The EU-U.S. Terrorist Finance Tracking Program (TFTP) should be suspended, terminated or replaced by a different agreement because of allegations the National Security Agency accessed personal banking data held in the Society for Worldwide Interbank Financial Telecommunication (SWIFT) database in Europe, said European Parliament members (MEPs) in dueling motions for resolutions filed Wednesday. The resolutions split along the same party lines as last week’s debate in the Civil Liberties, Justice and Home Affairs (LIBE) Committee (CD Oct 11 p7). They will be voted on next week, MEP Claude Moraes, of the Socialists and Democrats (S&D) and U.K., told us Thursday. However, he said, lawmakers genuinely don’t know which version will be adopted; and whichever is approved will be “merely symbolic” because Parliament lacks the power to take action on the TFTP. Meanwhile, Parliament’s probe of U.S. spying comes to Washington this month.
Notable CROSS rulings
Implementation of President Barack Obama’s cybersecurity executive order is on an indefinite hold at most federal agencies because of the government shutdown, the effects of which vary, said industry observers. The order directed the Department of Homeland Security and National Institute of Standards and Technology to execute most provisions, though the departments of Defense and Treasury, U.S. intelligence agencies and sector-specific agencies also hold implementation responsibilities (CD Feb 14 p1). Much of the public attention related to the order has focused on NIST’s work with critical infrastructure industries to develop the voluntary Cybersecurity Framework, but observers said development of the framework will be almost entirely unaffected by even an extended shutdown. Other parts of the order will be more adversely affected by further delays, they said.
It’s clear that the Safe Harbor agreement for transfer of personal data doesn’t offer any protection against mass U.S. surveillance of Europeans’ telephone and Internet traffic and that the European Commission should be directed to suspend it until changes are made, the author of an upcoming European Parliament Civil Liberties, Justice and Home Affairs (LIBE) Committee report on the spying said Monday. Data protection officials from Germany, France and the European Data Protection Supervisor, however, all said Safe Harbor needs to be reworked rather than scuttled but, more importantly, a new data protection regulation must be approved as quickly as possible. But rapporteur Claude Moraes, of the Socialists and Democrats and U.K., said at session six of the LIBE probe that Safe Harbor is useless against the U.S. Patriot Act and Foreign Intelligence Surveillance Act (FISA). Committee members criticized Justice, Fundamental Rights and Citizenship Commissioner Viviane Reding for not appearing at the hearing.
A Minority Media and Telecommunications Council study on the impacts of cross-ownership was negligent when it erroneously identified stations as female- or minority-owned that weren’t, said Free Press in an ex parte letter released Tuesday (http://bit.ly/18WuzaD). MMTC had said it was using data from the FCC database to identify station owners (CD Aug 22 p14), but Free Press said checking the commission’s data and verifying the station’s true owners “required less than an hour” to complete. “Negligence on MMTC’s part does not constitute a Free Press error, or lack of merit in our objection,” said Free Press. “That MMTC’s methodology was deeply flawed indicates that its conclusions cannot justify any changes to the Commission’s ownership rules,” Free Press said. Free Press also took issue with MMTC allegations that Free Press has called the study biased. “At no time has Free Press said that MMTC coached respondents on how to answer survey questions. We merely noted that any conflicts of interest or potential conflicts should have been disclosed,” Free Press said. The ex parte also reiterated Free Press’s earlier complaints about the study’s peer review process and the lack of info about respondents provided by MMTC (CD Aug 8 p3). “We do not deny that MMTC made an effort,” said Free Press. “However, that effort has fallen short of its potential and failed to produce valuable conclusions.” MMTC President David Honig said he was still reviewing Free Press’s comments.
The “Connected Continent” telecom overhaul package approved Wednesday by the European Commission would enshrine net neutrality into law, bar incoming roaming charges and require governments to coordinate their spectrum assignment plans. If adopted by the European Parliament and Council, the EC said it will be a major step toward creating a single European telecom market that could one day include an EU e-communications regulator. The proposal, subject of intense debate as various draft documents leaked, is likely to face strong opposition, based on early criticism. Before the final version emerged Wednesday, it was attacked by the Fiber to the Home (FTTH) Council Europe, German Association of Telecommunications and Value-Added Service Providers (VATM) and French citizens’ advocacy group La Quadrature du Net.
The European Commission isn’t looking to create a pan-EU telecom regulator or Europe-wide spectrum licenses in its upcoming legislative package on a single telecom market, it said Monday. The proposed measure, due out Wednesday, has been floating around in various leaked drafts for months. Among other things, the EC will propose to: (1) Help operators who want to offer cross-border services by providing a one-stop authorization shop. (2) Remove inconsistent obligations for operators that provide services in more than one country by giving the EC more oversight over national regulatory decisions. (3) Standardize fixed access products such as virtual unbundled local access and ethernet leased lines, to make it easier for market entrants. (4) Create a more coordinated approach to spectrum management, with the EC having new power to review national assignment procedures and timetables. (5) Allow infrastructure and spectrum sharing and spectrum trading, and promote the use and deployment of Wi-Fi and small cells to increase capacity. (6) Harmonize fully consumer protection laws and end misleading touting of Internet speeds. The package will also guarantee net neutrality by putting an end to blocking and throttling, while giving operators the option to offer higher speeds or better quality according to user needs. The EC will also push mobile operators to create by next year EU-wide roaming bundles and end charges for incoming roaming calls, it said. The proposals in the latest leaked draft sparked criticism over the weekend from independent telecom consultant Innocenzo Genna, who accused Digital Agenda Commissioner Neelie Kroes of trying to change the “fundamental paradigm of net neutrality.” The final package is likely to have net neutrality provisions that may substantially affect the balance between network operators and ISPs, with a big impact on consumers, Genna wrote on his radiobruxelleslibera blog (http://bit.ly/18J2d5s). Kroes appears ready to allow network providers including ISPs to arbitrarily discriminate and charge for Internet services “with the sole scope to privilege some Internet services instead of others,” and without justification, he said. Dominant players will be able to extract money from the over-the-top business and make up for declining margins, he said. Consumers will then select services not only on the basis of their intrinsic features but on the cost of the Internet connectivity needed to access them, he said. For streaming music, users will be naturally induced to opt for free-connectivity services even if they are not as good in terms of quality or variety of offers, he said. The problem already exists because there are no rules barring European ISPs from differentiating connectivity costs to discriminate against Internet services, he said. But ISPs “have been cautious” and few have discriminated out of fear of regulation, he said. The single market proposal will overturn existing national laws on net neutrality and prevent governments from ever intervening on the issue again, he said. The only obstacle for network providers will be antitrust rules, which don’t work well in oligopolistic markets like the telecom sector because collective dominance is hard to enforce, he said. The potential problem could be solved if the final package sets a clear non-discrimination obligation on ISPs and other network providers that bars them from differentiating access prices unless justified by specific circumstances such as quality, speed or capacity, he said. Once operators are free to arbitrarily charge for Internet services, they'll stop innovating, he said.
If a panel of appellate court judges decides the FCC has no authority to enforce its open Internet order, another federal agency could take its place, several industry officials said in recent interviews. With its expertise in consumer protection and antitrust issues, the FTC is ideally positioned to take over if the net neutrality rules fall, industry and FTC officials have said publicly and in interviews. It’s by no means a common assumption. Many fear that, with its more case-by-case approach to resolving competitive harms, the FTC would be an inadequate protector of an open Internet.
Former FCC Commissioner Robert McDowell said he has never wavered in his belief he was right to vote “no” on a net neutrality order when it was before the commission in December 2010. With oral argument on the order scheduled for the U.S. Court of Appeals for the D.C. Circuit Monday, the American Enterprise Institute held a webinar late Thursday afternoon, following an earlier discussion hosted by the New America Foundation. AEI panelists offered views that differed sharply from those at the NAF event (CD Sept 6 p3).
Objections to Local TV’s request to transfer control of three TV stations to Dreamcatcher Broadcasting under shared service agreements (SSAs) as part of Local’s proposed $2.73 billion sale of its TV stations to Tribune are “philosophical” rather than “grounded in the specifics of the proposed transaction,” said Tribune in opposition comments filed this week alongside similar ones from Local and Dreamcatcher. Free Press and Put People First filed a petition to deny the sale because of market overlaps between newspapers and TV stations in Hampton Roads, Va., and Wilkes-Barre, Pa., which they say conflicts with FCC cross-ownership rules (CD Aug 21 p22). Tribune, Dreamcatcher and Local said the arguments raised by the consumer groups are already being considered by the FCC in its ownership proceeding, and they can’t be considered as part of an individual transaction. “Petitioners’ attempt to secure changes in the Commissions’ multiple ownership rules through private litigation also is disingenuous,” said Tribune. The groups had also attacked Dreamcatcher’s part in the transaction, calling it a “shell corporation” that will only own the stations on paper while Tribune provides them with services. However, Tribune said the FCC has established a 15 percent threshold for shared services -- if a company provides less than that amount of a station’s services, “joint operating arrangements are presumptively non-attributable, irrespective of the back-office, technical or operational services they entail,” said Tribune. The FCC also can’t make approval of the Tribune merger or the Dreamcatcher/Local transaction contingent on the outcome of a future rulemaking to eliminate the UHF discount, said Local. “Tribune, Dreamcatcher, and Local TV entered into their respective transactions in good faith reliance on Commission Rules in effect at the time of filing,” said Tribune’s filing. Dreamcatcher also argued that the public interest groups don’t have standing to oppose the transfer of one of the stations, WNEP-TV in Scranton, Pa. Though the groups submitted testimonials from viewers affected by the deal, Dreamcatcher said no testimonials from viewers of WNEP were included. Therefore, the groups’ petition to deny “should be dismissed with respect to that application,” said Dreamcatcher’s filings. Free Press and Put People First didn’t comment.
The presence of local cross-ownership is “seldom a material factor” in determining the value of broadcast stations, according to testimony from two broadcast station valuation professionals submitted to the FCC Wednesday by the Minority Media and Telecommunications Council (http://bit.ly/18nUc4z). One indication that cross-ownership hurts other stations in the same market would be a decline in those stations’ value, said MMTC President David Honig in the ex parte filing. “The presence of a cross-owned combination does not impact our discounted cash flow model that is the cornerstone of a broadcast valuation,” said Peter Bowman, of Bowman Valuation Services and Robert Maccini, director-Media Services Group, in an attachment to the MMTC filing (http://bit.ly/1dqPfiA). Cross-ownership combinations are instead noted in an accompanying narrative report, they said. The valuation professionals also weighed in on MMTC’s cross-ownership study, agreeing with its conclusions that cross-ownership in most instances “does not operate as a material impediment to minority and female” broadcast owners. “A modest relaxation of the newspaper-broadcast station cross-ownership rule, such as the proposal by former [FCC] Chairman [Julius] Genachowski that is under consideration by the FCC now, would not significantly influence the value of broadcast stations in most instances,” said Bowman and Maccini.