The FCC imposed conditions on a waiver it gave New York to use $170.4 million in Connect America Fund auction money for the state's own auction of rural broadband subsidies, but Commissioner Mike O'Rielly still partially dissented due to concerns (see 1701260047). The commission will maintain control over the CAF Phase II subsidy funds at all times, including by specifying where they can be awarded, limiting the amounts, and ensuring recipients comply with CAF oversight, said the order issued Thursday in docket 10-90. It conditioned the waiver on New York ensuring any state auction rule modifications are consistent with federal communications law, allow for the provision of CAF funds only to eligible entities, and don't conflict with other FCC requirements. The order said a core FCC objective is to ensure support doesn't go to areas where unsubsidized competitors already are providing qualifying broadband/voice services, and it ordered the Wireline Bureau to publish an updated list of such unserved census blocks in New York to determine which would be eligible for the CAF support. The FCC said it would condition its funding on New York committing to provide at least the same amount of support in subsidized areas, noting the state intends to make at least $200 million available. The commission also set reserve price restrictions on the federal distributions; and it waived CAF II auction broadband performance tier requirements but clarified that New York recipients of federal funding would face FCC public service obligations to ensure the rural services are reasonably comparable to urban services. In a statement, O'Rielly said he appreciated the FCC oversight and commended Chairman Ajit Pai "for his willingness to commit to pull the plug on this whole effort if it is not consistent with our universal service objectives." But O'Rielly said he was concerned the funding wouldn't be used efficiently, and said New York is a state that diverts 911 fees to unrelated purposes: "We should have received assurances that New York would cease this disgraceful practice." Without New York assurances of a "multi-round reverse auction or scarcity to drive down bids," he said the program could overpay for deployment in some areas. He voiced concern the waiver would also reduce competitive pressures in the FCC's nationwide CAF II auction.
Pennsylvania Public Utility Commissioners raised jobs and competition concerns Thursday before voting 5-0 to approve Verizon/XO Communications without conditions. The order is the last regulatory OK the deal needed, and a Verizon spokesman said the company aims to close the purchase of XO “in the coming days.” While voting to allow the deal, Commissioner David Sweet said he worried about not including a condition to protect jobs of Pennsylvania employees after New York and New Jersey required Verizon to keep the jobs for four years (see 1701240051). “I fear that that places a bull's-eye on the backs of Pennsylvania employees since we are neighbors of New York and New Jersey, and we apparently are not going to impose the similar condition that I would have liked to have seen us done,” Sweet said. Commissioner John Coleman said he was sympathetic to Sweet’s employment concern, but didn’t want to “handcuff” the companies: “There is a higher goal here, and that is to preserve the company itself.” Chairwoman Gladys Brown said she would have supported conditions on business data services: “Adding Pennsylvania-specific conditions regarding its Internet Protocol interconnection agreements, DS1 and DS3 loop circuits and the current federal requirement to provide the functional equivalent of DS1 and DS3 loops whenever copper network facilities are retired could have gone a long way in strengthening the commission’s finding of affirmative public benefits.”
The FCC should allow the Department of Homeland Security to be the lead agency on cybersecurity, said Shane Tews, visiting fellow at the American Enterprise Institute’s Center for Internet, Communications and Technology Policy, in a Thursday blog post. The FCC Public Safety Bureau issued a white paper last week, before former Chairman Tom Wheeler's resignation, saying the commission can’t rely on organic market incentives alone to reduce cyber risk within the communications sector. The federal government needs to assert “appropriate” regulatory oversight over ISPs’ cybersecurity practices in the absence of clear market incentives to drive improvements, the white paper said (see 1701180082). Tews and others said they don't believe new FCC Chairman Ajit Pai will consider making the paper's proposals commission policy (see 1701250077). Congress would do well to instead consider House Homeland Security Committee Chairman Michael McCaul's, R-Texas, planned DHS Reform and Improvement Act as the “best way for the government to facilitate information sharing in this way,” Tews said. McCaul said this month he planned to soon reintroduce the bill, which would reorganize DHS' National Protection and Programs Directorate as the Cybersecurity and Infrastructure Protection Agency in a bid to elevate DHS' cybersecurity focus (see 1701050073). Pai has said other agencies have better legal standing and expertise to handle cybersecurity issues than the FCC, and the commission should only be a consulting agency, Tews said. “Establishing a systematic, reliable reporting process and a trusted repository for information-sharing across industries and the government would be a step in the right direction,” she said. “Now is the time to embrace the importance of the internet for our digital economy and to acknowledge the risks that come with the rewards.”
Municipal broadband tensions flared in state legislatures as sessions got underway this month. Lawmakers in multiple states have introduced or said they will propose bills -- either to restrict or promote local networks. Community broadband supporters said in interviews this week they expect more. One bill in Virginia to reign in local governments peaked tensions between communities and tech heavyweights. Also this month, a Missouri lawmaker proposed increased state restrictions, and Colorado legislators introduced a repeal of an existing ban. Community broadband supporters predict legislative activity this year in North Carolina and Tennessee, states affected by the FCC loss at the U.S. Court of Appeals for the 6th Circuit.
The FCC Public Safety Bureau’s white paper on communications sector cybersecurity regulation is highly unlikely to influence the commission’s cybersecurity policies under new Chairman Ajit Pai, said industry lawyers and lobbyists in interviews. The white paper, which the FCC issued two days before former Chairman Tom Wheeler resigned, said the commission can’t rely on organic market incentives alone to reduce cyber risk. The federal government needs to assert “appropriate” regulatory oversight over ISPs’ cybersecurity practices in the absence of clear market incentives to drive improvements, said now-former Public Safety Bureau Chief David Simpson in the white paper (see 1701180082). The agency issued various other actions in the final days of Wheeler's tenure (see 1701240020).
Samsung's promised report on the Galaxy Note7 fiasco in a Monday news conference in Seoul includes an "enhanced 8-point battery safety check" it says will address safety "from the component level to the assembly and shipment of devices." The checklist was put in place to address issues with lithium-ion batteries used in two waves of Note7 devices in second half 2016 that led to a double product recall by the Consumer Product Safety Commission, discontinuation of the product, a Federal Aviation Administration warning and a hit to carrier and retailer sales.
Republican FTC Commissioner Maureen Ohlhausen stopped short Monday of confirming speculation that President Donald Trump will appoint her as the commission's acting or permanent chairwoman, as many expect. She laid out her vision during the State of the Net conference for a majority GOP FTC, which she said should shift its focus to investigating “real” instead of “speculative” harms to consumers. Trump is expected to at the least appoint an acting FTC chair when outgoing Chairwoman Edith Ramirez resigns Feb. 10 (see 1701200002). Ramirez's planned resignation will leave the FTC with three vacancies and a 1-1 Democratic-Republican split. Experts say the agency can continue to function effectively under those circumstances (see 1701130030).
Outgoing FCC Chairman Tom Wheeler warned against attempts to "gut" the agency, including by moving core telecom oversight functions to the FTC. He also defended the commission's actions on net neutrality, broadband reclassification, privacy, zero rating, the incentive auction, USF changes and other issues. He was interviewed on C-SPAN's The Communicators (scheduled to air Saturday and Monday and posted here), the latest in a series of exit interviews and farewell appearances (see 1701190069 and 1701130064) before Donald Trump's inauguration as president on Friday, Wheeler's last day at the agency.
Industry lobbyists and officials told us Friday that Commissioner Ajit Pai, the FCC's senior Republican, is being tapped to lead the agency as chairman on a permanent basis. Spokespeople for President Donald Trump didn’t confirm the reports. The FCC was reduced to three commissioners Friday, as expected, with Tom Wheeler stepping down as chairman and no longer listed on the FCC website among commissioners. Pai has been seen as nearly certain to become chairman on at least an interim basis, and personally met with Trump in New York City less than a week before Friday's inauguration.
FCC staff approved video relay service interoperability and portability standards for services, equipment and software. Acting on delegated authority, the Consumer and Governmental Affairs Bureau also issued a Further NPRM seeking comment on the scope of the application of a technical standard for user equipment and software, said the item in docket 10-51 listed in Wednesday's Daily Digest. Sorenson Communications, the largest VRS provider, criticized the action. Previous interoperability and portability requirements were intended to allow VRS users to make and receive calls through any provider without changing access technologies, and to ensure users can make point-to-point calls to all other VRS users, regardless of the default providers, the item said. In an August FNPRM, the bureau proposed adopting the technical standards of both a Session Initiation Protocol (SIP) Forum task force and the successor Relay User Equipment (RUE) Forum (see 1608050031). The order this week incorporated the SIP interoperability standard into FCC rules, effective 120 days after publication in the Federal Register, as requested by VRS providers. It said consumer groups supported incorporating the RUE standard into the rules but providers said imposing it on all hardware and software would impose major costs. The bureau said it incorporated the RUE standard "on a limited basis that preserves providers’ flexibility to continue offering user equipment and software that does not conform to the RUE Profile in all respects, pending further determinations in this proceeding." It set a compliance date of one year after FR publication and teed up related questions in the new FNPRM. "The Bureau went far beyond what was necessary and has adopted what providers all told them were unneeded and costly requirements without any cost/benefit analysis," emailed Sorenson Chief Marketing Officer Paul Kershisnik. "The industry is already implementing interoperability standards, and has developed a more cost-effective means of ensuring consumers can move their contacts from one provider to another. We will be urging the Commission to review and correct these midnight regulations." Consumer advocates and Republican Commissioners Ajit Pai and Michael O'Rielly didn't comment.