Trump Administration Pledges to Veto Net Neutrality Bill

As expected, White House officials April 8 said they would recommend President Donald Trump veto House Democrats’ efforts to revive net neutrality guidelines enacted in 2015 by the Federal Communications Commission under President Obama.

The current FCC, under Trump-appointed chairman Ajit Pai, reversed the guidelines, favoring so-called “light touch” regulation.

Following the 2018 midterm elections, Rep. Mike Doyle (D-Pa.) introduced H.R. #1644 (Save the Internet) that would reinstate net neutrality classifying the Internet as a utility under Title II of the Telecommunications Act of 1934.

The bill, which has 197 co-sponsors, seeks to stop Internet service providers from enacting speed lanes for higher-paying Web traffic and throttling third-party competitive services.

The legislation is up for possible vote in the Democrat-control House as early as April 9. If passed, it would be reconciled in the Senate and then sent to Trump for his signature or veto.

The White House (and many Republicans) argue that the current FCC last year sought to “restore Internet freedom” by adopting so-called “light-touch” regulation that it said enabled the Internet and entrepreneurs to “thrive” for nearly two decades.

In a tweet, the Office of Management and Budget said that since the FCC reversed its position on net neutrality, the United States has risen to sixth from 13th in global fixed broadband download speeds.

It said ongoing rollout of fiber technology benefited from a change in the law, underscored by an increase in capital investment by $2.3 billion.

“H.R. 1644 would undermine this success by repealing the FCC’s current rule,” the OMB tweeted. “If H.R. 1644 were presented to the President, his advisors would recommend that he veto it.”

 

 

Lawmakers Introduce ‘Save the Internet’ Bill

As expected, Democratic lawmakers in the House and Senate March 6 introduced legislation aimed at overturning the FCC’s 2017 repeal of the 2015 Open Internet Order, or net neutrality.

Dubbed “Save the Internet Act,” the bill seeks to re-classify the Internet as a utility under Title II of the Telecommunications Act of 1934 prohibiting Internet service providers from blocking, throttling or creating fast lanes and slow lanes by charging extra fees to prioritize content.

“Since the FCC foolishly repealed net neutrality, we’ve seen a wild west where monopoly telephone and cable companies have been free to do what they want at the expense of consumers,” Michael Copps, a former FCC commissioner, said in a statement in support of the legislation.

Copp contends there exists evidence of broadband providers throttling speeds, degrading video quality, and creating service plans that favor their own content over competitors.

“The harms will only get worse the longer net neutrality remains repealed,” he said.

Jason Pye, VP of legislative affairs with FreedomWorks, a lobby group supporting small government, lower taxes and free markets, said repeal of net neutrality guidelines was an attempt to correct government overreach.

“This Democratic proposal is yet another solution in search of a problem,” said Pye. “Our Internet grew, innovated, and thrived under a light touch regulatory framework. The Democrats’ bill would inhibit future innovation and would only serve to increase big government control over the lives of everyday Americans.”

Regardless, the bill must pass Congress and then be signed by President Trump – a long shot considering Trump’s appointee to run the FCC – Ajit Pai – personally pushed for the net neutrality repeal.

 

 

FCC: Nearly Half of 22 Million Public Comments on Net Neutrality Fake

During the 2017 run-up to the Federal Communication Commission’s repeal of net neutrality guidelines enacted in 2015 during the Obama Administration, the agency solicited public comments on the proposed decision not to treat the Internet as a public utility.

The FCC on Dec. 14, 2017 voted 3-2 along party lines to nullify the Open Internet Order affirmed under previous chairman Tom Wheeler. In doing so, Internet service providers such as Comcast, AT&T, Verizon and Charter were no longer prohibited from charging online streaming services such as Netflix market rates for broadband access, among other issues.

In new FCC disclosures following Freedom of Information Act requests by The New York Timesand other media groups, it was revealed that nearly 11 million of the 22 million comments received online regarding net neutrality were fraudulent, including 500,000 comments received from Russian sources.

The revelation underscores the widespread influx and influence social media can have on more than national elections. Indeed, about 8 million fake comments originated from domain sites associated with FakeMailGenerator.com. Another 2 million comments used stolen identities.

FCC Chairman Ajit Pai, in a statement to Congress, claimed that much of the “overheated rhetoric” against his proposed net neutrality rollback originated from fraudulent sources. In fact, most of the authentic comments reportedly consisted of form-letter responses.

Regardless, the New York State Attorney General’s Office in October opened an investigation to the fake comments, including subpoenaing public action groups on both sides of the issue.

 

Nexstar Media Group Acquires Tribune Media Company for $6.4 Billion

Nexstar Media Group Dec. 3 announced it has entered into a definitive merger agreement with Tribune Media Company to acquire all outstanding shares of Tribune Media in a cash deal valued at $6.4 billion, including the assumption of Tribune Media’s outstanding ($2.3 billion) debt.

The transaction makes Irving, Texas-based Nexstar the largest local TV station owner in the country, including 216 stations in 118 markets – reaching approximately 39% of U.S. television households. Tribune also owns 31% stake in Food Network.

The combined entity will be one of the nation’s leading providers of local news, entertainment, sports, lifestyle and network programming through its broadcast and digital media platforms with annual revenue of approximately $4.6 billion.

Notable Tribune stations include WGN America in Chicago and KTLA in Los Angeles. WGN became one of the first local broadcasters to ink production deals for original (now cancelled) series, including “Salem” from 20thCentury Fox, “Manhattan” (Lionsgate), and “Underground” (Sony Pictures), among others.

The deal is expected to close by the third-quarter next year following regulatory approvals.

“Nexstar has long viewed the acquisition of Tribune Media as a strategically, financially and operationally compelling opportunity that brings immediate value to shareholders of both companies,” Perry Sook, CEO of Nexstar, said in a statement.

Sook said the transaction offers synergies ($160 million in the first year) related to the enhanced scale of the combined broadcast and digital media operations and increases the company’s audience reach by about 50%.

The deal follows the scuttled $3.9 billion merger attempt between Tribune and Sinclair Broadcasting Group, which imploded following allegations the politically conservative Sinclair would have positioned Tribune stations as far-right partisan mouthpieces.

The new transaction reflects a 15.5% premium for Tribune Media shareholders and a 45% premium to Tribune’s closing price on July 16, the day FCC Ajit Pai issued a statement regarding his intention to hold a hearing on the Sinclair offer.

The Nexstar/Tribune deal faces its own regulatory hurdles under the current FCC and Department of Justice, which together under the direction of the Trump Administration, have taken stronger approaches toward media mergers as seen in the DOJ’s ongoing appeal of the AT&T/Time Warner pact.

Indeed, Nexstar said it intends to divest certain TV stations necessary to comply with regulatory ownership limits and may also divest other assets it deems to be non-core.

 

 

U.S. Supreme Court Refuses to Hear Net Neutrality Appeals Court Ruling

The U.S. Supreme Court Nov. 5 declined to hear a case brought by the telecommunications industry and the Department of Justice seeking to reverse a lower appeals court ruling upholding Obama-era regulations that treated the Internet as a utility.

The Federal Communications Commission under President Trump reversed the regulations in 2017. Through the Obama-era guidelines were no longer in place, the Trump Administration and telecoms were hoping the Supreme Court would remove the precedent set by the 2016 U.S. Court of Appeals for the District of Columbia Circuit’s ruling that upheld them.

The Supreme Court’s lack of action on the case does not reverse the 2017 repeal of the net neutrality guidelines enacted in 2015, and leaves the door open to future litigation for any net neutrality policy.

The FCC reversal had been seen as a win for major ISPs such as Comcast, AT&T and Verizon having greater control of content distribution on the Internet. Indeed, Dish Network this month alleged AT&T-owned HBO and Cinemax wouldn’t renegotiate pay-TV carriage agreements, in part due to AT&T’s competing over-the-top video distribution platforms.

California state lawmakers this year voted to adopt the guidelines affording content providers such as Google, Apple, Facebook, Netflix, Hulu and Amazon Prime Video equal access to high-speed Internet distribution without being subjected to throttling, blocking or paid prioritization by Internet service providers.

Enforcement of the new legislation – set to take effect in January – has been put on hold pending a separate lawsuit by the federal government that argues states seeking their own net neutrality guidelines are violating the supremacy clause.

Comcast Pledges Net Neutrality Support as Government Safeguards Expire

Comcast reiterated support for so-called net neutrality provisions the same day (June 11) the Federal Communication Commission’s “Restoring Internet Freedom Order” took effect, rolling back many safeguards intended to mandate a level playing field on the Internet.

In a blog post, Dave Watson, CEO of Comcast Cable, said the nation’s largest cable pay-TV operator would not change how it handles third-party streaming services on its broadband network.

“We still don’t and won’t block, throttle or discriminate against lawful content,” Watson wrote. “We’re still not creating fast lanes. We still don’t have plans to enter into any so-called paid prioritization agreements.”

Yet, throttling is precisely what Netflix co-founder and CEO Reed Hastings accused Comcast and other Internet Service Providers of doing in 2014. Hastings said Netflix was forced into paying “a toll” to “some big ISPs” so its subscribers wouldn’t be subjected to buffering and pixilated images.

“The essence of net neutrality is that ISPs such as AT&T and Comcast don’t restrict, influence, or otherwise meddle with the choices consumers make,” said Hastings at the time. “The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient. This weak [pre- 2015] net neutrality isn’t enough to protect an open, competitive internet; a stronger form of net neutrality is required.”

Hastings’ grumblings reached President Obama, who, together with former FCC chairman Tom Wheeler in 2015 helped push through tougher safeguards for streaming services – much to the chagrin of ISPs.

Under new FCC chairman Ajit Pai – a former cable lobbyist and Obama appointee – the agency did away with what Pai considered “unnecessary, heavy-handed regulations” imposed by Wheeler that characterized the Internet as a utility and regulated under the Telecommunications Act of 1934.

Watson contends the Internet can be better safeguarded under the same regulatory-light (i.e. scant government oversight) approach that helped create it.

“We continue to believe the best way to ensure lasting net neutrality rules that protect consumers and promote investment is for Congress to enact legislation,” he wrote.

FCC Commissioner Sends Letter Asking Amazon and eBay to Help Stop Sale of Fraudulent Set-Top Boxes

FCC commissioner Mike O’Reilly May 25 sent a letter to Amazon chairman and CEO Jeff Bezos and eBay president and CEO Devin Wenig asking them to help stop the sale of fraudulent set-top boxes, many of which can be used to illegally view content.

“I am writing because certain manufacturers of video television set-top boxes are either failing to comply with Federal Communications Commission equipment authorization requirements or falsely using FCC branding on their devices,” O’Reilly wrote. “Although sufficiently disturbing on its own, these devices are particularly problematic as they are perpetrating intellectual property theft and consumer fraud. While the Commission has obligations on our end to prevent unauthorized set-top boxes from being available no matter their use, I seek your partnership in helping to remove these illegal products from the stream of commerce.”

FCC logo

O’Reilly noted that manufacturers using the FCC logo have demonstrated compliance with the commission’s regulations and that the logo’s use is required to market products such as set-top boxes in the United States.

“Disturbingly, some rogue set-top box manufacturers and distributors are exploiting the FCC’s trusted logo by fraudulently placing it on devices that have not been approved via the Commission’s equipment authorization process,” O’Reilly wrote. “Specifically, nine set top box distributors were referred to the FCC in October for enabling the unlawful streaming of copyrighted material, seven of which displayed the FCC logo, although there was no record of such compliance. Many of these sellers are attempting to distribute their non-compliant products through online marketplaces such as yours. Although outside the jurisdiction of the Commission, it is equally troubling that many of these devices are being used to illegally stream copyrighted content, exacerbating the theft of billions of dollars in American innovation and creativity.”

While recognizing the eBay and Amazon have taken steps to remove devices marketed as facilitating piracy from their websites, he asked for “further cooperation in assisting the FCC in taking steps to eliminate non-FCC compliant devices or devices that fraudulently bear the FCC logo.”

He also noted that many of the devices contain “harmful malware.”

Ex-FCC Chairman Powell Comes Out Swinging Against Net Neutrality, Tech Giants

Former FCC chairman Michael Powell calls the net neutrality debate old news, contending the real battle lies with the burgeoning power of tech giants such as Amazon, Google, Apple and Facebook.

Speaking March 6 at the Cable Congress in Dublin, Powell – now CEO of the National Cable & Telecommunications Association trade group, whose members include Comcast, AT&T, Charter, Cox and CenturyLink – characterized net neutrality as yesterday’s news, while calling for greater oversight on the “fairy tale stories” spun by tech companies that “do no evil.”

“Net neutrality has become like mindless trench warfare,” he said, adding that current Title II regulation of the Internet is antiquated and “designed for a slow-moving telecom monopoly in the 1930s.”

The FCC, under new chairman Ajit Pai, in December voted to repeal net neutrality guidelines approved in 2015 mandating open access to the Internet.

Powell advocates lawmakers in the United States not fight “the last war” and instead focus on the next one involving companies whose $2.8 trillion market capitalization he claims rivals the GDP of France.

“They are the market,” he said, as reported by The Economist.

Powell, a free market advocate, who was nominated to the FCC by President Bill Clinton in the 1990s, contends government regulation should apply to social media platforms that “massively increase our subjugation to algorithms,” and, he believes, increasingly ignore privacy, social relationship and mental health concerns.

He says unregulated social media and Internet has resulted in global cyber security concerns, proliferation of fake news, sex trafficking and polarization of society, among other issues.

“Fragmentation is dangerous in a democracy,” Powell said. “This demands a government response.”

 

Verizon, Straight Path Pay Record $614 Million FCC Fine

The Federal Communications Commission Feb. 28 announced that Straight Path Communications and Verizon Communications paid a $614 million civil penalty in connection with a January 2017 settlement regarding wireless spectrum.

The fine is the largest civil penalty ever paid to the U.S. Treasury to resolve a FCC investigation. The payment – and relinquishment of 20% of spectrum licenses – is on top of $15 million Straight Path previously paid to the U.S. Treasury.

The agreement was made prior to closure of Straight Path’s $3.1 billion sale and transfer of licenses to Verizon.

The settlement resolved an investigation into allegations Straight Path failed to properly use (or was sitting on) the spectrum it was awarded by the federal government – violating the government’s buildout and discontinuance rules in connection with about 1,000 licenses in certain millimeter wave spectrum bands.

High-frequency bands, or 5G, represent the next-generation of wireless technology.

Verizon and Straight Path entered into a merger agreement May 11, 2017 to transfer licenses, and on Jan. 18, 2018, the FCC’s wireless telecommunications bureau approved the transfer.

 

 

 

 

Coalition of 22 States Refile Lawsuits Against Net Neutrality Repeal

As expected, a coalition of attorney generals representing 22 states and the District of Columbia have formally refiled legal challenges against the Federal Communications Commission’s repeal of laws intended to safeguard the Internet, a.k.a. net neutrality.

The litigation was first filed in January and then withdrawn until Feb. 22 after the FCC officially published the repeal in the Federal Register. Notably, the repeal would also seek to block individual states from incorporating separate net neutrality guidelines. The agency intends to roll back net neutrality in April.

States include California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and the District of Columbia.

The legal action is also backed by a group of Internet-based services, including Netflix, Amazon, Microsoft, Google, Facebook, Vimeo and Mozilla, among others.

“Repealing net neutrality will allow Internet service providers to put corporate profits over consumers by controlling what we see, do, and say online,” Eric Schneiderman, head of the coalition and AG for the state of New York, said in a statement when the filings were first announced last month. “An open Internet, and free exchange of ideas it allows, is critical to our democratic process.”

The FCC in December voted (3-2, along political lines) to overturn net neutrality guidelines after Trump-appointed chairman Ajit Pai declared them to be government overreach and unnecessary. Pai was appointed to the FCC by President Obama in 2011.

Following publication in the Register, Congress has 60 days to take action on the repeal. U.S. Senate Democrats reportedly claim to have the support of 50 senators – one short of a majority needed to block the repeal.

Any action taken by the Senate would have to be supported by the GOP-controlled House of Representatives and signed by Trump – all unlikely scenarios.

The repeal has been hailed by Internet service providers, including AT&T, Comcast and Verizon, which claim support for net neutrality but contend current guidelines impede investment and market-based strategies.

FCC commissioner Jessica Rosenworcel, who voted against the repeal, disagrees.

“The FCC is on the wrong side of history and the wrong side of the law and it deserves to have its handiwork revisited, reexamined, and ultimately reversed,” Rosenworcel said in a Feb. 22 statement.