This week’s net neutrality court decision is an “an open invitation to the FCC to clarify the importance of telecommunications networks to future economic growth and opportunity for all Americans,” said Computer & Communications Industry Association Vice President-Government Relations Cathy Sloan, writing in an op-ed for The Hill (http://bit.ly/1mczUoD). She said broadband access is now “the equivalent of basic telephone service for most Americans” when discussing the context of the case, which rests on the FCC classifying broadband as an information service rather than a Title II telecom service. The agency has kept regulations to a minimum where there’s sufficient competition, she said. “Where choices are few and market failure occurs, end users will look to the FCC for some basic protections that are only possible if the agency restores its own dormant statutory authority over access to critical underlying telecommunications networks,” Sloan said. “Otherwise Internet access providers will be free to block and discriminate at will, prioritizing only those information services that are both willing and able to pay for special connectivity."

The American Civil Liberties Union balked at initial reports that President Barack Obama may not overhaul government surveillance practices to a degree it deems sufficient. Obama is scheduled to talk Friday about what changes he’s going to make. The speech “will not only determine the direction of national security policies and programs, but also define his civil liberties legacy,” said ACLU Executive Director Anthony Romero in a statement Wednesday (http://bit.ly/1eDXAMR). “If the speech is anything like what is being reported, the president will go down in history for having retained and defended George W. Bush’s surveillance programs rather than reformed them. Keeping the storage of all Americans’ data in government hands and asking ‘lawmakers to weigh in,’ as reported, is passing the buck -- when the buck should stop with the president.”

The FCC shouldn’t push the panic button and reactively reclassify broadband as a Title II service, said Fred Campbell, executive director of the new Center for Boundless Innovation, on the group’s blog Wednesday. Reaction continued to flow Wednesday after Tuesday’s decision by a federal appeals court overturning the commission’s net neutrality rules (CD Jan 15 p1). “The largest ISPs have already committed to maintaining an open Internet despite the court’s ruling, and there is no reason to believe that will change any time soon,” Campbell said (http://bit.ly/1d7t6Ab). “The Internet is not -- I repeat, is not -- in imminent danger. It is safe to leave the bomb shelter. Don’t believe the doomsayers who claim the ruling leaves consumers with no protection from ISPs. They are wrong. In the unlikely event that Internet openness is seriously threatened, the government retains authority to intervene.” Grant Seiffert, president of the Telecommunications Industry Association, said net neutrality remains important. “We have long-advocated for consumers’ right to connect devices and access content over the Internet,” he said. “In light of the Court’s decision, we rely on all interested parties to maintain an ecosystem where industry can continue to innovate and consumers are protected. Internet service providers have already expressed continued commitment to maintaining an open Internet. As manufacturers and suppliers of network equipment and broadband-enabled devices, we are encouraged by the certainty this commitment provides in and of itself.”

The FCC would receive $339.84 million for its salaries and expenses under a consolidated 2014 appropriations deal, lawmakers said this week as details of the legislation were unveiled. The FCC had requested a budget of $359.3 million for FY2014 (http://fcc.us/1aC0J0L). The $1.012-trillion spending package’s details were released in several documents covering how different government branches and agencies are funded by 12 appropriations bills. The continuing resolution and sequestration had left the FCC with $322 million for FY2013, despite a request for $346.8 million for that year (http://fcc.us/1alfuos). “The bill provides that $339,844,000 be derived from offsetting collections, resulting in no net appropriation,” said the explanatory document covering the FCC (http://1.usa.gov/1a4fY4A). It said the total includes $300,000 for “consultation with federally recognized Indian tribes, Alaskan Native villages, and entities related to Hawaiian Home Lands, and $11,090,000 for the FCC Office of Inspector General.” It also included provisions on in-flight mobile services emphasizing that the FCC can determine its rulemaking only from a technical perspective and cannot determine the “social or security implications,” the text said. “The FCC is directed to consult with the Secretaries of Transportation and Homeland Security, and the Federal Bureau of Investigation prior to a final rulemaking,” it said. “The Chairman of the FCC shall keep the House and Senate Committees on Appropriations apprised of any developments in this rulemaking.” There are also administrative provisions for the FCC in sections 510 and 511. The first extends an exemption for the USF and the second prevents the agency from “changing rules governing the Universal Service Fund regarding single connection or primary line restrictions,” it said. The same statement mentions the FTC, which would receive $298 million for salaries and expenses, under the act. NTIA would receive $46 million and the National Institute of Standards and Technology $850 million, according to a different explanatory statement (http://1.usa.gov/1hTJ2xY). “This appropriation is partially offset by premerger filing fees estimated at $103,300,000 and $15,000,000 from fees to implement the Telemarketing Sales Rule,” it said of the FTC appropriations.

Charter Communications sent a letter to Time Warner Cable proposing a transaction, said the potential acquirer in a news release Monday (http://bit.ly/1dqJ3b1). The letter and deal proposal are an attempt to “bring the matter to shareholders directly” after six months of overtures from Charter that Time Warner Cable’s management and board “chose not to engage on,” said Charter. Time Warner Cable rejected Charter proposals in June and October, and responded to a December offer with a verbal offer that was “unrealistic,” said Charter CEO Tom Rutledge in the letter to his counterpart at the potential acquiree, Robert Marcus. “The information provided to date has been exclusively one-way, which further reinforces the point that there is no genuine interest from Time Warner Cable management and Board of Directors to engage on this opportunity,” said Charter CEO Tom Rutledge in the letter to Marcus. The proposed transaction would be “based on combining shareholder groups and allowing Time Warner Cable shareholders to participate at a substantial premium to Time Warner Cable’s unaffected stock price as well as meaningful upside following completion,” the letter said. Charter is prepared to offer a “cash/stock election mechanism” that would let Time Warner Cable shareholders in favor of a deal participate, and shareholders who don’t to cash out “at a meaningful premium,” the letter said. The deal’s financing is complete, and Charter “can be in a position to sign commitment letters in a matter of days,” Rutledge said. “We believe that time is of the essence to prepare our companies to meet the challenges of the industry, which is why we have decided to announce the status of our discussions to date to both sets of shareholders.” The newly created company would create value by reducing cost and increasing growth, and generate higher returns for the cable industry by rationalizing “the geographic holdings of the industry into more efficient entities,” Rutledge said. Time Warner Cable had no immediate comment.

The FCC is effectively getting rid of its old gold-and-blue website, forcing all users to use the sometimes controversial new site (CD June 6/11 p2). Since the new site was launched three years ago, the agency has kept the old site up and running. “Beginning Feb. 3, this front page will redirect automatically to the FCC.gov homepage,” said a notice that appeared on the top of the so-called transition webpage. “Personal bookmarks to other transition.fcc.gov pages will continue to work."

The upcoming court decision on net neutrality gives the FCC an opportunity to rethink how it handles Internet disputes, said speakers on an American Enterprise Institute conference call Monday. “The FCC will win regardless of the outcome,” said Roslyn Layton, a Ph.D. fellow at Aalborg University in Copenhagen. Obviously, the agency will win if U.S. Court of Appeals for the D.C. Circuit approves the rules, but “the FCC will win even bigger if they lose,” she said. FCC Chairman Tom Wheeler is versed in military history, and wants to “change the game” of a net neutrality fight that has been going on for more than a decade, Layton said. If the FCC gets decision not in the agency’s favor, it gives the commission a “clean slate” and opportunity to do many things, she said: It could come up with a “more holistic” idea of open Internet that applies to all the players, including back end. Or “net neutrality could be rebooted with more teeth,” in which those making a net neutrality claim would need to prove market power abuse, or that consumers are actually being harmed by a new practice, she said. The net neutrality rules are “not particularly toxic in their own right, but there’s a big slippery slope problem,” said Richard Bennett, visiting AEI scholar. The agency used Section 706 of the Telecom Act to justify the regulations, which is an example of the FCC looking for a way to define its own jurisdiction, he said. “If the agency is free to define its own jurisdiction, then the wishes of Congress no longer matter in the day-to-day operation of the FCC.” For instance, if the agency decided that all broadband plans should have a minimum speed of 20 Mbps, “then it could just enact that … based on 706 jurisdiction,” he said. Based on remarks of Wheeler over the past month, “I don’t think this commission is looking to vastly expand its authority,” said Jeffrey Eisenach, director of AEI’s Center for Internet, Communications, and Technology Policy. Wheeler is taking what appears to be a “very sensible approach” to net neutrality disputes, Eisenach said. But if the D.C. Circuit upholds the authority that the FCC asserts in defending the net neutrality order, “the potential would be there over time” for great regulatory expansion to occur, he said.

A high-level policy group will recommend how to use the 470-790 MHz UHF spectrum band most effectively in coming years, the European Commission said Monday. The panel, whose members include broadcasters, network operators, mobile providers and tech associations, will help the EC and EU governments develop long-term strategies and regulatory policy on future use of the band, including the possibility of sharing some parts of the spectrum, it said. The group’s report will look at how Europe will access and use audiovisual content and data in the medium to long term and respond to four challenges, it said: (1) What next-generation terrestrial provision and reception of audiovisual content will look like. (2) How to secure the public interest and consumer benefits while allowing for market transformation. (3) What the strategic elements of spectrum use in the UHF band are in light of the first challenge, and what regulatory role the EU should play in coordinating developments. (4) What the financial implications are for a next-generation terrestrial platform for broadcasting and Internet use.

Analysts are bullish on the potential for wireless carriers to experiment with new business models on the Internet, based on remarks FCC Chairman Tom Wheeler has made in the past week. Wheeler gave AT&T “clear support to move ahead” with its sponsored data plan when he said at the Computer History Museum (CD Jan 10 p6) the net neutrality order “did not discourage this type of two-sided market for mobile uses,” wrote Stifel Nicolaus analysts Christopher King and David Kaut in an analyst note Friday, quoting Wheeler’s speech. King and Kaut expect the U.S. Court of Appeals for the D.C. Circuit to soon overturn the FCC’s prohibition against “unreasonable discrimination” by wireline broadband providers, which they said would free most wireline telcos and cable companies to pursue wireline data-sponsorship plans “and even paid-prioritization agreements,” they said. Spectrum congestion makes wireless data caps much more restrictive than wireline data limits, making wireless “a natural place to test out data-sponsorship offers,” the analysts said. If those offers “catch on,” and the court reverses the net neutrality rules, they expect cable and wireline companies to also pursue such plan. Wheeler remarks on the importance of interconnection and openness on the Internet suggest “some willingness to at least consider reclassifying broadband Internet access” as a more heavily regulated Title II telecom service, they said, “if he believes it necessary to preserve an FCC broadband oversight role.” Paul Gallant of Guggenheim Partners said Wheeler’s comments are “encouraging for both wireless and cable/telcos that want to explore new broadband monetization opportunities.” Gallant sees Wheeler’s comments on new business models in the wireless arena as “quite encouraging for wireless operators,” he said. Cable operators and telcos can likely also explore new business models, as Wheeler encouraged experimentation, wrote the analyst. “But these models will face closer FCC scrutiny than new wireless services and will need to be carefully crafted to pass both regulatory and political scrutiny."

President Barack Obama will disclose Friday which surveillance review group recommendations he will adopt and which he will reject, said Press Secretary Jay Carney. “The president’s been clear throughout this review process that we will not harm our national security or our ability to face global threats.” Carney last Friday pointed to a goal of taking measures that “create more transparency, introduce reforms that improve the system” to give Americans more confidence. Obama has held many meetings on these topics throughout last week, including with top members of Congress Thursday. Sens. Mark Udall, D-Colo., Ron Wyden, D-Ore., and Martin Heinrich, D-N.M., sent a letter (http://bit.ly/KJZWRt) to the White House Friday demanding Obama adopt certain recommendations from his review group report, released in December. These three members of the Senate Intelligence Committee focused on why the government should end its bulk collection of phone metadata and endorsed the idea of having the government go to the phone companies to seek it out. “Telecom providers generally already hold this information for at least 18 months to comply with FCC regulations, and some companies hold data longer for their own business purposes,” the senators wrote, saying the proposal means companies would not have to hold metadata any longer than they currently do. “Frankly, the NSA has not demonstrated that there is any need to require the telecom providers to hold data for longer than they normally would.” They do not think this would hurt the speed of the government’s accessing metadata or create privacy concerns, they said. They also asked Obama to close a loophole permitting warrantless searches of phone call content and emails in the midst of foreign surveillance as well as create a Foreign Intelligence Surveillance Court constitutional advocate. Obama can do this now, but they are ready to help by introducing such legislation, they said.