The influential watchdog group Center for Democracy & Technology has told the the Federal Communications Commission that allowing companies to pay Internet service providers for prioritized delivery of content would hurt the Web's openness.
"Ensuring that operators do not engage in paid prioritization is fundamental to ensuring that the Internet continues to operate as an open, interconnected platform for commerce, speech, and innovation," the group said Tuesday in a letter filed with the Federal Communications Commission.
In recent weeks, net neutrality advocates, ISPs and policymakers have increasingly focused on "paid prioritization" -- largely because the concept is central to Google and Verizon's joint proposal for neutrality rules. The two companies proposed that ISPs should be prohibited from degrading or prioritizing traffic that currently travels over the so-called public Internet, but allowed to create fast lanes for managed services like telemedicine, distance learning, and new entertainment offerings.
Neutrality advocates generally oppose that plan, arguing that allowing ISPs to create fast lanes would disadvantage innovators and start-ups that can't afford to pay for prioritized delivery.
Last week, AT&T submitted a report to the FCC arguing that paid prioritization already exists online and that the system is "expressly contemplated" by the Internet Engineering Task Force. AT&T alone has hundreds of third-party customers for such services," the company said, adding that these customers include "healthcare providers, community service organizations, restaurant chains, car dealers, electric utilities, banks, municipalities, security/alarm companies, hotels, labor unions, charities, and video-relay service providers.
The CDT's filing on Tuesday was in response to that claim by AT&T. CDT argues that AT&T "mischaracterized" the intent of the Internet Engineering Task Force, or IETF, and its part in shaping policy. "The IETF and other technical standards bodies play a crucial role in designing the protocols that allow networks and devices to interoperate seamlessly, but it is a mistake to project business and policy decisions, about paid prioritization or any other matter, onto technical standards that make no such claims," the CDT says.
By Wendy Davis
Showing posts with label fcc. Show all posts
Showing posts with label fcc. Show all posts
Thursday, September 9, 2010
Friday, May 7, 2010
FCC Chair Cites 'Third Way' For Neutrality
Moving to reassert authority over broadband, Federal Communications Commission Chairman Julius Genachowski on Thursday put forward a plan to subject Internet service providers to the common carrier regulations that have long governed telephone companies.
Specifically, Genachowski proposed reclassifying broadband transmission as a telecommunications service under Title II of the Telecommunications Act. Doing so would allow the FCC to issue neutrality rules banning providers from discriminating against particular sites or applications by either degrading or prioritizing traffic.
At the same time, Genachowski also proposed that the FCC apply only a few of Title II's provisions while agreeing to forbear from terms "that are unnecessary and inappropriate for broadband access service."
Among the provisions that would not be applied are unbundling requirements, which means that Internet service providers would not have to share lines with competitors. The proposal also wouldn't affect components of broadband other than transmission, including Internet content like Google's search results.
Calling the potential reclassification a "restrained approach," Genachowski said it marked a "third way" between burdensome rules and a laissez-faire attitude.
"Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation," Genachowski said in a statement.
But the two Republican Commissioners, Robert McDowell and Meredith Baker, condemned the proposal as a "stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."
They also warned that the proposal puts the FCC's credibility at risk. "Government agencies simply cannot create new legal powers beyond those granted by Congress," they said in a joint statement.
Genachowski's proposal was triggered by last month's court decision in the Comcast case. The U.S. Court of Appeals for the District of Columbia Circuit ruled in that case that the FCC had no authority to sanction Comcast for violating neutrality principles because the agency had power to regulate "information" services subject to Title I.
That decision left the FCC without the power to issue neutrality regulations unless it also reclassified broadband as a Title II service.
In the four weeks since the court issued the Comcast ruling, consumer advocates strongly urged the FCC to reclassify broadband as a Title II service. Telecoms and cable companies, for their part, said they believed a reclassification would be illegal and vowed litigation. Public Knowledge, which had used for reclassification, said it was "generally pleased" with Genachowski's plan, but took issue with the decision to refrain from requiring ISPs to share their lines. "Line sharing is a crucial method to ensuring the long-term vibrancy of the broadband market and to providing more choices for consumers," president Gigi Sohn said in a statement.
Not surprisingly, some ISPs criticized the initiative. Verizon's Tom Tauke, executive vice president of public affairs, policy and communications, called Genachowski's plan "legally unsupported" and indicated the company would challenge any reclassification in court. "The regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation's broadband future," Tauke said in a statement.
AT&T also condemned the move, saying it was "without legal basis."
Comcast issued a more restrained response. "While we are disappointed with the inclination not to lean in favor of Title I regulation, we are prepared to work constructively with the Commission to determine whether there is a 'third way' approach that allows the Commission to take limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."
Specifically, Genachowski proposed reclassifying broadband transmission as a telecommunications service under Title II of the Telecommunications Act. Doing so would allow the FCC to issue neutrality rules banning providers from discriminating against particular sites or applications by either degrading or prioritizing traffic.
At the same time, Genachowski also proposed that the FCC apply only a few of Title II's provisions while agreeing to forbear from terms "that are unnecessary and inappropriate for broadband access service."
Among the provisions that would not be applied are unbundling requirements, which means that Internet service providers would not have to share lines with competitors. The proposal also wouldn't affect components of broadband other than transmission, including Internet content like Google's search results.
Calling the potential reclassification a "restrained approach," Genachowski said it marked a "third way" between burdensome rules and a laissez-faire attitude.
"Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation," Genachowski said in a statement.
But the two Republican Commissioners, Robert McDowell and Meredith Baker, condemned the proposal as a "stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."
They also warned that the proposal puts the FCC's credibility at risk. "Government agencies simply cannot create new legal powers beyond those granted by Congress," they said in a joint statement.
Genachowski's proposal was triggered by last month's court decision in the Comcast case. The U.S. Court of Appeals for the District of Columbia Circuit ruled in that case that the FCC had no authority to sanction Comcast for violating neutrality principles because the agency had power to regulate "information" services subject to Title I.
That decision left the FCC without the power to issue neutrality regulations unless it also reclassified broadband as a Title II service.
In the four weeks since the court issued the Comcast ruling, consumer advocates strongly urged the FCC to reclassify broadband as a Title II service. Telecoms and cable companies, for their part, said they believed a reclassification would be illegal and vowed litigation. Public Knowledge, which had used for reclassification, said it was "generally pleased" with Genachowski's plan, but took issue with the decision to refrain from requiring ISPs to share their lines. "Line sharing is a crucial method to ensuring the long-term vibrancy of the broadband market and to providing more choices for consumers," president Gigi Sohn said in a statement.
Not surprisingly, some ISPs criticized the initiative. Verizon's Tom Tauke, executive vice president of public affairs, policy and communications, called Genachowski's plan "legally unsupported" and indicated the company would challenge any reclassification in court. "The regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation's broadband future," Tauke said in a statement.
AT&T also condemned the move, saying it was "without legal basis."
Comcast issued a more restrained response. "While we are disappointed with the inclination not to lean in favor of Title I regulation, we are prepared to work constructively with the Commission to determine whether there is a 'third way' approach that allows the Commission to take limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."
Tuesday, March 16, 2010
FCC Broadband Plan Focuses on Privacy, Competition
The Federal Communications Commission's ambitious national broadband plan will include recommendations aimed at ensuring consumers' online privacy, according to an executive summary released on Monday.
While the six-page summary was short on details, the FCC said it intends to suggest measures to "clarify the relationship between users and their online profiles ... including the obligation of firms collecting personal information to allow consumers to know what information is being collected, consent to such collection, correct it if necessary, and control disclsoure of such information to third parties."
The FCC in January asked for comments about online privacy in response to a proposed notice of inquiry submitted by the digital rights group Center for Democracy & Technology. But it wasn't clear until Monday whether the FCC intended to address the issue in its broadband plan.
The decision to address privacy at all could prove controversial. Earlier this year, the Interactive Advertising Bureau had asked the FCC to refrain from considering online privacy in the broadband plan. The IAB argued that Congress tasked the FCC to formulate a broadband plan as part of a stimulus bill that "makes no mention of privacy" and was aimed at "furthering the build out of a high-speed broadband infrastructure across the country."
Now that the FCC is issuing privacy recommendations, early indications are that the commission might have incorporated standards that are fast becoming outdated.
For instance, the summary released on Monday focused on a notice-and-choice regime for the collection of "personal information."
But Jules Polonetsky, co-chairman and director of the think tank Future of Privacy Forum, says that policymakers seem to be shifting away from the notice-and-choice framework -- at least when it involves providing notice and an opportunity to opt out of targeting in lengthy, legalese-filled privacy policies. "Progressive thinkers in government are laying the groundwork to evolve beyond that mode of thinking," he says.
A recent article in The New York Times quoted Daniel Weitzner, a policy official at the Commerce Department's National Telecommunications and Information Administration, as saying: "There are essentially no defenders anymore of the pure notice-and-choice model."
In addition, the FCC's executive summary focused on personal information, but there's currently a great deal of disagreement about what that term means.
Ad industry executives have often defined "personally identifiable information" as name, address, email address or phone number, but consumer advocates and policymakers have been pressuring for more expansive definitions. They argue that people can be identified based on even so-called anonymous data if enough of it is collected. Search queries alone can be used to identify people, as happened after AOL released three months' worth of such queries.
Last year, the Federal Trade Commission said that even non-personally identifiable information could be used to identify specific users.
The broadband plan also will include recommendations aimed at improving competition. Among other suggestions, the FCC will recommend "comprehensive review of wholesale competition rules to help ensure competition in fixed and mobile broadband services," as well as rules requiring increased transparency in performance. In addition, the FCC also will ask broadcasters to give back spectrum that can be used for wireless computing.
While the six-page summary was short on details, the FCC said it intends to suggest measures to "clarify the relationship between users and their online profiles ... including the obligation of firms collecting personal information to allow consumers to know what information is being collected, consent to such collection, correct it if necessary, and control disclsoure of such information to third parties."
The FCC in January asked for comments about online privacy in response to a proposed notice of inquiry submitted by the digital rights group Center for Democracy & Technology. But it wasn't clear until Monday whether the FCC intended to address the issue in its broadband plan.
The decision to address privacy at all could prove controversial. Earlier this year, the Interactive Advertising Bureau had asked the FCC to refrain from considering online privacy in the broadband plan. The IAB argued that Congress tasked the FCC to formulate a broadband plan as part of a stimulus bill that "makes no mention of privacy" and was aimed at "furthering the build out of a high-speed broadband infrastructure across the country."
Now that the FCC is issuing privacy recommendations, early indications are that the commission might have incorporated standards that are fast becoming outdated.
For instance, the summary released on Monday focused on a notice-and-choice regime for the collection of "personal information."
But Jules Polonetsky, co-chairman and director of the think tank Future of Privacy Forum, says that policymakers seem to be shifting away from the notice-and-choice framework -- at least when it involves providing notice and an opportunity to opt out of targeting in lengthy, legalese-filled privacy policies. "Progressive thinkers in government are laying the groundwork to evolve beyond that mode of thinking," he says.
A recent article in The New York Times quoted Daniel Weitzner, a policy official at the Commerce Department's National Telecommunications and Information Administration, as saying: "There are essentially no defenders anymore of the pure notice-and-choice model."
In addition, the FCC's executive summary focused on personal information, but there's currently a great deal of disagreement about what that term means.
Ad industry executives have often defined "personally identifiable information" as name, address, email address or phone number, but consumer advocates and policymakers have been pressuring for more expansive definitions. They argue that people can be identified based on even so-called anonymous data if enough of it is collected. Search queries alone can be used to identify people, as happened after AOL released three months' worth of such queries.
Last year, the Federal Trade Commission said that even non-personally identifiable information could be used to identify specific users.
The broadband plan also will include recommendations aimed at improving competition. Among other suggestions, the FCC will recommend "comprehensive review of wholesale competition rules to help ensure competition in fixed and mobile broadband services," as well as rules requiring increased transparency in performance. In addition, the FCC also will ask broadcasters to give back spectrum that can be used for wireless computing.
Thursday, February 25, 2010
Wireless Carriers, Google Respond To FCC on ETFs
The four major U.S. wireless operators and Google Tuesday filed their responses to a Federal Communications Commission inquiry into the fees charged to customers who drop wireless service before their contracts end.
The carriers separately defended early termination fees (ETFs) as a necessary part of being able to offer discounted mobile devices and lower monthly rates while allowing operators to recoup a portion of lost revenue when customers cancel service prematurely. Google defended the "equipment recovery fee" on its Nexus One smartphone launched in January on similar grounds.
The FCC probe was initially sparked when Verizon Wireless doubled the ETF on smartphones and other high-end devices from $175 to $350 in November. The agency asked Verizon about the rationale behind the increase and how the company notifies customers about the ETFs.
The nation's largest wireless carrier in December told the FCC that the higher fee was justified not only by the cost of subsidizing higher-priced smartphones, but also the higher operational expenses required by the devices -- from advertising to running its broadband network. Verizon's reply drew the ire of at least one commissioner -- Mignon Clyburn -- who called Verizon's answers "unsatisfying, and, in some cases, troubling" in a sharply worded public rebuke.
Late last month, the FCC opened a formal inquiry into ETFs, sending letters to Verizon, AT&T, T-Mobile Sprint and Google asking about their policies and disclosure practices concerning the fees. For its part, Verizon essentially reiterated its prior response to the agency on the subject, maintaining that the increased ETF was commensurate with increased upfront costs associated with more sophisticated phones.
"In brief, term contracts with ETFs benefit consumers by enabling them to obtain access to devices at a significantly lower up-front cost, while enabling Verizon Wireless to recoup the extraordinarily expensive investment required to support its wireless network and operations and the cost of providing the devices at a substantial discount," stated Verizon's letter to the FCC.
Since its initial response, however, the carrier pointed out that it had removed 10 phones from the list of 46 "Advanced Devices" it sells that carry the $350 ETF. The $175 penalty is charged on other Verizon contract phones.
Other carriers made similar arguments, emphasizing the consumer benefits that ETFs help to make possible, including reduced pricing on high-end devices and product and service innovation. They also reiterated that customers are free to buy phones without contracts at full retail price to avoid ETFs.
"In that regard, despite the "no contract/no ETF" choices available to them, the overwhelming majority of AT&T customers choose a term plan arrangement that enables them to obtain a new handset at a discounted price," stated AT&T's letter. In contrast to Verizon, AT&T charges an ETF of $175 on all phones, while Sprint and T-Mobile impose a $200 fee across all models.
The wireless operators also defended their procedures for informing subscribers about ETFs as transparent and extensive, detailing disclosures made through print and online advertising, checklists for sales reps, contract language and sales receipts, among other ways of providing notification.
Google acknowledged that there had been "some concerns and confusion" in relation to separate early-termination penalties charged by itself and carrier partner T-Mobile in connection with the Nexus One device sold directly online by Google. The tech giant has also made the biggest concession to date on ETFs, dropping what it calls its equipment recovery fee, or ERF, on the Nexus One from $350 to $150 earlier this month.
The tech giant faced a backlash when it was revealed that customers who canceled or downgraded their T-Mobile service plans for the Nexus One within 120 days of purchase (but after the 14-day trial period) would have to pay the $350 fee to Google in addition to the standard $200 penalty owed to T-Mobile.
Google told the FCC the ERF -- albeit lower -- is necessary to help recover the device subsidy it provides when someone buys the Nexus One with a T-Mobile contract. The company said T-Mobile pays it a commission for each new subscriber buying the phone through its online store or existing ones upgrading service plans for the Nexus One.
The commissions are then passed along to consumers in the form of discounted pricing. New T-Mobile customers can buy the Nexus One for $179 instead of the full retail price of $529 for an unlocked version of the phone.
For its part, T-Mobile still imposes its $200 ETF on Nexus One service contracts, but stated that -- as with other phones -- the fee is intended to recoup a portion of lost revenue from early terminations rather than specific equipment costs. T-Mobile's letter also stated that Google and the carrier "have made changes to further enhance disclosures regarding the ERF and T-Mobile's terms and conditions, including the ETF, as part of the Google sales process."
The carriers separately defended early termination fees (ETFs) as a necessary part of being able to offer discounted mobile devices and lower monthly rates while allowing operators to recoup a portion of lost revenue when customers cancel service prematurely. Google defended the "equipment recovery fee" on its Nexus One smartphone launched in January on similar grounds.
The FCC probe was initially sparked when Verizon Wireless doubled the ETF on smartphones and other high-end devices from $175 to $350 in November. The agency asked Verizon about the rationale behind the increase and how the company notifies customers about the ETFs.
The nation's largest wireless carrier in December told the FCC that the higher fee was justified not only by the cost of subsidizing higher-priced smartphones, but also the higher operational expenses required by the devices -- from advertising to running its broadband network. Verizon's reply drew the ire of at least one commissioner -- Mignon Clyburn -- who called Verizon's answers "unsatisfying, and, in some cases, troubling" in a sharply worded public rebuke.
Late last month, the FCC opened a formal inquiry into ETFs, sending letters to Verizon, AT&T, T-Mobile Sprint and Google asking about their policies and disclosure practices concerning the fees. For its part, Verizon essentially reiterated its prior response to the agency on the subject, maintaining that the increased ETF was commensurate with increased upfront costs associated with more sophisticated phones.
"In brief, term contracts with ETFs benefit consumers by enabling them to obtain access to devices at a significantly lower up-front cost, while enabling Verizon Wireless to recoup the extraordinarily expensive investment required to support its wireless network and operations and the cost of providing the devices at a substantial discount," stated Verizon's letter to the FCC.
Since its initial response, however, the carrier pointed out that it had removed 10 phones from the list of 46 "Advanced Devices" it sells that carry the $350 ETF. The $175 penalty is charged on other Verizon contract phones.
Other carriers made similar arguments, emphasizing the consumer benefits that ETFs help to make possible, including reduced pricing on high-end devices and product and service innovation. They also reiterated that customers are free to buy phones without contracts at full retail price to avoid ETFs.
"In that regard, despite the "no contract/no ETF" choices available to them, the overwhelming majority of AT&T customers choose a term plan arrangement that enables them to obtain a new handset at a discounted price," stated AT&T's letter. In contrast to Verizon, AT&T charges an ETF of $175 on all phones, while Sprint and T-Mobile impose a $200 fee across all models.
The wireless operators also defended their procedures for informing subscribers about ETFs as transparent and extensive, detailing disclosures made through print and online advertising, checklists for sales reps, contract language and sales receipts, among other ways of providing notification.
Google acknowledged that there had been "some concerns and confusion" in relation to separate early-termination penalties charged by itself and carrier partner T-Mobile in connection with the Nexus One device sold directly online by Google. The tech giant has also made the biggest concession to date on ETFs, dropping what it calls its equipment recovery fee, or ERF, on the Nexus One from $350 to $150 earlier this month.
The tech giant faced a backlash when it was revealed that customers who canceled or downgraded their T-Mobile service plans for the Nexus One within 120 days of purchase (but after the 14-day trial period) would have to pay the $350 fee to Google in addition to the standard $200 penalty owed to T-Mobile.
Google told the FCC the ERF -- albeit lower -- is necessary to help recover the device subsidy it provides when someone buys the Nexus One with a T-Mobile contract. The company said T-Mobile pays it a commission for each new subscriber buying the phone through its online store or existing ones upgrading service plans for the Nexus One.
The commissions are then passed along to consumers in the form of discounted pricing. New T-Mobile customers can buy the Nexus One for $179 instead of the full retail price of $529 for an unlocked version of the phone.
For its part, T-Mobile still imposes its $200 ETF on Nexus One service contracts, but stated that -- as with other phones -- the fee is intended to recoup a portion of lost revenue from early terminations rather than specific equipment costs. T-Mobile's letter also stated that Google and the carrier "have made changes to further enhance disclosures regarding the ERF and T-Mobile's terms and conditions, including the ETF, as part of the Google sales process."
FCC To Propose 'Mobile Future Auction'
As part of a national broadband plan, FCC Commissioner Julius Genachowski Wednesday outlined a new initiative allowing television broadcasters to give up spectrum in exchange for a cut of auction revenue.
Speaking at the New America Foundation think tank, Genachowski said the FCC would propose a "Mobile Future Auction" in which broadcasters and other licensees could trade in spectrum in return for a share of the proceeds of spectrum auctions as a way to help expand mobile broadband.
"The Mobile Future Auction would allow broadcasters to elect to participate in a mechanism that could save costs for broadcasters while also being a major part of the solution to one of our country's most significant challenges," said the FCC Commissioner, who set a goal of freeing up 500 Megahertz of spectrum over the next decade.
He pointed to one study that suggested as much as $50 billion in value could be unlocked if we adopted policies to convert some of the broadcast spectrum to mobile broadband. To date, broadcasters have strongly opposed the FCC possibly taking back some of the national airwaves from TV stations to help meet growing demand for wireless broadband services.
TV executives say they want to use their broadcast spectrum to be able to offer more digital channels, HD and programming for mobile devices. The Mobile Future Auction would potentially provide a market-based incentive for broadcasters to free up spectrum for mobile broadband.
But Genachowski argued that spectrum allotted for broadcast TV isn't being used efficiently. "About 300 megahertz of spectrum have been set aside for broadcast TV," he said. "Even in our very largest cities, at most only about 150 megahertz out of 300 megahertz are used." That's true even with the recent reallocation of spectrum in the digital TV transition, he noted.
The National Association of Broadcasters fired back Wednesday in a statement defending its spectrum use: "As a one-to-many transmission medium, broadcasters are ready to make the case that we are far and away the most efficient users of spectrum in today's communications marketplace," read the NAB release.
"We look forward to working with policymakers to help expand the roll-out of broadband without threatening the future of free and local television, mindful of the fact that local TV stations just returned more than a quarter of our spectrum following our transition to digital."
But Genachowski suggested the future auction could be beneficial for all parties. "For broadcasters, who win more flexibility to pursue business models to serve their local communities; and for the public, which wins more innovation in mobile broadband services, continued free, over-the-air television, and the benefits of the proceeds of new and substantial auction revenues," he said.
To help increase broadband adoption, Genachowski also proposed a "Mobility Fund" as part of wider reforms to the Universal Service Fund. Without increasing the size of the USF, it would seek to provide one-time funding to build infrastructure enabling "robust mobile broadband networks, to bring all states to a minimum level of mobile availability."
For its part, the CTIA expressed support for the chairman's remarks. "By proposing to free up 500 MHz of new spectrum for mobile broadband use, Chairman Genachowski has taken a tremendous step toward maintaining our worldwide mobile ecosystem leadership," said CTIA head Steve Largent, in a statement.
Genachowski's speech Wednesday was the latest in a series of talks he has given on the national broadband plan which the FCC is scheduled to submit to Congress March 17.
Speaking at the New America Foundation think tank, Genachowski said the FCC would propose a "Mobile Future Auction" in which broadcasters and other licensees could trade in spectrum in return for a share of the proceeds of spectrum auctions as a way to help expand mobile broadband.
"The Mobile Future Auction would allow broadcasters to elect to participate in a mechanism that could save costs for broadcasters while also being a major part of the solution to one of our country's most significant challenges," said the FCC Commissioner, who set a goal of freeing up 500 Megahertz of spectrum over the next decade.
He pointed to one study that suggested as much as $50 billion in value could be unlocked if we adopted policies to convert some of the broadcast spectrum to mobile broadband. To date, broadcasters have strongly opposed the FCC possibly taking back some of the national airwaves from TV stations to help meet growing demand for wireless broadband services.
TV executives say they want to use their broadcast spectrum to be able to offer more digital channels, HD and programming for mobile devices. The Mobile Future Auction would potentially provide a market-based incentive for broadcasters to free up spectrum for mobile broadband.
But Genachowski argued that spectrum allotted for broadcast TV isn't being used efficiently. "About 300 megahertz of spectrum have been set aside for broadcast TV," he said. "Even in our very largest cities, at most only about 150 megahertz out of 300 megahertz are used." That's true even with the recent reallocation of spectrum in the digital TV transition, he noted.
The National Association of Broadcasters fired back Wednesday in a statement defending its spectrum use: "As a one-to-many transmission medium, broadcasters are ready to make the case that we are far and away the most efficient users of spectrum in today's communications marketplace," read the NAB release.
"We look forward to working with policymakers to help expand the roll-out of broadband without threatening the future of free and local television, mindful of the fact that local TV stations just returned more than a quarter of our spectrum following our transition to digital."
But Genachowski suggested the future auction could be beneficial for all parties. "For broadcasters, who win more flexibility to pursue business models to serve their local communities; and for the public, which wins more innovation in mobile broadband services, continued free, over-the-air television, and the benefits of the proceeds of new and substantial auction revenues," he said.
To help increase broadband adoption, Genachowski also proposed a "Mobility Fund" as part of wider reforms to the Universal Service Fund. Without increasing the size of the USF, it would seek to provide one-time funding to build infrastructure enabling "robust mobile broadband networks, to bring all states to a minimum level of mobile availability."
For its part, the CTIA expressed support for the chairman's remarks. "By proposing to free up 500 MHz of new spectrum for mobile broadband use, Chairman Genachowski has taken a tremendous step toward maintaining our worldwide mobile ecosystem leadership," said CTIA head Steve Largent, in a statement.
Genachowski's speech Wednesday was the latest in a series of talks he has given on the national broadband plan which the FCC is scheduled to submit to Congress March 17.
Wednesday, January 27, 2010
FCC Opens Inquiry Into ETFs, Questions Carriers, Google
Expanding its probe into cell phone early termination fees, the Federal Communications Commission Tuesday sent letters to the four major U.S wireless carriers and Google asking about their ETF policies.
The opening of a formal inquiry follows the FCC's probe into Verizon Wireless' doubling of its ETF on smartphones from $175 to $350 in November. It also comes on the heels of last week's launch of the agency's Consumer Task Force, created to help safeguard the rights of wireless consumers.
In the letter sent [PDF], to AT&T, Verizon Wireless, Sprint-Nextel, T-Mobile and Google, the FCC asked the companies to explain the reasoning behind their ETFs as well as how consumers are notified about the fees.
"We recognize that wireless carriers may have various rationales for ETFs. At the same time, these fees are substantial (and in some cases are increasing) and have an important impact on consumers' ability to switch carriers," stated the joint letter sent by FCC Consumer Bureau Chief Joel Guerin and Wireless Bureau Chief Ruth Milkman.
"We therefore believe it is essential that consumers fully understand what they are signing up for -- both in the short term and over the life of the contract when they accept a service plan with an early termination fee."
The companies have until Feb. 23 to respond. In response to a prior letter from the FCC following its ETF hike on high-end phones, Verizon last month told the agency the increased charge covered not only the cost of subsidizing sophisticated handsets, but related operating and marketing expenses as well.
That reply was not well received. FCC Commissioner Mignon Clyburn issued with a withering public statement, calling Verizon's answers "unsatisfying, and in some cases, troubling."
The carrier said it would take a hard look at Clyburn's statement and respond appropriately. Verizon last week limited the number of advanced devices it sells that carry the $350 ETF.
The letters sent to Google and wireless partner T-Mobile Tuesday were also pointed in questioning their ETF policies. Anyone who buys Google's recently launched Nexus One phone with a two-year contract from T-Mobile is required to pay a $350 ETF to Google and a separate $200 fee to the carrier if they drop the service within the first 120 days (but after the 14-day trial period). That's a total of $550 --more than the unsubsidized $530 cost of the phone.
"The combination of ETFs from Google and T-Mobile for the Nexus One is also unique among the four major national carriers," stated the letters to Google and T-Mobile. "Consumers have been surprised by this policy and by its financial impact. Please let us know your rationale(s) for these combined fees, and whether you have coordinated or will coordinate on these fees and on the disclosure of their combined effect."
Responding to he FCC's inquiry on ETFs, wireless trade group CTIA issued a statement defending the legitimacy of the charges. "While we understand that the FCC's Consumer Task Force is only looking into the issue of early termination fees, we hope that there is a recognition by the FCC that these fees are part of the rate and rate structure that allows wireless carriers to, among other things, subsidize phone purchases," it read.
The opening of a formal inquiry follows the FCC's probe into Verizon Wireless' doubling of its ETF on smartphones from $175 to $350 in November. It also comes on the heels of last week's launch of the agency's Consumer Task Force, created to help safeguard the rights of wireless consumers.
In the letter sent [PDF], to AT&T, Verizon Wireless, Sprint-Nextel, T-Mobile and Google, the FCC asked the companies to explain the reasoning behind their ETFs as well as how consumers are notified about the fees.
"We recognize that wireless carriers may have various rationales for ETFs. At the same time, these fees are substantial (and in some cases are increasing) and have an important impact on consumers' ability to switch carriers," stated the joint letter sent by FCC Consumer Bureau Chief Joel Guerin and Wireless Bureau Chief Ruth Milkman.
"We therefore believe it is essential that consumers fully understand what they are signing up for -- both in the short term and over the life of the contract when they accept a service plan with an early termination fee."
The companies have until Feb. 23 to respond. In response to a prior letter from the FCC following its ETF hike on high-end phones, Verizon last month told the agency the increased charge covered not only the cost of subsidizing sophisticated handsets, but related operating and marketing expenses as well.
That reply was not well received. FCC Commissioner Mignon Clyburn issued with a withering public statement, calling Verizon's answers "unsatisfying, and in some cases, troubling."
The carrier said it would take a hard look at Clyburn's statement and respond appropriately. Verizon last week limited the number of advanced devices it sells that carry the $350 ETF.
The letters sent to Google and wireless partner T-Mobile Tuesday were also pointed in questioning their ETF policies. Anyone who buys Google's recently launched Nexus One phone with a two-year contract from T-Mobile is required to pay a $350 ETF to Google and a separate $200 fee to the carrier if they drop the service within the first 120 days (but after the 14-day trial period). That's a total of $550 --more than the unsubsidized $530 cost of the phone.
"The combination of ETFs from Google and T-Mobile for the Nexus One is also unique among the four major national carriers," stated the letters to Google and T-Mobile. "Consumers have been surprised by this policy and by its financial impact. Please let us know your rationale(s) for these combined fees, and whether you have coordinated or will coordinate on these fees and on the disclosure of their combined effect."
Responding to he FCC's inquiry on ETFs, wireless trade group CTIA issued a statement defending the legitimacy of the charges. "While we understand that the FCC's Consumer Task Force is only looking into the issue of early termination fees, we hope that there is a recognition by the FCC that these fees are part of the rate and rate structure that allows wireless carriers to, among other things, subsidize phone purchases," it read.
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