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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

Space Bills Get Markup, Cybersecurity Reserve Bills Introduced, Gigabit Center Opens in Crown Heights, NY

The Secure Space Act and the Satellite and Telecommunications Streamlining Act are scheduled for mark-up on Thursday.

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Photo of Cathy McMorris Rodgers in 2015 by Gage Skidmore

March 23, 2023 – The House Energy and Commerce Committee will host a mark-up meeting on Thursday to consider pieces of legislation that will “keep America at the forefront of next-generation communications technology,” according to a press release.

The Secure Space Act and the Satellite and Telecommunications Streamlining Act introduced by Chairman Frank Pallone, Jr., D-N.J., and Ranking Member Cathy McMorris Rodgers, R-Wash. in December last year will be among those going through the line-by-line process on Thursday.

The Secure Space Act prohibits the Federal Communications Commission from issuing satellite licenses or other related authorizations to untrusted actors, based on the framework adopted in the Secure and Trusted Communications Networks Act.

The Satellite and Telecommunications Streamlining Act clarifies FCC authority with the goal of promoting responsible use of space, incentivizing investment and innovation, and advancing U.S. leadership.

“America is leading the way in next-generation satellite technologies, which are contributing to a revolution in the communications marketplace,” the representatives said in a statement. “To make sure the U.S. – not China – continues to lead this global industry, we must streamline our regulatory processes to unleash innovation while also ensuring our laws fully protect the American public.”

Bills to ensure cybersecurity reserves in government introduced

Two bills introduced Tuesday by Sens. Jacky Rosen, D-Nev., and Marsha Blackburn, R-Tenn., would establish pilot programs that would hire civilian cybersecurity personnel in reserve to “ensure the U.S. government has the talent needed to defeat, deter, or respond to malicious cyber activity, especially at times of greatest need.”

The bills, some versions of which were previously introduced but did not pass, would establish the Civilian Cybersecurity Reserve pilot programs within the Department of Defense and the Department of Homeland Security.

“Cybersecurity threats targeting the United States continue to grow in scale and scope, demonstrating the urgent need for robust civilian cyber reserves capable of addressing these threats and protecting our nation,”  Rosen said in a press release on Tuesday“Our bipartisan legislation will help ensure the U.S. government can leverage existing cybersecurity talent from the private sector to help our nation deter and swiftly respond to cyberattacks.”

The bills comes at a time when federal agencies are “experiencing a growing shortage of cybersecurity talent,” the release said.

“As the cyber domain continues to expand in size and complexity, so should our cyber workforce,” Blackburn said. “By creating a reserve corps similar to our National Guard or Army Reserve, we can ensure the U.S. has qualified, capable, and service-oriented American talent that is necessary to address cyber vulnerabilities and keep our nation secure.”

Gigabit Center to provide free internet to students in Crown Heights, NY

The Brooklyn Gigabit Center, which will provide free internet resources for students, opened in Crown Heights, New York on Wednesday.

The center will provide free high-speed Wi-Fi, technology, education and school supplies to Crown Height, New York, an area where 36 percent of households lack broadband, according to the press release.

The center opened with a press conference hosted by the administration of Mayor Eric Adams, LinkNYC, the New York City Office of Technology and Innovation, digital infrastructure company ZenFi Networks, and tech education non-profit Digital Girl, according to a ZenFi Networks press release.

ZenFi Networks has previously opened centers in the Bronx, Manhattan, and Queens to help the local communities to learn and adopt to modern technologies.

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Broadband Roundup

DOJ Investigates TikTok, Google’s Generative AI Tool, Charter Counsel Retiring

An internal TikTok investigation found employees had allegedly spied on journalists, the Times reported.

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Photo of Sundar Pichai from 2021 by World Economic Forum used with permission

March 21 – Federal authorities are investigating Chinese-owned video sharing app TikTok over allegations its spying over journalists, reported The New York Times on Friday.

Three people familiar with the case told the Times that the Department of Justice has been investigating the company ByteDance after internal emails showed the company had conducted an internal investigation and “found employees gained access to data from two journalists and people associated with them,” the Times said.

According to the Times, a spokesperson said the company “strongly” condemns the actions of the four employees who obtained the data on the journalists and are no longer working for the company.

The investigation comes during a time Washington and state governments are on heightened alert of the app they say is a national security risk. A new memorandum by the White House’s Office of Management and Budget published in February outlines how agencies are to identify and ban problematic software, like TikTok, from government devices and networks.

Senators have also introduced the RESTRICT Act to further strength national cybersecurity by empowering the Department of Commerce to examine critical infrastructure products and ensure “comprehensive actions to address risks of untrusted foreign information communications and technology products.”

Google releases new Bard generative AI tool for trialing  

Google has released an artificial intelligence tool intended to assist users in daily tasks, the search engine giant’s attempt to enter the generative AI space shared by the popular ChatGPT application.

Called Bard, the tool allows users to use the generative AI software as a personal assistant to ask the machine to come up with ways to accomplish tasks. The tool presents a chat box that the user inputs questions into, with the “large language model” generating tips automatically.

Google said the machine is in “experiment” mode and is asking users to contribute to its refinement.

Bard comes a week after OpenAI, the company behind generative AI tool ChatGPT, announced the latest version of the tool that has been able to craft novels using basic prompts. In the latest version, the tool has been able to create websites and versions of 2D video games.

Its power has concerned lawmakers and has sparked calls by experts for its regulation.

Aleksander Mądry, professor of Cadence Design Systems at the Massachusetts Institute of Technology, said in a recent subcommittee hearing that generative AI is a very fast moving technology, meaning the government needs to step in to confirm the objectives of the companies and whether the algorithms match the societal benefits and values.

In January, ChatGPT eclipsed 100 million monthly users.

Charter’s executive vice president is retiring

Richard Dykhouse, executive vice president, general counsel and corporate secretary of Charter Communications, is set to retire from his position, but will remain until the company picks a successor, the cable company announced Monday.

“Rick has played a significant role in Charter’s transformation and growth story – including its reorganization in 2009, the acquisitions of Time Warner Cable and Bright House Networks, and the largest-ever integration of cable companies,” Chris Winfrey, Charter’s president and chief executive officer, in a press release. “I am grateful for Rick’s leadership, advice and sound judgment over the years and pleased that he will continue to assist us throughout the transition to his successor.”

Once the company finds the right person, Dykhouse will remain as executive counsel to support the transition, the release said.

Dykhouse joined Charter in 2006.

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Broadband Roundup

Sohn Speaks After Withdrawal, MasterCard Back Indigenous Connectivity, Liberty-CityFibre in Buy Talks

The former FCC nominee spoke for the first time regarding future plans after withdraw.

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Photo of Gigi Sohn from 2012 by Joel Sage used with permission

March 20, 2023 – Former Federal Communications Commission nominee Gigi Sohn told The Washington Post in an interview published last week that she feels she “got a book to write” about her 16-month-long battle to get the Senate to vote her onto the commission.

Earlier this month, the two-time nominee of President Joe Biden withdrew her candidacy after what she called “dark money political groups” tainting her career. Sohn has been accused by Republicans of being impartial and donating to members of the Commerce committee that had previously pushed her nomination forward but which did not get to Senate votes.

“There’s been a bunch of stuff that’s happened over the past 16 months … that is going to make people’s eyes bug out,” Sohn told the Post.

During Sohn’s confirming process, she said she has been repeatedly subject to “unrelenting, dishonest and cruel attacks” from extremist groups and media.

“That was the first time I felt like ‘Oh my god, this could really rile up some crazies to come to my house … and threaten me and my family,’” the Post said she said. “I owed a duty to me and my family to move on, and this was very, very difficult on me emotionally.”

Sohn said she was “very proud” of the support she received from allies throughout the process, the Post said.

Sohn told the Post she had “several opportunities” lined up, which might be the intent to advocate internet access at the state level. But she also said she could do “something bigger and more,” according to the Post.

Mastercard Foundation partners with indigenous institute for internet access

The Mastercard Foundation announced Monday it is investing $3.7 million CAD, or $2.7 million USD, to help the Indigenous Connectivity Institute expand its current digital equity program.

The funding will “enable the ICI to expand current programs and develop new initiatives to reach 10,000 Indigenous young people over the next three years,” according to the release.

“This support from the Mastercard Foundation has the potential to advance Indigenous digital equity beyond our imaginations and make real the projects and collaboration we’ve been dreaming up for years. I am so excited to see this new partnership in action,” Darrah Blackwater, ICI Advisory Council member, said in a press release.

The indigenous-led organization is focused exclusively on digital equity in Canada and the United States by providing training programs to advance technical and advocacy skills, the release said.

“A fast, reliable internet connection is essential to ensuring that Indigenous young people can access high-quality education and meaningful employment opportunities,” says Jennifer Brennan, Director of Canada Programs at the Mastercard Foundation. “The shared vision for this partnership is a commitment to ensuring Indigenous young people and communities have the capacity, support, knowledge, and financial resources to lead digital equity to advance their aspirations and strengthen their communities.”

State broadband leaders will join Broadband Breakfast’s online event and talk about how their states are approaching the digital equity planning process and what they hope to accomplish with federal funding on Wednesday April 15 at 12 noon ET.

Liberty Global acquisition of Cityfibre and Liberty Global unlikely to be approved

Virgin Media O2 is seeking to acquire fiber competitor CityFibre for £3 billion, according to media reports.

The Telegraph reported Saturday that Virgin is in talks with the competitor, but questions remained about the likelihood of the deal moving past regulators.

Capacity reported Monday that equity analyst Jerry Dellis from Jefferies Equity Research does not believe it will get past the Competition and Markets Authority.

“A VMO2-CityFibre combination would appear to threaten the regulatory objective of network competition providing choice for ISPs, leading to better outcomes for consumers,” a Dellis research note said, according to Capacity.

“With a back-book comprising millions of customers that have been subject to multiple years of retail price increases, we question what incentive VMO2 has to compete down wholesale pricing.”

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