Benton Foundation

[Commentary] Maximizing the benefit of each dollar spent on telecommunications services for schools and libraries and minimizing the contribution burden on consumers and businesses is a major goal adopted by the Federal Communications Commission in its July 2014 E-rate order. The FCC is aiming to drive down costs for the services and equipment needed to deliver high-speed broadband connectivity to and within schools and libraries. The FCC changed E-rate rules to increase pricing transparency, encourage consortium purchasing and amend its lowest corresponding price (LCP) rule to clarify that potential service providers must offer eligible schools, libraries and consortia the LCP.

[Commentary] It is easy to conflate peering and paid prioritization. Recently, Sen. Patrick Leahy (D-VT) and Rep. Doris Matsui (D-CT) introduced bills in both chambers of Congress to ban so-called paid prioritization.

Coverage by the New York Times pointed out that the bills ban “deals similar to the recent agreement that allows Netflix to connect directly to Comcast’s system to avoid network congestion.” However, that is not strictly true. The proposed Online Competition and Consumer Choice Act of 2014 (S. 2476 and H.R. 4880) prohibits “paid prioritization” as understood in the Federal Communications Commission’s conventional discourse on net neutrality. The bills do not explicitly deal with interconnection, or peering arrangements such as the Netflix-Comcast deal.

Similarly, in its Open Internet rules, the FCC has so far focused on regulating the potential harms of last-mile paid prioritization rather than that of paid peering/ interconnection. As the FCC reviews the recent flood of net neutrality comments, regulators should be mindful of rhetoric-masked, bad arguments that overlook the nuances between the two.

In this the first of a series of articles looking at the order, we examine the Federal Communications Commission’s efforts to bring Internet connectivity both to the building and to devices within schools and libraries.

[Commentary] Chattanooga (TN) and Wilson (NC) simultaneously petitioned the FCC to pre-empt laws in their states that ban the cities from expanding their high-speed Internet networks. The petitions are a move to lift all statewide bans on municipal broadband networks. More than 130 cities operate their own Internet networks, according to the Institute for Local Self-Reliance while some 21 states restrict such networks.

The state laws restricting municipal broadband have been backed, and sometimes written, by telecommunications companies led by AT&T, Time Warner Cable, Verizon Communications and Comcast. They argue it is unfair for them to compete with government, which doesn’t have to make a profit or pay taxes.

You may well have read about the Federal Communications Commission’s vote last August to cap rates for interstate phone calls placed by prison inmates. Understandably, most of the coverage of this controversy has focused upon what the FCC did, rather than the legal underpinnings of its actions. This post will address some of those legal questions.

[Commentary] Public comments are due regarding the Federal Communication Commission’s (FCC) proposed rules for network neutrality.

Much of the focus will be on arcane legalisms, the particulars of various court decisions, and the confounding twists and turns of FCC regulatory oversight (or lack thereof). This is all well and good, and based on more than a decade tracking such minutiae as a member of the FCC, I am confident that those of us favoring a real Open Internet will have much the better detailed arguments to put forward.

But it’s more -- much more -- than that.

[Copps served as a commissioner on the Federal Communications Commission from May 2001 to December 2011 and was the FCC's Acting Chairman from January to June 2009]

[Commentary] On July 2, the Privacy and Civil Liberties Oversight Board released a detailed analysis of U.S. surveillance programs. The headline-grabbing conclusion of the research is that a set of National Security Agency programs that collect vast amounts of Internet communications from U.S. companies has proved to be an effective intelligence tool, but that some aspects bordered on unconstitutionality. The board said that the NSA programs need better safeguards for protecting Americans' communications scooped up in the process. One of the goals of the board in writing the report has been to increase transparency about U.S. surveillance. In addition to this effort to explain the program, the board has set forth a series of policy recommendations designed to ensure that the program appropriately balances national security concerns with privacy and civil liberties. As you pack up for July 4 weekend, we thought we’d take a closer look at what the Privacy and Civil Liberties Oversight Board is and what it found out about the NSA.

[Commentary] The Supreme Court of the United States (SCOTUS) released two big communications-related decisions on June 25. First, the Court unanimously ruled that the police need warrants to search the cellphones of people they arrest. That ruling will have the most immediate impact on the approximately 12 million people -- yes, 12,000,000 -- who are arrested in the US each year. But its impact will most likely be much broader: the ruling almost certainly also applies to searches of tablet and laptop computers, and its reasoning may apply to searches of homes and businesses and of information held by third parties like phone companies. In the second case of note, SCOTUS ruled that Aereo, a television streaming service, had violated copyright laws by capturing broadcast signals on miniature antennas and delivering them to subscribers for a fee. The ruling blocks a company whose goals were to upend long-standing models for how broadcast programming is delivered to consumers. The 6 to 3 decision handed a major victory to the broadcast networks, which argued that Aereo’s business model was no more than a high-tech approach for stealing their content.

After the Supreme Court released its 6-3 decision in American Broadcasting Companies v. Aereo, wonkland responded.

National Association of Broadcasters President and CEO Gordon Smith said, “NAB is pleased the Supreme Court has upheld the concept of copyright protection that is enshrined in the Constitution by standing with free and local television. Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false. Broadcasters embrace innovation every day, as evidenced by our leadership in HDTV, social media, mobile apps, user-generated content, along with network TV backed ventures like Hulu. Television broadcasters will always welcome partnerships with companies who respect copyright law. Today's decision sends an unmistakable message that businesses built on the theft of copyrighted material will not be tolerated.”

Aereo CEO and Founder Chet Kanojia said, “Today’s decision by the United States Supreme Court is a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ That begs the question: Are we moving towards a permission-based system for technology innovation?”

“While the court ruled that Aereo had overstepped, invention and innovation are at the heart of America’s global leadership in communications and technology development,” said House Commerce Committee Chairman Fred Upton (R-MI). “This case underscores the mounting need to modernize the 80-year-old Communications Act, which serves as an important, yet outdated, framework for the communications industry. We will continue laying the groundwork toward a #CommActUpdate to bring our laws into the innovation era so that the United States can continue leading the world in developing groundbreaking technologies that drive job creation and support consumer choice, economic growth, and social discourse.”
“The Court’s decision reminds us that the complex communications and technology marketplace is constantly innovating and rapidly changing, and that nuances in the law can have a profound effect on content providers and consumers,” added House Communications and Technology Subcommittee Chairman Greg Walden (R-OR). “Providing consumers with a vibrant and innovative content delivery system in the 21st century is an important objective of our #CommActUpdate. In that effort, we will carefully balance the competing marketplace interests to make sure that this industry continues to innovate, localism is preserved, and consumers ultimately come out on top.”
“The ABC v. Aereo case highlights the regulatory uncertainty that exists in the rapidly evolving video marketplace as a result of our country's outdated communications laws,” said House Communications and Technology Subcommittee Vice Chairman Bob Latta (R-OH). “I look forward to working with Chairmen Upton and Walden in engaging in a comprehensive review of the Communications Act to ensure our policies foster robust investment and innovation in the 21st century digital economy.”

“21st Century Fox welcomes the US Supreme Court’s ruling, a decision that ultimately is a win for consumers that affirms important copyright protections and ensures that real innovation in over-the-top video will continue to support what is already a vibrant and growing television landscape," said Fox.

“We are gratified that the Court’s decision adopted a sensible middle ground, holding that unlicensed retransmission services like Aereo violate the copyright law, while protecting consumer-friendly, cloud-based technologies, such as RS-DVR. The real winner today is the consumer who will continue to benefit from future innovation," Cablevision said.

“Aereo was using technology, in this case thousands of dime-sized antennas, in a blatant attempt to circumvent copyright law and to profit from broadcasters’ content without compensating them," said Media Institute President Patrick Maines. The instituted had filed an amicus brief in support of broadcasters. "The Supreme Court has struck a strong blow in support of our copyright system. The Court has affirmed that technological schemes cannot be used as loopholes to avoid paying for copyrighted content.”

SAG-AFTRA was applauding the protection of its members’ content and business model. "[T]he US Supreme Court’s decision in the Aereo case... sends a clear and strong message that the Court will not permit companies like Aereo to use inconsequential technical workarounds to evade Congress’ intent to protect content creators and owners in the Copyright Act," the union said. "By adopting a practical analysis that recognizes the extraordinary similarity between Aereo and the cable systems Congress expressly regulated in the Act, the Court rightly focuses on the use of copyrighted works and refused to be sidetracked by the inconsequential technical details with which Aereo attempted to cloak itself. But in doing so, the Court properly limited the scope of the decision so that cloud services and other technological innovations are neither inhibited nor limited. This decision gives the creative community greater confidence that copyright law cannot be so simply evaded and restores the proper balance to the system.

“We are disappointed that the Supreme Court today ruled against innovator Aereo," said Consumer Electronics Association President Gary Shapiro, "but are pleased the Court said it favored future innovation and specifically referred to the Sony Betamax principles of fair use as a safety valve for new services and technologies. We especially appreciate Justice Scalia’s powerful dissent describing how innovation is often opposed by incumbents who make false, ‘the sky is falling’ predictions about the future."

"It is very unfortunate for consumers that the Supreme Court has ruled against Aereo, which has provided an innovative service that brings consumers more choices, more control over their programming, and lower prices,” said Public Knowledge President and CEO Gene Kimmelman. "We're concerned that the court's misreading of the law leaves consumers beholden to dominant entertainment and cable companies that constantly raise prices and gouge consumers. This decision, endangering a competitive choice for consumers, makes it all the more important for the Department of Justice and Federal Communications Commission to guard against anti-competitive consolidation, such as the Comcast/Time Warner Cable merger.”

“We’re disappointed that the Supreme Court has ruled to make it harder for consumers to access and watch broadcast television when and where they want," said Ellen Bloom, senior director of federal policy for Consumers Union. "We think Aereo was on to something by filling a need for low cost, flexible viewing options. As cable prices keep skyrocketing, the consumer demand will continue to grow for more personalized, affordable ways to watch television."

“We are greatly disappointed with today’s Aereo ruling and we believe that the majority’s opinion failed to reflect the reality of today’s media landscape," said Parents Television Council President Tim Winter. "This is a ruling for the status quo that hurts consumers. Aereo had the potential to break up the bundled-channel cable TV model that is forcing Americans to pay higher cable bills year after year for channels they don’t want or don’t watch."

[Commentary] Sisyphus, you may recall from high school days, was sentenced to an eternity of rolling a boulder uphill only to watch it roll back down. Section 202(h) of the 1996 Telecommunications Act gave the Federal Communications Commission the Sisyphean task of reviewing all of its broadcast ownership rules every two years (later extended to four) and determining whether each of them continue to be "necessary in the public interest."

On April 15, the FCC voted to start the latest Section 202(h) proceeding by issuing an order initiating the 2014 Quadrennial Review. Even though the FCC has attempted to wrap the last Quadrennial Review into the new one, the Commission has already been hauled into court, and more judicial proceedings will take place even as the FCC receives and considers comments from interested parties.

From a public interest perspective, there are positive and negative aspects to what the FCC did, and didn’t do, in starting the 2014 Quadrennial Review. This post focuses on those aspects of the FCC’s action and related matters along the way.

The most complicated part of all this is just beginning. Whenever the FCC does anything important, somebody takes it to court. Three appeals (technically, they are “petitions for review”) have been filed with respect to the April 15 decision in the District of Columbia. Once it is finally determined which court or courts will hear the appeals, briefs will be filed, probably by early fall.

Then there will be an oral argument, perhaps by the end of the year or early next year. Meanwhile, the FCC will be accepting comments on the 2014 Quadrennial Review, with a decision also likely early 2015. Then, depending on what has already happened in the courts, everyone will appeal that decision. After that, everyone can look forward to the 2018 Quadrennial Review, when it starts all over again.