corporation for Assigned Names and Numbers moved forward with plans to open up a new realm of Web addresses in which just about any word—such as dot-furniture or dot-arcticvacations—can serve as a domain name. It is the first time in more than a decade that anyone can apply for the rights to control a slice of the broader Web marketplace, as opposed to just domains for specific types of Internet users. Only a few options, such as dot-jobs for sites catering to job seekers, have been available more recently. Allowing a wider variety of domains to exist will create more choice on the Internet and potentially spur innovation, according to ICANN.

To some, the move spells opportunity. At the Wall Street Journal, it was denounced as A New Challenge for Web Freedom.

On January 9, the Association of National Advertisers proposed that ICANN allow applications starting Jan 12, but that stakeholders concerned about protecting their brands be put on a temporary "Do Not Sell" list at no cost. Since ICANN approved the plan this summer, advertisers have argued the plan would be a financial burden to trademark and brand owners who would need to shell out $185,000 to apply for a TLD (not to mention defensive registration costs and other annual fees), confuse consumers and increase opportunities for fraud, identity theft and cyber crime.

ICANN spent the week addressing various concerns. ICANN President Rod Beckstrom said (also see):

If anyone applied for a top-level domain using a trademark or service mark owned by someone else, the owner could file a complaint to a panel of intellectual property experts, who would decide who had rights to the term.
The change will allow for more international domains in non-English languages, helping to contribute to a globally unified Internet.
ICANN will use tough safe-guards to prevent fraud and trademark-infringement.
Groups will be able to file a complaint against a proposed domain if it is too similar to a trademark they own.
For the first time, ICANN will also have the power to reclaim a domain after it has already launched if it infringes a trademark or confuses consumers.
Some of the greatest interest in the slate of new top-level Internet domain names set to be opened up has come from governments.

SOPA/PIPA Update
It is not often that telecom wonks see the issues they track rise to the level of polarizing campaign issues like same-sex marriage, tax cuts and illegal immigration, but Politico reported this week that hot-button anti-piracy legislation has recently reached that level. The Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) in the Senate have sparked a revolt online and are starting to become a political liability for some of SOPA’s major backers. The bills seeks to shut down foreign websites that steal U.S. copyright material and sell counterfeit goods. Fueled by Web activists and online fundraising tools, challengers are using the bill to tag its congressional supporters as backers of Big Government — and raise campaign cash while they’re at it. Among the fattest targets: SOPA’s lead author, House Judiciary Committee Chairman Lamar Smith (R-TX), and two of its most vocal co-sponsors, Reps. Bob Goodlatte (R-VA) and Marsha Blackburn (R-TN). House Budget Committee Chairman Paul Ryan (R-WI) has also felt the wrath of SOPA opponents. Even GOP presidential contenders Mitt Romney and Rick Santorum were asked by voters recently to weigh in on the bill.

The Hill notes that the debate pits Hollywood and Silicon Valley against each other. Both are influential allies of President Barack Obama. The Administration hasn’t taken a position yet on the legislation that has divided senior lawmakers in both parties, but that will have to change if it clears Congress. If President Obama signs the bill, he will dash the hopes of Silicon Valley executives who donated heavily to his 2008 campaign and are vehemently opposed to the anti-piracy measure. But the entertainment industry would see a veto as a betrayal by the Administration on its most significant priority.

Opposition to the bills are led in Congress by Sen Ron Wyden (D-OR) and Rep Darrell Issa (R-CA). They were at the Consumer Electronics Show in Las Vegas this week outlining their strategy are pushing a bill called the Online Protection and Enforcement of Digital Trade Act (OPEN), which would use the International Trade Commission to shut off the funds that support the infringing websites. Issa, Wyden and the tech community know they're in for a tough fight that's shaping up to be one of the biggest fights in Washington.

"I am not underestimating what a tough lift this is," said Sen Wyden, who put a hold on PIPA last year. "My goal for 2011 was to keep PIPA off the floor so we would have a chance to go to the country. I'm not going to pretend this is a walk in the park. We're up against the toughest, savviest lobbying folks."

Early in the week, House Oversight Chairman Issa announced a Jan. 18 hearing on the potential impact of Domain Name Service (DNS) and search engine blocking on the Internet, escalating the feud within the Republican Party over SOPA. Chairman Issa has been a harsh critic of SOPA, banding together with fellow Judiciary Committee members Reps. Zoe Lofgren (D-CA), Jared Polis (D-CO) and Jason Chaffetz (R-Utah) to successfully stall a two-day marathon December markup by endlessly debating a slew of amendments to the legislation.

PIPA sponsor and Judiciary Committee Chairman Patrick Leahy (D-VT) said he is preparing a manager’s amendment to the Protect IP Act (S.968) that will take concerns about the bill’s possible effect on Internet service providers under consideration. "As I prepare a managers’ amendment to be considered during the floor debate, I will therefore propose that the positive and negative effects of this provision be studied before implemented, so that we can focus on the other important provisions in this bill, which are essential to protecting American intellectual property online, and the American jobs that are tied to intellectual property," Chairman Leahy said.

A cloture vote, which would move the bill to floor debate and allow Chairman Leahy to propose the amendment, is expected when the Senate resumes on Jan 17.

Meanwhile, in the House, Rep Lamar Smith (R-TX), a SOPA sponsor and Chairman of the Judiciary Committee, vowed to press ahead in the face of fierce criticism from Internet giants such as Google and Facebook. "It is amazing to me that the opponents apparently don't want to protect American consumers and businesses," he said. "Are they somehow benefitting by directing customers to these foreign websites? Do they profit from selling advertising to these foreign websites? And if they do, they need to be stopped. And I don't mind taking that on."

Chairman Smith says giving Washington sweeping powers over the Internet is necessary to protect free enterprise. Chairman Smith predicted the bill would pass the House. It was about halfway through the process of committee hearings and could go to the House floor in a matter a weeks, he said.

Chairman Smith is feeling some pressure from home, however. Technology companies and business advocates in Texas agree that cyber crimes are a problem, but they contend that Smith’s bill would cause greater economic damage, particularly to Texas’ growing technology sector. And they say that online pirates could find ways to evade the law. Rackspace, Facebook and eBay, which have received economic incentives from the state to create jobs in Texas, are among the companies opposing the bill.

The developments on these two bills are likely to be one of the most-watched issues as Congress returns to Washington.

Note: Since publication, the debate on piracy has kicked into overdrive. See --

• White House statement: Combating Online Piracy while Protecting an Open and Innovative Internet
• In the House: Controversial online piracy bill shelved until 'consensus' is found and Controversial provision to block websites dropped from online piracy bill
• In the Senate: Senate Majority Leader Reid pushes online piracy bill despite White House concerns while Senate Judiciary Republicans Call For Delay On Anti-Piracy Vote