Tuesday, June 22, 2010

EarthLink Files Opposition to Comcast-NBCU Merger; Seeks to Enhance Consumer Choice of Internet Services

PRNewswire -- EarthLink, Inc. (NASDAQ:ELNK) , one of the nation's leading Internet service providers, today filed at the Federal Communications Commission a Petition to Condition or Deny the proposed merger of Comcast Corporation and NBC Universal. (See http://www.earthlink.net/go/merger for EarthLink's Petition.)

EarthLink believes the transaction would result in Comcast engaging in a range of anti-competitive actions that will reduce consumer choice, restrict content diversity, and interfere with Internet competition. To remedy these harms, EarthLink proposed the FCC adopt a condition requiring Comcast to offer wholesale standalone broadband access to independent Internet service providers. EarthLink's successful and long-standing wholesale relationship with Time Warner Cable demonstrates that merger conditions implementing competitive broadband access can enhance consumer choice and create commercial benefits for all parties.

"The access condition that EarthLink proposes today for the Comcast-NBCU merger will be a win for consumers and a win for online competition," said EarthLink Chairman and Chief Executive Officer Rolla Huff. "The condition essentially enables Comcast customers to 'break the bundle' and purchase only the services they need or want. We look forward to working with the FCC and the U.S. Department of Justice to ensure the transaction results in greater consumer choice and competition."

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Study Says Regulators Should Preserve Pricing Flexibility for Broadband Service to Help Close Digital Divide

/PRNewswire/ -- A new study released today by the Georgetown Center for Business and Public Policy looks at how broadband pricing plans that recover a greater share of costs from the heaviest users, including high-bandwidth consuming content providers, would help the United States achieve universal broadband adoption sooner and accelerate the end of a digital divide across income, racial and ethnic lines. The study found that such a digital divide should end before the end of this decade, if Internet Service Providers (ISPs) apply flexible pricing strategies.

The paper, by economists Robert J. Shapiro, Former Under Secretary of Commerce for Economic Affairs, and Senior Fellow at the Georgetown University Center for Business and Public Policy, and Kevin A. Hassett, Director of Economic Studies at the American Enterprise Institute, notes that the exploding demand for bandwidth, primarily from video applications, will require that the ISPs invest several hundred billion dollars to expand the broadband infrastructure. The study also finds that the pricing approaches used to fund those investments could largely determine the pace of broadband adoption over the next decade. The study utilizes findings from the FCC's National Broadband Plan to update an earlier analysis released last fall.

"Pricing models that recover costs equally, on a per-household basis to all subscribers, will substantially slow adoption," Shapiro and Hassett find. "However, a more flexible pricing model that recovers a greater share of these additional costs from high-bandwidth consumers or content providers would keep most subscribers' fee low and facilitate broadband adoption by all groups of Americans. Under this model, effective universal adoption should be achieved by all racial and ethnic groups by 2018 or 2019."

Shapiro and Hassett say pricing models are critical, because price is the largest factor determining whether a household subscribes to broadband. They observe that given the additional investments required to accommodate fast-rising demand for bandwidth and to avoid Internet congestion, the prevailing flat-fee pricing plans which charge the same fee for both modest and very heavy use of bandwidth will slow how fast lower-income Americans subscribe to broadband services. The paper finds that under the flat-fee pricing approach, fewer than 85 percent of Americans will have home broadband service by the end of this decade - well short of the 100 percent goal set by President Obama. For African Americans and Hispanics, who account for a disproportionate share of lower-income households, adoption rates would be 82 and 83 percent, respectively, if the cost of additional investment is borne equally by all consumers.

"Small price increases for current broadband users, especially middle-income and high-income subscribers, are unlikely to drive them back to dial-up. However, higher prices may have a much larger impact on the Internet subscription choices of households currently without service or using dial-up. Moreover, the evidence suggests that lower-income households are particularly sensitive to higher broadband prices," the study says.

The paper assumes that high bandwidth users, whose bandwidth consumption is fueling the growth of infrastructure investment needs, are relatively insensitive to price increases. It also observes that if that assumption does not hold, the largest share of the additional infrastructure investment could be funded through higher fees from the heaviest bandwidth-consuming content providers.

According to Shapiro and Hassett, "The same narrowing differences in broadband adoption would occur if the 80 percent share of the additional investment is passed along in higher charges to bandwidth-intensive content or applications providers, rather than their consumers. Some such approach would be the most efficient way to ensure that very high-bandwidth users do not drive up the costs of basic broadband service for everyone else."

The authors argue that as a matter of national social policy, average users should not be required to subsidize high-bandwidth consumers and content providers, as they have to date.

"Government policy should protect the ability of ISPs to employ flexible pricing strategies and ensure that government does not, even inadvertently, effectively compel pricing practices that would perpetuate differences in broadband adoption by income, race or ethnicity," added Shapiro and Hassett.

To access the complete study, visit the following link: http://tinyurl.com/2blzrv6. For additional information or media inquiries, please contact Andrea Salvatore by e-mail at cbpp@msb.edu.

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Monday, June 21, 2010

Fraudulent Telephone Calls Allowing Fraudsters Access to Consumer Financial and Brokerage Accounts

The FBI Newark Divisionreleased a warning to consumers concerning a new scheme using telecommunicationsdenial-of-service (TDoS)attacks.

The FBI determined fraudsters compromised victim accounts and contacted financial
institutions to change the victim profile information (i.e. email addresses, telephone
numbers and bank account numbers).

The TDoS attacks used automated dialing programs and multiple accounts to overwhelm
victims' cell phones and land lines with thousands of calls. When victims answered
the calls they heard dead air (nothing on the other end), an innocuous recorded
message, advertisement, or a telephone sex menu. Calls were typically short in duration
but so numerous that victims changed their phone numbers to terminate the attack.

These TDoS attacks were used as a diversion to prevent financial and brokerage institutions
from verifying victim account changes and transactions. Fraudsters were afforded
adequate time to transfer funds from victim brokerage and financial online accounts.

Protection from TDoS attacks and other types of fraud requires consumers to be vigilant
and proactive. In Newark’s Public Service Announcement (PSA),
they recommend consumers protect themselves by:

* Implement security measures for all financial accounts by placing fraud alerts with
the major credit bureaus if you believe they were targeted by a TDoS attack or other
forms of fraud.
* Use strong passwords for all financial accounts and change them regularly.
* Obtain and review your annual credit report for fraudulent activity.

If you were a target of a TDoS attack, immediately contact your financial institutions,
notify your telephone provider, and promptly report it to the IC3 website at: www.IC3.gov. The IC3 complaint database links complaints to assist in referrals to the appropriate law enforcement agency for
case consideration. The complaint information is also used to identity emerging
trends and patterns.

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Thursday, June 17, 2010

Verizon Statement on FCC Vote on Broadband Internet Services Inquiry

/PRNewswire/ -- The Federal Communications Commission approved a Notice of Inquiry by a 3-2 vote on Thursday (June 17) to begin public consideration of possible legal frameworks for commission action on broadband Internet services. The following is a statement by Tom Tauke, Verizon executive vice president for public affairs, policy and communications:

"Reclassifying high-speed broadband Internet service as a telecom service is a terrible idea. The negative consequences for online users and the Internet ecosystem would be severe and have ramifications for decades. It is difficult to understand why the FCC continues to consider this option.

"Rather than attempting to make the new world of broadband fit into the regulatory scheme of the old telephone world, the FCC should acknowledge that this is an issue Congress should address. Nearly 300 members of Congress have signed letters to the FCC, warning against reclassification and expressing support for congressional action.

"We will continue to work with the Congress, the FCC and other interested parties to resolve these issues in a manner that encourages investment, innovation, jobs and the best possible online experience for users."

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Americans for Prosperity Slams FCC's Internet Takeover Attempt

/PRNewswire/ -- Phil Kerpen, vice president for policy at Americans for Prosperity (AFP), released the following statement in response to the Notice of Inquiry announcement today by the Federal Communications Commission:

"Today marks a troubling and dangerous step forward in the Federal Communications Commission's ongoing effort to take over the internet. The FCC's Notice of Inquiry is an aggressive step in their reckless effort to force decades-old Title II public utility regulations on Internet providers.

"Such a radical change undoes a remarkable decade of success with a free-market, hands-off Internet. No wonder we have seen mounting bipartisan opposition to reclassification from consumers worried about the impact Title II would have on innovation and competition, small businesses worried about a sudden drop in investment, and free-market allies worried about the increased role of the federal government in internet policy.

"Despite the outcry from nearly 300 Democrats and Republicans, President Obama's FCC is determined to regulate. We therefore urge Congress to step in immediately to stop the Commission's dangerous efforts to get regulatory control of the Internet."

AFP's new website -- www.NoInternetTakeover.com -- provides information and tools for Americans to engage their members of Congress on this critical issue.

Americans for Prosperity(TM) (AFP) is committed to educating citizens about economic policy and mobilizing those citizens as advocates in the public policy process. AFP is an organization of grassroots leaders who engage citizens in the name of limited government and free markets on the local, state and federal levels. The grassroots members of AFP advocate for public policies that champion the principles of entrepreneurship and fiscal and regulatory restraint.

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Thursday, June 3, 2010

Op Ed: We Need a New System for Interrogating Terrorists

It's been nearly nine years since 9/11, but we still have no established procedures for interrogating terrorist suspects detained inside the United States. The military-based system developed during the Bush Administration disregards civil liberties. The criminal justice model used in many terrorism cases inhibits intelligence collection. We need a better system.

To meet our counterterrorism objectives, Congress should enact a law that allows the government to interrogate a suspect for intelligence purposes, without counsel present, for up to seven days. To protect the suspect's constitutional rights, the information gained during this time could not be used as evidence against him in a criminal trial.

Once the interrogation is complete, the suspect would be turned over to the criminal justice system for a normal prosecution, with all the usual civil liberties protections. Such a system would maximize the chances of gaining valuable intelligence while leaving our criminal justice system undisturbed.

While civil libertarians will decry this proposal as a form of administrative detention, it's far more protective of civil liberties than the system devised during the Bush Administration (and affirmed by the Supreme Court). Under this military system, suspected terrorists (including U.S. citizens) can be designated enemy combatants by the president, placed in military custody and held indefinitely without trial. Judicial review of the lawfulness of the detention does not take place for months, even years. 
High-ranking Bush lawyer Jack Goldsmith, upon seeing 22-year-old U.S. citizen Yasser Hamdi isolated in a naval brig after being designated an enemy combatant, said, "Something seemed wrong. ... This is what habeas corpus is for."

But, as critics have pointed out, the criminal justice procedures used following the failed bombing of Flight 253 to Detroit and the botched car-bomb attack in Times Square could squander opportunities to gain intelligence. Normally, when a suspect is arrested, he is read Miranda rights and given the opportunity to see a lawyer. In most cases, suspects are advised to stop providing information, at least until the lawyer can evaluate the case. Even if a suspect waives his Miranda rights and submits to an interrogation, he must be "presented" in court "without unreasonable delay." These procedures create obstacles to collecting intelligence in national security cases.

There is a "public safety" exception that was used to justify short interrogations in the Flight 253 and Times Square cases without Miranda warnings. And, in both of these cases, it appears the suspects continued to provide information to law enforcement even after being read their rights. But this is more a matter of good fortune than the result of good policy.

Recognizing this, Attorney General Holder floated the idea of expanding the public safety exception to allow for a longer interrogation without Miranda warnings or a court appearance. Civil libertarians correctly note this proposal would undercut the logic of Miranda and threaten the constitutional protection against self-incrimination. Moreover, if Congress disposes of Miranda warnings in terrorism cases, the argument could be made that this protection can also be circumvented for other national security crimes - like espionage - and then serious violent crimes, and so on.

Allowing an "intelligence-only" interrogation would not raise Fifth Amendment problems because the information would be excluded from any subsequent trial. And, because this limitation would complicate prosecutions, the government is only likely to use it in cases where core national security interests are at stake.

Congress should build multiple levels of protection into this system. First, the government should be forced to establish probable cause of a terrorism crime to justify the interrogation. Second, to prevent this authority from being used to conduct secret interrogations, family members should be notified that a relative has been detained. Third, to protect against abusive treatment, the suspect's entire time in custody should be videotaped.

Congress would set the outer limit for this detention. In the United Kingdom, pre-charge detention is allowed for 28 days. We have a more libertarian tradition than the U.K., so an outer limit of seven days or less might be a reasonable period.

Detention for interrogation is an unsettling concept. But neither the criminal justice system nor law of war is perfectly suited for dealing with terrorism. To deal with this threat that combines aspects of both crime and war, we need to craft flexible institutions and legal procedures.

By David H. Schanzer
Durham, NC 

David Schanzer is the director of the Triangle Center on Terrorism and Homeland Security at Duke and the University of North Carolina, Chapel Hill. This op-ed ran in the Baltimore Sun, Newark Star-Ledger, Allentown Morning Call and the (Raleigh) News & Observer.

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