Broadband Cable Association of Pennsylvania


January 10, 2014

The nation's top telecommunications regulator on Thursday pledged vigorous oversight of broadband networks, saying government intervention "may well be warranted" when market power is concentrated in a few hands. "[I]t is essential in the public interest of our country that the government, and by government I mean the FCC, have the power to oversee the broadband networks and to intervene to forestall their exploitation by unacceptable acts," Tom Wheeler, chairman of the Federal Communications Commission, said in prepared remarks for a speech in Mountain View, Calif.

Mr. Wheeler's comments come days after AT&T Inc. said it would let companies pay for consumers to access their services so the charges don't count against consumers' monthly data allowances. Mr. Wheeler said Wednesday at the International CES convention in Las Vegas that the FCC would intervene in the program if it proved to be anticompetitive or an impediment for consumers to access the Web. In 2010, the FCC set "open Internet" rules that would require equal treatment for Internet traffic. The rules, sometimes termed net-neutrality rules, exempted wireless services. A federal appeals court is considering Verizon Communications Inc. 's challenge to the rules.

Mr. Wheeler said the commission exempted wireless services because it recognized many consumers have more choices for a smartphone plan than for their home broadband link, but he said the commission would monitor developments closely. "It may well be that the kind of offering AT&T has announced enables increased competition and increased efficiency-both things that benefit consumers. It is not the sort of thing that should be prohibited out of hand. But, again, history instructs us that not all new proposals have been benign. There has to be some ability on the part of government to oversee, to assess, and, if warranted, to intervene," he said in prepared remarks.

Mr. Wheeler's comments in both speeches reflect his belief the commission has the legal authority to take action against AT&T, although he cautioned in Thursday's remarks that he wasn't calling for intervention "unless there is an unmistakable warrant for it." Jim Cicconi, an AT&T senior executive vice president, said his company's service was "aimed solely at benefiting our customers" and is "purely voluntary and nonexclusive." He added, "We are completely confident this offering complies with the FCC's net-neutrality rules, which our company supports."

Because broadband networks are expensive to deploy and require large scale to operate efficiently, Mr. Wheeler said there was potential for a lack of competition at the local level. He said the FCC should consider acting if network operators possess local market power and consumers are at risk of harm. "[W]here significant, persistent market power exists or where significant negative externalities exist, FCC intervention may well be warranted. And, of course, we will exercise with care our duty to ensure that new transactions do not create market concentration in regulated industries that would impair the public interest," Mr. Wheeler said.

He said that what consumers call the Internet is really just a collection of wired and wireless networks, making local network providers a crucial gateway for consumers to access the broader Web. "This is why it is essential that the FCC continue to maintain an open Internet and maintain the legal ability to intervene promptly and effectively in the event of aggravated circumstances," Mr. Wheeler said. Wall Street Journal

Facebook in early spring will shut down a controversial ad feature that got the company in legal trouble over privacy, the social network said Thursday. In a message posted in the company's forum for developers, the social network said that it would sunset the ad program, known as Sponsored Stories, on April 9. For users who don't want their names or pictures used in ads at all, the change will appear largely cosmetic.

Sponsored Stories, which the company launched in 2011, created a social endorsement for ads. If a Facebook user liked a company's product or checked into a restaurant, that action along with the person's profile picture could appear as an advertisement in their friends' Facebook news feeds. The feature rankled privacy advocates, who brought a class-action lawsuit against the company. The lawsuit argued that Facebook violated the privacy rights of minors by publishing their "likes" and profile pictures in advertisements without their consent.

Last August, after a protracted legal battle, a U.S. district judge approved a $20 million settlement in the case. Facebook also changed its privacy policy in response to the case. Instead of cutting back on the social component in its ads, the company broadened its policy, telling users in August that all their data is fair game. The company said that a person's face and "likes," including those of minors, could be used in all advertisements on the social network.

The company reiterated that stance in a blog post on Facebook's website on Thursday. While the Sponsored Stories feature would be killed, "Social context - stories about social actions your friends have taken, such as liking a page or checking in to a restaurant - is now eligible to appear next to all ads shown to friends on Facebook."

For advertisers, that means that they can no longer design an ad whose main purpose is to showcase a Facebook user's likes or check-ins to their friends. But they are free to put up ads for their products, in both news feeds and on the side panels of a Facebook pages, that include people's likes and pictures - so long as they are not the main focus of the ad, says Facebook spokesman Tim Rathschmidt. "Today is when we let our ad partners know the exact date when they'll no longer be able to buy sponsored stories," he wrote in an email. Wall Street Journal