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FCC Gridlock, FTC’s Investigating Amazon-MGM, Brendan Carr’s USF Proposal Raises Questions

FCC gridlock could hobble president’s wishes, FTC opens investigation into Amazon buy, law professor raises questions about Carr’s USF proposal.

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FTC Chairwoman Lina Khan

July 12, 2021—Observers say the Federal Communications Commission won’t be able to implement some of President Joe Biden’s wishes – including his urging Friday for the agency to restore pre-Donald Trump net neutrality rules – because the White House still has yet to nominate a fifth, tie-breaking commissioner to the FCC.

For months, advocacy groups have been urging the president to nominate a third Democrat to the commission, and it’s unclear what’s causing the delay. Observers note that the FCC could struggle

Considering it can take months for the Senate to approve FCC nominations – and because the FCC is deadlocked with two Democrat and two Republican commissioners – some say that Biden’s delay in appointing the next commissioner could come at the cost of losing FCC direction for the 2021 year, as the stalemate brings the commission into gridlock.

On Friday, Biden urged the agency to commit to going back to former President Barack Obama-era net neutrality principles, which would bar telecommunications companies from influencing the traffic over their networks. California has already instituted it own net neutrality rules, which AT&T said forced the company to remove free app services.

Biden also asked the FCC to take steps to boost price transparency and competition in broadband.

The order encourages the FCC to “prevent ISPs from making deals with landlords that limit tenants’ choices.” While the FCC bans exclusive agreements for telecom services to apartment buildings, the problem has not been rooted out nationwide.

Federal Trade Commission opens formal investigation into Amazon’s MGM buy

The Federal Trade Commission officially opened a formal investigation into Amazon’s acquisition of major entertainment studio, MGM, the Information reported on Friday.

Amazon announced its deal to acquire MGM for $8.45 billion in late May, but it was largely suspected that the merger would receive scrutiny from government agencies. In June, Senator Elizabeth Warren, D-Massachusetts, urged the agency to give the deal a “meticulous” review in a letter addressed to FTC Chairwoman Lina Khan.

The FTC is focused on “the larger implications of the deal for Amazon’s market power,” the Verge reported, citing the Information’s report, itself based on two anonymous sources. “The FTC is wary of whether the deal will illegally boost Amazon’s ability to offer a wide array of good and services and is not just limited to content production and distribution.”

Khan is a longstanding critic of Big Tech, specifically Amazon, and published an article titled “Amazon’s Antitrust Paradox” in the Yale Law Journal in 2017. Her ideas are popular among progressive circles seeking to reign in Big Tech’s power, but her special interest in Amazon has led the company to file a recusal motion, calling for her to remove herself from proceedings involving Amazon.

Op-ed raises questions for Universal Service Fund reform

Justin Hurwitz, a law professor at the Nebraska College of Law, said in an op-ed published Friday on the Free State Foundation website that he supports reforming the Universal Service Fund by forcing big technology companies to contribute to it, but key concerns need to be addressed before that can happen.

Hurwitz was using as his springboard FCC Commission Brendan Carr’s proposal, written in a Newsweek op-ed in May, calling for Big Tech to contribute to the fund, which brings basic telecommunications service to underserved institutions and communities across the country. The fund currently relies on voice revenues – the portion of telecom company revenues that has been consistently dwindling, which has brought into focus the fund’s sustainability.

While he called Carr’s proposal “unequivocally better than the status quo,” he said Congress – not the FCC – must first define what constitutes “Big Tech” and who, exactly, needs to contribute to the fund before such a reform can take place.

For example, considering how many online readers the New York Times pulls, he questions whether they would be defined as “Big Tech” for the purposes of contributing to the fund. If not the New York Times, he asks, what about Amazon? Why should Amazon be required, but not the New York Times?

Hurwitz noted that allowing the FCC to decide those questions could give them strong regulating power in non-communications-based markets, adding future regulation and a restructuring of the USF should be left to Congress, where it is more democratically responsible to the people than is the FCC.

Reporter Tyler Perkins studied rhetoric and English literature, and also economics and mathematics, at the University of Utah. Although he grew up in and never left the West (both Oregon and Utah) until recently, he intends to study law and build a career on the East Coast. In his free time, he enjoys reading excellent literature and playing poor golf.

Broadband Roundup

House Passes Ban on Chinese Equipment, 3.45 GHz Auction Reaches Reserve Price, Against a ‘Wi-Fi Tax’

Bipartisan Senate bill clears the House, FCC auction prices climb higher, tech groups oppose newly proposed fee

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Sen. Marco Rubio, R-Florids

October 22, 2021—The House of Representatives passed the Secure Equipment Act of 2021 on Wednesday, with a goal of mitigating perceived national security threats from equipment manufacturers, particularly Chinese companies.

The bill would require the Federal Communications Commission issue rules prohibiting new equipment licenses to potentially dangerous companies on the agency’s “Covered Equipment or Services List.”

Sens. Ed Markey, D-Mass., and Marco Rubio, R-Fla., initially introduced the act before its passage in the Senate. The House version of the bill was introduced by Reps. Anna Eshoo, D-Calif., and Steve Scalise, R-Louisiana.

Chinese state-backed firms Huawei and ZTE are among the companies included in the FCC’s list of technology companies that the agency has deemed a national security threat. The agency was required by the Secure and Trusted Communications Networks Act of 2019 to detail which companies it believes to pose a severe threat to U.S. safety.

The new measure would make it impossible for U.S. telecommunications carriers to continue using equipment from companies deemed threats by the FCC if that equipment was purchased with private or non-federal government dollars. That practice was previously allowed, even those using such equipment with federal funds had already been effectively banned.

FCC 3.45 GHz auction proceeds reach reserve price

The 3.45 GHz auction at the FCC hit the agency’s reserve price of $14.77 billion Wednesday.

Many doubts existed about whether the auction would not hit the reserve price and become the first to do so in the FCC’s history.

Should this auction follow the same progression as this year’s C Band auction, it is possible proceeds could reach $20 billion. Current proceeds total $16.43 billion.

Success of the auction would come as a large relief to AT&T, which is projected to be the auction’s largest spender ahead of T-Mobile and Dish.

Analysts at New Street Research stated that they believe it is likely that the auction will meet the reserve price and that the actions of the Department of Defense will serve as a strong indicator of the auction’s success because it uses the mid-band spectrum that is most sought after by carriers.

CCIA opposes a proposed ‘Wi-Fi tax’

The Computer & Communications Industry Association on Thursday in submitting comments to the FCC on Thursday in opposition to a proposal that would charge regulatory fees to users of unlicensed spectrum.

The CCIA was joined in its opposition by the Internet Association, Digital Media Association and Incompas.

The organizations said that the FCC’s proposed fees would “effectively result in something like a Wi-Fi tax.”

CCIA said that the proposal would be “unworkable to implement” and that it exceeds the legal authority and mission of the FCC. Further, they state it would also harm innovators who use unlicensed spectrum to create services for consumers.

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Broadband Roundup

‘Squid Game’ Exposes Traffic Problem, Virginia’s $2B Broadband Investment, West Virginia Mapping

Netflix hit’s traffic struggle, Virginia expects $2B from P3, op-ed says FCC expects states to get good maps before FCC.

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Netflix CEO Reed Hastings

October 20, 2021––A South Korean broadband company is suing Netflix to cover the cost of the surge in traffic from its hit television show “Squid Game.”

The show, which according to Netflix has more than 100 million streams, became a global hit last month.

The Financial Times reports that SK Broadband, owned by SK Telecom, South Korea’s largest mobile operator, argues that streaming platforms should pay for the congestion on its networks.

The company said that the traffic Netflix generated on its network increased to 1.2 trillion bits of data processing per second since September, an increase that’s equal to 24 times the company’s normal traffic over three years. The company said its network had to be upgraded twice to accommodate the traffic surge caused by customers streaming the show on Netflix.

Local law in South Korea requires the companies with more than 1 million users and using more than 1 percent of total network traffic to pay internet fees to distribute the maintenance costs incurred by broadband providers.

Netflix accounted for almost 5 percent of internet traffic in the fourth quarter and had more than 1.7 million paid subscribers. SK Broadband argues that Netflix must pay more in network usage fees.

Virginia announces $2 billion public-private broadband partnership

Virginia Governor Ralph Northam said Tuesday that the state expects more than $2 billion in funding for high-speed broadband investments after announcing a public-private partnership with local governments and private internet service providers, according to the Richmond Times-Dispatch.

Northam announced that the state received requests to fund 57 projects to expand broadband across 84 localities across Virginia, totaling $943 million in grants. It would be matched by $1.15 billion in private and local government funds.

“Broadband is as critical today as electricity was in the last century,” said Northam. “Making sure more Virginians can get access to it has been a priority since I took office, and the pandemic has pushed us all to move even faster.

“Virginia is now on track to achieve universal broadband by [2024], which means more connections, more investments, more online learning and expanded telehealth options, especially in rural Virginia,” he said.

Northam and the Virginia general assembly appropriate $700 million of the $4.3 billion that Virginia received under the federal emergency aid package to accelerate Virginia’s universal broadband coverage goal. The expected completion has been moved up from 2028 to 2024.

The plan is expected to bring internet access to more than 250,000 homes and businesses.

The state is using federal emergency aid from the American Rescue Plan Act to close the digital divide in Virginia.

Op-Ed: West Virginia being asked to produce quality broadband maps before FCC

Advocates for more accurate maps say that the federal government is hypocritical in asking West Virginia for more accurate maps than the Federal Communications Commission can produce.

“The state is being asked to produce accurate maps, which the federal government knows full well its own agency did not produce” for the state the invest millions of dollars in federal American Rescue Plan funding for broadband expansion, writes a Wednesday op-ed in the Weirton Daily Times.

The FCC has been under fire for flaws in its broadband mapping data, which was relied upon to produce winners for the Rural Digital Opportunity Fund, which forced the commission to clean-up the result of the reverse auction after finding that some of the money would go toward wasteful spending.

West Virginia’s effort to expand broadband is led by the state Department of Economic Development. State Economic Development Secretary Mitch Carmichael said that if self-reported maps show no service in an area “you can bet your life there’s no service there.”

“There’s a lot more at stake as the department works to get these maps right. It is no exaggeration to say that the future of education and employment in West Virginia is riding on it,” said the Times. “Good luck, then, to Carmichael and his department as they work to clean up yet another federal government mess that has left the Mountain State struggling for too long.”

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Broadband Roundup

New Senate Antitrust Bill Reaction, Charter Making Executive Changes, T-Mobile, Verizon Top Charts

Trade association doesn’t like new antitrust bill, Charter makes changes at the top, T-Mobile leads wireless, Verizon on wireline.

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Chuck Grassley, R-Iowa.

October 19, 2021 – A Senate antitrust bill introduced Monday that would empower the Federal Trade Commission to further regulate technology companies will harm start ups and small business, according to the Consumer Technology Association.

The trade association, which represents companies across the tech sector, said the American Innovation and Consumer Choice Act – introduced by Sens. Amy Klobuchar, D-Minnesota, and Chuck Grassley, R-Iowa – will “cause irreparable harm to small businesses and startups and put U.S. companies at a competitive disadvantage against China and other nations eager to overtake our country as global tech leader.”

The bill would prohibit “dominant platforms” from favoring their own products and services to the detriment of competition, stop conduct that is harmful to small businesses including preventing interoperability with big platforms, requiring payment to receive preferential treatment on the big platform, bias search results, and misuse business data to compete against the small companies.

Amazon, for example, was accused of having taken the information of products of smaller companies on its platforms to create their own competing products.

According to the release, the bill received the support of at least 10 other Senators across party lines and companies including Spotify and Roku.

But the CCA said the bill, in empowering the FTC, would allow it to “ignore the consumer welfare standard, while imposing massive fines with minimal due process.

“Further, the bill will take away features and functions that millions of Americans love and use in their everyday lives,” the CCA statement said. “Say goodbye to Amazon Prime free shipping, Google maps in search results, preinstalled iPhone apps and many more.”

The House already has before it six antitrust bills that are awaiting votes.

Charter makes executive changes

Charter announced Tuesday that it is promoting chief financial officer Chris Winfrey to chief operating officer and Jessica Fischer will move from executive vice president to the COO position.

John Bickham will be vice chairman before he retired at the end of 2022, the company also announced in a press release, while chief product and technology officer Rich DiGeronimo will oversee the company’s network operations as an additional responsibility.

“I have worked with John for three decades and at every turn, his knowledge, leadership and steady hand have not only contributed greatly to the success of the companies we led, but made a profound impact on the growth of our industry,” said CEO Tom Rutledge. “I am grateful that John will continue to serve Charter in this new capacity as a strategic advisor to me and the executive team, and his guidance will help ensure a successful transition for Chris into the COO role.”

T-Mobile gets top billing for wireless, Verizon for wireline

According to an Ookla report Monday, T-Mobile ranked as the fastest mobile operator in the country in the third quarter with a median download speed of 62.35 Megabits per second, as Verizon took home the top rank for wireline download speeds at 178.38 Mbps.

For wireless, AT&T was second in speed at 47.42 Mbps, followed by Verizon at 39.91 Mbps. T-Mobile also ranked first in 5G performance with a median speed of 135.17 Mbps, followed by Verizon at 78.94 Mbps and then AT&T at 72.46 Mbps. T-Mobile was also top in 5G availability with 64.4 percent, with AT&T second at 44.8 percent and Verizon third at 34.3 percent.

T-Mobile completed its merger with Sprint last year. It proposed that the combined entity was the only way the companies could compete against the top players and offer a competitive 5G product.

On the wireline side, Cox was second to Verizon on download speed at 168.56 Mbps, followed by Comcast’s Xfinity at 161.87 percent, Spectrum fourth at 143.57 Mbps, AT&T Internet at 132.48 Mbps, and CenturyLink at 59.80 Mbps.

New Jersey had the fastest median download speed on wireline at 158.19 Mbps, followed by New York at 147.46 Mbps, California at 142.56 Mbps, Florida at 141.88 Mbps, and Texas at 140.15 Mbps.

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