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Sen. Ted Cruz’s Latest Enemy: Community Broadband; Wants State Bans Reinstated

Cruz

Cruz

Although running a distant second behind Donald Trump in the Republican presidential primary, Texas Sen. Ted Cruz is still managing to have an influence in the U.S. Senate, where his office is filing a plethora of amendments to various telecommunications bills. Among his top priorities: throwing up roadblocks to keep municipalities from offering broadband to their communities.

Cruz and Sen. Deb Fischer, a fellow Republican from Nebraska, are jointly proposing to attach an amendment to the FCC Process Reform Act that would prohibit the FCC from preempting state laws that limit or prohibit municipal broadband networks. The amendment would “prohibit the FCC from preventing states from implementing  laws relating to provision of broadband Internet access service by state and local governments.”

Several Republicans in Congress have been highly critical of public broadband, despite the fact many local governments in their districts are clamoring for better broadband solutions for their residents.

Cruz and other municipal broadband opponents are responding to FCC Chairman Thomas Wheeler’s decision to effectively overturn those restrictions in Tennessee and North Carolina. Wheeler is considering expanding preemptions in other states where lawmakers passed bills restricting or prohibiting municipal broadband expansion.

The FCC is currently defending its actions in court.

Comcast Raising Usage Caps to 1TB, Boosts Price of Unlimited Add-On to $50 a Month

Comcast-LogoWith the FCC’s increasing skepticism that Comcast’s data caps are about fairness and not an attempt to discourage cable TV customers from cutting the cord and watching all of their shows online, Comcast today announced it was overhauling its data cap allowance and unlimited add-on plan.

Effective June 1, Comcast will increase its current 300GB monthly data cap to a terabyte (1,000GB) for all speed plans. For those exceeding one terabyte in usage, Comcast will sell you an unlimited add-on plan for an extra $50 a month to avoid the overlimit fee of $10 per 50GB of excess usage.

“In our trials, we have experimented with different offers, listened to feedback, and learned a lot,” said Marcien Jenckes, executive vice president of Consumer Services at Comcast Cable. “That is what we said we would do when we launched our trials four years ago – analyze and assess our customers’ reaction to the data plans, including being open to increasing them over time. We have learned that our customers want the peace of mind to stream, surf, game, download, or do whatever they want online. So, we have created a new data plan that is so high that most of our customers will never have to think about how much data they use.”

Comcast-Usage-MeterComcast is also likely responding to thousands of customer complaints filed with the FCC complaining about Comcast’s data caps and the cost of their insurance plan (previously $30-35 depending on market) to avoid overlimit fees.

Despite near universal opposition to Comcast’s data caps, the company has gradually introduced them in a growing number of cities, mostly in the southern United States.

“Comcast doesn’t listen to its customers,” complains Miguel Santos, a Comcast customer in Miami. “It never has and never will. Our family was facing a $200 Internet bill after Comcast introduced caps in Miami-Dade. Now we grudgingly pay them more than $100 a month just for unlimited Internet. It is totally ridiculous.”

Comcast’s decision comes almost a month to the day after AT&T announced it was increasing usage allowances for its U-verse and DSL customers, albeit less generously than Comcast. Most AT&T DSL customers will face 300GB caps, while most U-verse customers will get a boost to 600GB. Only U-verse customers with speeds over 100Mbps will get 1TB of usage.

“We’ve always said that we’d look carefully at the feedback from our trials, continue to evolve our offers, and listen to our customers,” said Jenckes. “We’re currently evaluating our plans to roll this out in other markets, we’ll keep listening – and we’ll be open to making further changes in the future to deliver the best high-speed data service to our customers.”

“That probably means Comcast’s version of generosity will be coming to your city soon,” predicts Santos.

Analysis: FCC, Justice Dept. Ready to Approve Charter-Time Warner Cable-Bright House Merger

charter twc bhThe Justice Department and FCC Chairman Thomas Wheeler are prepared to accept a massive $55 billion merger between Charter Communications, Time Warner Cable, and Bright House Networks, but at a cost of stringent conditions governing the creation of America’s second largest cable conglomerate.

In a joint agreement with the U.S. Department of Justice and the FCC, Charter executives have agreed to do nothing to harm online video competition or implement usage caps or usage-based billing for at least seven years. Charter will also be forced to broaden its cable service to reach at least two million additional homes, some already served by other providers, setting the stage for potential head-to-head competition between two closely-matched competitors.

The deal will directly affect 19.4 million customers of the three companies, which will eventually combine under the Charter Communications brand name and marketing philosophy — selling customers simplified television, phone, and broadband packages that reduce customer options. Little is expected to change for the rest of 2016, however, with Time Warner Cable and Bright House likely to continue operations under existing packaging and pricing until sometime in 2017. Technicians told Stop the Cap! earlier in April they were told not to acquire new outfits with the Time Warner Cable logo and branding, and the cable company is also making preparations to gradually repaint its massive fleet of vans and service vehicles with the Charter logo.

President Obama Expected To Nominate Rep. Mel Watt For Director Of The Federal Housing Finance Agency

Wheeler

Most of the concessions seemed to have originated from FCC Chairman Thomas Wheeler, who has been one of the strongest proponents of online video competition, improved broadband, and direct head-to-head competition between cable operators. The Justice Department focused its attention on challenging the cable industry’s almost-united front against online video competition. Under former CEO Glenn Britt’s leadership, Time Warner Cable was considered “the industry leader” in contract language that guaranteed it would share the lowest price negotiated by any other cable, satellite, telephone company or online video provider. Those agreements also often included clauses that restricted programmers from putting streamed programming online for non-subscribers. That explains why cord-cutters frequently run into barriers watching networks online unless they can prove they are already a pay-TV customer.

Under conditions from the Justice Department, those sections of agreements with Charter, Time Warner Cable and Bright House Networks will become invalid and unenforceable. But that doesn’t mean restrictions will disappear overnight. Comcast, Cox, Cablevision, and other cable companies also enforce similar conditions which will be unaffected by the Justice Department decision, at least for now. But the precedent has sent shudders across an industry concerned about protecting its still-profitable cable TV business, under assault from increased programming costs and a greater reluctance by consumers to tolerate annual rate increases.

analysisGene Kimmelman, chief executive of consumer interest group Public Knowledge, told the Wall Street Journal the conditions were “a clear signal to the content industry and entertainment companies that the enforcement agencies are giving them a green light to grow online video and experiment as a direct competitor to cable, and they will prevent cable from interfering.”

Of greater interest to consumers are the deal conditions proposed by Chairman Wheeler. As Stop the Cap! reported almost a year ago, sources told us the FCC would “get serious” about data caps if companies like Comcast imposed them on customers nationwide. At the moment, Comcast is testing caps affecting just under 15% of their total customer base, already generating thousands of customer complaints with the FCC in response. Although Charter promised three years of cap-free service, Wheeler and his staff obviously felt it was important to send a message that they agree with cap opponents that data caps are more about preventing competition than technical need. By making long term data cap prohibition a core part of a settlement agreement with Charter, Wheeler sends a strong message to Comcast that the FCC isn’t drinking cable industry Kool Aid about the rationale for usage caps and usage billing.

Some consumer groups worry Charter has overextended itself in debt over-acquiring other cable companies.

Some consumer groups worry Charter has overextended itself in debt over-acquiring other cable companies.

“New Charter will not be permitted to charge usage-based prices or impose data caps,” Wheeler said in a statement. “Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers. Additionally, the Department of Justice’s settlement with Charter both outlaws video programming terms that could harm online video distributors (OVDs) and protects OVDs from retaliation– an outcome fully supported by the order I have circulated today. All three seven-year conditions will help consumers by benefitting OVD competition. The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet. Thus, we continue our close working relationship with the Department of Justice on this review.”

Wheeler is also intent on proving there is a viable market for cable operators overbuilding into new territories. To prove that point, Wheeler has gotten an agreement that Charter will introduce service to one million new customers where it will intrude on another operator’s service area and directly compete with it. The other provider has to already offer service at 25Mbps or greater. That could mean Charter competing directly with a cable company like Comcast or building service into an area already served by Verizon FiOS, AT&T U-verse, or another provider offering something beyond traditional DSL.

Copps

Copps

Another million customers just outside of areas served by the three cable companies may also finally get service, as Charter will be compelled to wire at least another million homes for cable service for the first time.

Despite the conditions, many consumer groups and former public officials remain unhappy the merger won approval.

“Creating broadband monopoly markets raises consumer costs, kills competition, and points a gun at the heart of the news and information that democracy depends upon,” said Michael Copps, a former Democratic commissioner at the FCC and a special adviser to the Common Cause public interest group. “FCC approval of this unnecessary merger would be an abandonment of its public interest responsibilities.”

“There’s nothing about this massive merger that serves the public interest. There’s nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans,” said Craig Aaron, president and CEO of Free Press. “Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute.”

Wheeler’s draft order is likely to receive a final vote in the coming days before the Commission. The only remaining holdout is California’s telecom regulator, which is expected to reach a decision by May 10.

Cable Industry & Friends Freak Out Over Set-Top Box Competition: It Destroys Everything

comcast-set-topIt’s all hands on deck for a cable industry desperate to protect billions in revenue earned from a monopoly stranglehold on the set-top box, now under threat by a proposal at the FCC to open up the market to competition.

While cable industry groups decry the proposal as a solution looking for a problem, at least 99 percent of cable customers are required to lease the equipment they need to watch pay television. That has become a reliable source of revenue for the industry and set-top box manufacturers, who share the $231 each customer pays a year in rental fees. Collectively that amounts to $20 billion in annual revenue. The FCC argues there is ample evidence cable operators and manufacturers are taking advantage of that captive marketplace, raising rental fees an average of 185% over the last 20 years while other electronic items have seen price declines as much as 90 percent.

With that kind of money on the line and a recent statement from the Obama Administration it fully supports FCC Chairman Thomas Wheeler’s proposal, Wall Street has gotten jittery over cable stocks — a clear sign investors are worried about the economic impact of additional competition and lower prices.

Wheeler

Wheeler

“Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget,” Jason Furman, chairman of the Council of Economic Advisers, wrote in a White House blog post.

The proposal would coordinate the establishment of an “open standard” for set-top box technology, making it possible for multiple manufacturers to enter the market and compete.

The idea is not without precedent. The cable modem marketplace uses a DOCSIS standard any manufacturer can use to launch their own modem. Once the modem is certified, broadband consumers can choose to either rent the modem from their cable operator ($10 a month from Time Warner) or buy one outright, usually for less than $70, easily paying for itself in less than one year.

But the set-top box proposal just doesn’t add up, argues Comcast — one of the strongest opponents of Chairman Wheeler’s proposal.

“A new government technology mandate makes little sense when the apps-based marketplace solution also endorsed by the FCC’s technical advisory committee is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority, or other substantial concerns raised by the chairman’s mandate,” wrote David Cohen, Comcast’s top lobbyist.

The National Cable and Telecommunications Association (NCTA) — the country’s largest cable industry lobbying group, said much the same thing.

The Roku set top streaming device.

The Roku set-top streaming device.

“By reading the White House blog, you have to wonder how they could ignore that the world’s largest tech companies — which are often touted in other Administration initiatives — including Apple, Amazon, Google, Netflix and many others are providing exactly the choice in video services and devices that they claim to want,” the NCTA wrote.

Their argument is that a competitive set-top box market has already emerged without any interference from the FCC. Time Warner Cable, for example, voluntarily offers most of its lineup on the Roku platform. Comcast’s XFINITY TV app allows subscribers to watch cable channels over a variety of iOS and Android devices. Several operators also support videogame consoles as an alternative to renting set-top boxes.

But few allow customers to completely escape renting at least one set-top box, especially for premium movie channels. Others don’t support more than one or two streaming video consoles like Roku, Apple TV, or Amazon Fire TV.

In Canada, cable customers can often buy their own set-top boxes and DVRs (known as PVRs up north) from major electronics retailers like Best Buy. For example, Shaw customers in western Canada can purchase a XG1 500GB HD Dual Tuner PVR with 6 built-in tuners and a 500GB hard drive (upgradable), which supports recording up to 6 HD shows simultaneously, for under $350. With some cable companies charging up to $15 a month for similar equipment, it would take just under two years to recoup the purchase cost. Many cable subscribers rent the same DVR for as long as five years before the hard drive starts acting up, necessitating replacement (of the drive).

Endangered?

Endangered cable network? Minority programmers say set-top box competition will destroy their networks.

Arguing the technical issues of cable box competition isn’t apparently enough of a winning argument, so the industry has drafted the support of minority cable programmers and friendly legislators who have taken Hyperbole Hill with declarations that set-top box competition will result in “the ultimate extinction of minority and special-interest programmers.”

How?

A competitive set-top box manufacturer may decide to ignore the way cable channels are now numbered on the cable dial. With everything negotiable, many programmers offer discounts or other incentives to win a lower channel number, avoiding the Channel Siberia effect of finding one’s network on a four digit channel number that channel surfers will likely never reach.

Their fear is that an entity like Google or Apple will pay no attention to how Comcast or Time Warner chooses to number its channels, and will use a different system that puts the most popular channels first.

Fees:

Fees: $34.95 for TV package, $35.90 in equipment and service fees.

But that assumes consumers care about channel numbers and not programs. Those who argue the days of linear TV are coming to an end doubt opening the set-top box market up for competition presents the biggest threat to these minority and specialty programmers. Those that devote hours of their broadcast day to reruns and program length commercials are probably at the most risk, because they lack quality original programming viewers want to see.

Hal Singer, who produces research reports for the telecom industry-backed Progressive Policy Institute, even goes as far as to suggest competitive set-top boxes will discourage telephone companies from building fiber to the home service, because they won’t get the advertising revenue for TV service they might otherwise receive from a captive set-top box market. But Singer ignores the fact Verizon effectively stopped substantial expansion of its FiOS network in 2010 (except in Boston) and AT&T now focuses most of its marketing on selling DirecTV service to TV customers, not U-verse – it’s fiber to the neighborhood service.

But Singer may be accurate on one point. If the cable industry loses revenue from set-top box rental fees, it may simply raise the rates it charges for cable television to make up the difference.

“So long as high-value customers for home video also demand more set-top boxes—a reasonable assumption—then pay TV operators can use metering to reduce the total price of home entertainment for cable customers,” Singer opines. “If this pricing structure were upended by the FCC’s proposal, economic theory predicts that pay TV prices would rise, thereby crowding out marginal video customers.”

Stop the Cap! Joins 21 Other Consumer Groups Asking FCC to Block Charter-Time Warner Cable Merger

charter twc bhOn Monday, Stop the Cap! joined 21 other public interest organizations in sending a joint letter urging the Federal Communications Commission to deny Charter’s bid to take over Time Warner Cable and Bright House Networks. Late last week, the Wall Street Journal reported that FCC Chairman Tom Wheeler may be planning to circulate a draft order approving the $90 billion merger.

The Center for Media Justice, CREDO Action, Daily Kos, Demand Progress, Free Press and Presente.org were among the media justice, Internet rights and public interest groups calling on the FCC to reject this deal, which would create a national broadband duopoly.

Together, Charter and Comcast would control nearly two-thirds of the nation’s high-speed broadband subscribers and would offer service to nearly 80 percent of U.S. households. The letter notes that this substantial increase in market power, coupled with Charter’s $66 billion in debt, would give the company both the incentive and the heightened ability to raise prices at will. This would broaden the digital divide, hitting low-income communities the hardest.

Stop the Cap! earlier filed objections to the merger with the FCC and in two states seen as critical to the deal – New York and California. In our view, no cable merger has ever resulted in better service or lower prices for consumers. Such deals deliver handsome sums to executives and shareholders while saddling customers with relentless rate hikes and no improvement in service. Charter’s history is troubling and its ability to meet its financial obligations while saddled in debt is dubious. Charter declared bankruptcy in 2009, after accumulating $21.7 billion in debt accumulated from years of mergers and consolidation efforts. As credit markets tightened up, Charter’s ability to manage its debt fell apart. Now the company is back to its old modus operandi, piling up debt buying Time Warner Cable — a much larger operation, and trying to combine it with Bright House Networks, another cable operator prominent in Florida.

Earlier this year, several of the signers delivered petitions to the FCC from more than 300,000 Americans opposing the merger, and thousands have called the agency in recent days to weigh in against the deal. Political leaders including Senate Democratic Leader Harry Reid have spoken out about the merger’s many harms.

“Too many Washington insiders have given up on challenging this deal despite its serious harms,” said Free Press policy director Matt Wood. “Instead of forecasting its chances for approval, the groups signing this letter will keep fighting to block this merger, along with the guaranteed price increases it would foist on people and communities who can least afford it.

“If Charter gets this merger approved, nothing will stop it from raising its rates for high-speed broadband and video customers who have nowhere else to turn. Temporary promises and weak conditions aren’t going to preserve competition and choice in the long run, and they’re not going to do anything to stop these price hikes. The FCC is charged with promoting the public interest, and there’s no way in which this merger benefits the public. Higher prices and fewer choices won’t help anyone but the companies pitching this bad bargain.”

“If its takeover of Time Warner Cable goes through, Charter will have a broadband footprint as big as Comcast’s,” said Demand Progress executive director David Segal. “This would turn an industry that’s already too concentrated into a duopoly, paving the way for higher rates today and the eventual formation of a new cross-sector behemoth that controls content production and delivery.

“Americans increasingly understand that corporate concentration is jacking up prices and lowering quality for all sorts of basic goods and services. At a hearing of a Senate antitrust subcommittee this month, lawmakers made it clear that they see companies that are allegedly too big to fix in many industries, not just the banking sector. This FCC must now decide whether it wants to stem the swelling tide of concentration, or enable these monopolies.”

Free Press and Stop the Cap! contributed elements of this story.

FCC Prepares to Approve Charter-Time Warner Cable-Bright House Merger

mergerDespite clamoring for more competition in the cable industry, FCC chairman Thomas Wheeler is reportedly ready to circulate a draft order granting Charter Communications’ $55 billion dollar buyout of Time Warner Cable, with conditions.

The Wall Street Journal reported late last night the order will be reviewed by the four other commissioners at the FCC and could be subject to change before coming to a vote.

Wheeler’s order is likely to follow the same philosophical approach taken by New York State’s Public Service Commission — approving the deal but adding temporary consumer protections to blunt anti-competition concerns.

Most important for Wheeler is protecting the nascent online video marketplace that is starting to threaten the traditional cable television bundle. Dish’s Sling TV, the now defunct Aereo, as well as traditional streaming providers like Hulu and Netflix have all been frustrated by contract terms and conditions with programmers that prohibit or limit online video distribution through alternative providers. The draft order reportedly would prohibit Charter from including such clauses in its contracts with programmers.

fccCritics of the deal contend that might be an effective strategy… if Charter was the only cable company in the nation. Many cable operators include similar restrictive terms in their contracts, which often also include an implicit threat that offering cable channels online diminishes their value in the eyes of cable operators. Programmers fear that would likely mean price cuts as those contracts are renewed.

Wheeler has also advocated, vainly, that cable operators should consider overbuilding their systems to compete directly with other cable operators, something not seen to a significant degree since the 1980s. Cable operators have maintained an informal understanding to avoid these kinds of price and service wars by respecting the de facto exclusive territories of fellow operators. Virtually all cable systems that did directly compete at one time were acquired by one of the two competitors by the early 1990s. It is unlikely the FCC can or will order Charter to compete directly with other cable operators, and will focus instead on extracting commitments from Charter to serve more rural and suburban areas presently deemed unprofitable to serve.

gobble-til-you-wobbleMost of the other deal conditions will likely formalize Charter’s voluntary commitments not to impose data caps, modem fees, interconnection fees (predominately affecting Netflix) or violate Net Neutrality rules for the first three years after the merger is approved. As readers know, Stop the Cap! filed comments with the FCC asking the agency to significantly extend or make permanent those commitments as part of any approval, something sources say may be under consideration and a part of the final draft order. Stop the Cap! maintains a cable operator’s commitment to provide a better customer experience and be consumer-friendly should not carry an expiration date.

It could take a few weeks for the draft order to be revised into a final order, and additional concessions may be requested, a source told the newspaper.

Meanwhile, the California Public Utilities Commission (CPUC) is still reviewing the deal. News that the FCC is prepared to accept a merger is likely to dramatically reduce any chance California regulators will reject the merger out of hand. Stop the Cap!’s Matthew Friedman is continuing discussions with the CPUC to bolster deal conditions to keep usage caps, usage-based billing, and other consumer-unfriendly charges off the backs of California customers. New York customers will automatically benefit from any additional concessions California gets from Charter, as the PSC included a most-favored state clause guaranteeing New Yorkers equal treatment. Any conditions won in California and New York may also extend to other states to unify Charter’s products and services nationwide.

An independent monitor to verify Charter is complying with deal approval conditions is likely to be part of any order approving the transaction, although critics of big cable mergers point out Comcast has allegedly thumbed its nose at conditions imposed as part of its acquisition of NBCUniversal, and only occasionally punished for doing so.

FCC Chairman Proposes Expanding Lifeline to Include Broadband

Phillip Dampier March 8, 2016 Consumer News, Public Policy & Gov't 2 Comments
universal service

The Universal Service Fund is funded by telephone ratepayers. (Image: Free Press)

A $9.25 a month subsidy to allow low income Americans to get basic telephone service would be expanded to include broadband service if a majority of FCC commissioners adopt changes proposed today to the Lifeline program.

A draft plan to expand the 30-year old Lifeline federal subsidy intended originally for landlines to include Internet access was released this morning by FCC chairman Thomas Wheeler and Commissioner Mignon Clyburn. Under the proposal, those eligible for federal aid programs like Medicaid will qualify for a discount, which can be applied to a landline, mobile phone, or broadband service.

“Internet access has become a prerequisite for full participation in our economy and our society, but nearly one in five Americans is still not benefiting from the opportunities made possible by the most powerful and pervasive platform in history,” Wheeler and Clyburn wrote in a joint blog post. “Internet access has become a pre-requisite for full participation in our economy and our society, but nearly one in five Americans is still not benefiting from the opportunities made possible by the most powerful and pervasive platform in history. […]By modernizing the FCC’s Lifeline program, we will do better.”

Republicans immediately pounced on the proposed program, claiming past experiences with waste, fraud, and abuse in FCC programs for the poor have already cost ratepayers a great deal of money subsidizing unqualified consumers with multiple landlines and cell phones. They propose not expanding the program further until more safeguards were put in place to prevent more fraud.

Wheeler

Wheeler

Wheeler and Clyburn appeared ready for that objection, noting the plan would set up an independent clearinghouse to manage customers’ eligibility and approval, removing that responsibility from providers that critics charge have a vested interest in approving as many new customers as possible.

But some still object to the plan, noting Lifeline’s original purpose has been dramatically altered since it was first conceived in 1985 as a program to guarantee low-cost landline service for poor Americans, and efforts to justify its relevance by expanding it to include cell phones allowed fraudsters to game the system.

After the Bush Administration approved a plan to expand Lifeline to include wireless phone subsidies, providers sprung up almost immediately offering free or low-cost cell service using a business plan based entirely around the federal subsidy. Many providers signed up customers later found to be ineligible for service because they already received subsidized landline or mobile service from another provider. Getting rid of duplicate or ineligible accounts took almost four years in some cases.

Today, about 12 million American households receive the $9.25 subsidy. Federal officials estimate up to five million more households will eventually apply for the broadband subsidy, which would boost the Lifeline budget from $1.5 billion to $2.25 billion. The program is funded by telephone ratepayers, as part of the Universal Service Fund surcharge on consumers’ phone bills. For Mr. Wheeler and Ms. Clyburn, the cost is well worth it.

“We can recite statistics all we want, but we must never lose sight of the fact that what we’re really talking about is people – unemployed workers who miss out on jobs that are only listed online, students who go to fast-food restaurants to use the Wi-Fi hotspots to do homework, veterans who are unable to apply for their hard-earned benefits, seniors who can’t look up health information when they get sick,” the two FCC officials wrote.

As a practical matter, the $9.25 subsidy would likely most benefit customers enrolled in voluntary Internet discount programs offered by some cable and telephone companies, often at prices ranging from $9.95-$15 a month. Some skeptics believe the program will prove of limited benefit where Internet service costs $40+ a month. The cost of service is the biggest barrier for low-income Americans. The FCC estimates fewer than half of households with incomes less than $25,000 annually have Internet access at home. Reducing the bill to $30 a month may not be enough.

The proposal is expected to win approval on a future party line vote at the FCC — three Democrats in favor, two Republicans opposed.

FCC Chairman Suggests He May Not Resign After President Obama Leaves Office

Phillip Dampier March 2, 2016 Public Policy & Gov't No Comments
Wheeler

Wheeler

FCC chairman Thomas Wheeler has not promised to vacate his position as chairman after a new president takes office in January 2017.

It has been customary for the appointed head of the FCC to automatically resign as a new president takes office, but Wheeler is keeping his options open.

This was not the answer Senate Commerce Committee chairman John Thune (R-S.D.) was expecting to hear at today’s FCC oversight hearing.

Wheeler responded he was not ready to promise to cede the chairmanship and it would not be wise to give an “ironclad commitment” at this time.

If Wheeler does not resign, he can stay as chairman of the FCC until his term expires in January 2018, potentially serving as a thorn during the first term of a possible Trump presidency.

Sen. Bill Nelson (D-Fla.) noted it was unlikely a President Trump would renominate him on his own.

 

Sanders, Warren Raise Doubts About Charter-Time Warner Cable-Bright House Merger

Sens. Sanders and Warren

Sens. Sanders and Warren

Democratic presidential hopeful Sen. Bernie Sanders (Ind.-Vt.) has expressed serious doubts about the claimed consumer benefits of a multi-billion dollar cable company merger between Charter Communications, Time Warner Cable, and Bright House Networks.

In a joint letter with Sens. Al Franken (D-Minn.), Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.), Sanders told FCC Chairman Tom Wheeler and Attorney General Loretta Lynch the deal would create a “nationwide broadband duopoly, with New Charter and Comcast largely in control of the essential wires that connect most Americans to how we commonly communicate and conduct commerce in the 21st century.”

The senators explained that “broadband service is not a luxury; it is an economic and social necessity for consumers and businesses.”

The five Democrats believe the merger could have negative effects on consumer choice, competition, and innovation in broadband and online video. With Comcast and New Charter controlling at least two-thirds of the high-speed broadband lines in the country, Sanders and his colleagues are concerned this will allow Comcast and New Charter to raise rates while reducing broadband innovation, allowing the United States to fall even further behind other industrialized nations with superior broadband.

The senators asked the Department of Justice and the FCC to carefully evaluate how the proposed deal could impact the marketplace.

“New Charter must not only prove that this deal would not harm consumers, but they must also demonstrate that it would actually benefit them and promote the public interest,” the senators argued.

This week, New Jersey regulators approved the merger transaction in that state, leaving California as the last major challenge for Charter executives. Federal regulators are not expected to rule on the deal until the spring or summer.

House Democrats Battle Republicans Over Broadband Rate Regulation Bill

Kinzinger

Kinzinger

Republican-sponsored H.R. 2666 — the “No Rate Regulation of Broadband Internet Access Act” — is drawing opposition from House Democrats because the measure, if it becomes law, could grant cable and telephone companies broad permanent exemption from oversight and consumer protection laws.

The bill, introduced last summer by Rep. Adam Kinzinger (R-Ill.), consists of a single sentence:

Notwithstanding any other provision of law, the Federal Communications Commission may not regulate the rates charged for broadband Internet access service (as defined in the rules adopted in the Report and Order on Remand, Declaratory Ruling, and Order that was adopted by the Commission on February 26, 2015 (FCC 15–24)).

Eshoo

Eshoo

Democrats worry despite the brevity of the bill, its language is broad and sweeping, and could be interpreted by the courts to grant deregulation and freedom from oversight to telecommunications providers that already rank at the bottom of customer satisfaction scores. It would also undercut the FCC’s reclassification of broadband from an information service to a telecommunications service, subject to Title II regulations, which gave the FCC increased authority to oversee the broadband industry.

Rep. Anna Eshoo (D-Calif.) has signaled her likely opposition to the Republican bill, noting the proposed law could “eviscerate the FCC’s authority to protect consumers against truth in billing practices and discriminatory data caps; to ensure broadband availability through [the Universal Service Fund] and E-Rate; to address rate-related issues in merger reviews; to ensure enforcement against paid prioritization; and other essential consumer protections.”

Several Democrats on the House Communications Subcommittee are introducing amendments that would likely keep Republican language prohibiting the FCC from directly regulating broadband prices, but also protect the power of the FCC to regulate billing practices, data caps and usage pricing, Net Neutrality, universal service requirements, merger reviews, and discriminatory and/or unfair business practices.

The Democrats are likely to have an uphill battle in a Republican-controlled House. Constituents may have more influence expressing their opposition to H.R. 2666 by reaching out to Rep. Kinzinger and the 18 Republican co-sponsors of the measure:

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  • Kyle: It has nothing to do with consumer choice on broadband. It has to do with unelected bureaucrats in the FCC, who are not accountable to congress (the p...
  • Bryan: I would never support anyone who directly or indirectly would want to limit consumer choices for internet. If a municipality can provide faster and c...
  • Kyle: The FCC is not a federal court. They should not be able to overturn state or local law. This has nothing to do with municipal broadband. It has to do ...
  • Johanna D.: Moved out of state for my job in March, was waiting for a final verizon bill, and received 3 bills from fronteir all dated the same day with different...
  • Clinton Kirk: It's not that Sen. Cruz is against the expansion of Broadband in growing communities. The issue is that it should be the States decision and not some...
  • Dahlia: If you do let me know, I will join. They try to say I used 865GB in one month and charged me an extra 20$ for overages. That is BS, there is no way in...
  • Sherice Cuadra: Timely article ! I learned a lot from the facts - Does anyone know if my business might be able to grab a blank a form copy to work with ?...

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