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Hal Singer has discovered that total wireline broadband investment has declined 12% in the first half of 2015 compared to the first half of 2014. The net decrease was $3.3 billion across the six largest ISPs. As far as what could have caused this, the Federal Communications Commission’s Open Internet Order “is the best explanation for the capex meltdown,” Singer writes. Despite numerous warnings from economists and other experts, the FCC confidently predicted in paragraph 40 of the Open Internet Order that “recent events have demonstrated that our rules will not disrupt capital markets or investment.” Chairman Wheeler acknowledged that diminished investment in the network is unacceptable when the commission adopted the Open Internet Order by a partisan 3-2 vote. Read More ›

A British telecom executive alleges that Verizon and AT&T may be overcharging corporate customers approximately $9 billion a year for wholesale “special access,” services, according to the Financial Times. The Federal Communications Commission is presently evaluating proprietary data from both providers and purchasers of high-capacity, private line (i.e., special access) services. Some competitors want nothing less than for the FCC to regulate Verizon’s and AT&T’s prices and terms of service. There’s a real danger the FCC could be persuaded-as it has in the past-to set wholesale prices at or below cost in the name of promoting competition. That discourages investment in the network by incumbents and new entrants alike. As researcher Susan Gately explained in 2007, a study by her Read More ›

Attorneys general from forty states and the District of Columbia have asked the United States Court of Appeals for the Fifth Circuit to lift a preliminary injunction preventing a state attorney general from investigating Google’s business practices.

In 2011, Google signed a non-prosecution agreement with the U.S. Department of Justice in which it acknowledged that it improperly assisted Canadian online pharmacy advertisers target U.S. consumers. Google agreed to forfeit $500 million and to adopt compliance and reporting measures.

“State Attorneys General have reason to believe that Google’s services are still being used for unlawful activities,” according to a brief filed on behalf of Mississippi AG James M. Hood, III at the end of June.

Google asserts that it’s not liable for displaying information created by third parties. “Congress broadly immunized interactive computer service providers from state regulation for displaying information created by others,” according to the company’s December 2014 motion for preliminary injunction.

However, three federal appellate courts have ruled that Section 230 of the Communications Decency Act, to which Google refers, does not confer unlimited immunity.

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The U.S. Copyright Office would be given greater autonomy pursuant to a proposal unveiled by two members of Congress last week, and the agency’s Director would be appointed for a ten year term by the President upon the advice of a bipartisan, bicameral commission and with the consent of the Senate.

The Copyright Office was established as a separate department in the Library of Congress in 1897. The head of the Copyright Office, known as the Register of Copyrights, serves at the pleasure of the Librarian of Congress. But the Copyright Office has outgrown the Library of Congress. For example, the Library of Congress hasn’t delivered the necessary information technology environment so the Copyright Office can meet or exceed customer expectations in the Digital Age.

An efficient copyright system increases the supply of creative content by incentivizing content creators and rewarding investors who underwrite the cost of bringing the creations to market. The Copyright Office must make extensive use of IT to process copyright registration applications, preserve deposited copies of copyrighted works and maintain records of the transfer of copyright ownership. If the Copyright Office fails, there could be unintended consequences for the copyright system.

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A bill before Congress would for the first time require radio broadcasters to pay royalty fees to recording artists and record labels pursuant to the Copyright Act. The proposed Fair Play Fair Pay Act (H.R. 1733) would “[make] sure that all radio services play by the same rules, and all artists are fairly compensated,” according to Congressman Jerrold Nadler (D-NY). … AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it. Satellite radio has paid below market royalties for the music it uses … The bill would still allow for different fees for AM/FM radio, satellite radio and Internet radio, but it would mandate a “minimum fee” for each Read More ›

Chairman Thomas E. Wheeler of the Federal Communications Commission unveiled his proposal this week for regulating broadband Internet access under a 1934 law. Since there are three Democrats and two Republicans on the FCC, Wheeler’s proposal is likely to pass on a party-line vote and is almost certain to be appealed. Free market advocates have pointed out that FCC regulation is not only unnecessary for continued Internet openness, but it could lead to years of disruptive litigation and jeopardize investment and innovation in the network. Writing in WIRED magazine, Wheeler argues that the Internet wouldn’t even exist if the FCC hadn’t mandated open access for telephone network equipment in the 1960s, and that his mid-1980s startup either failed or was Read More ›

Supporters of Title II reclassification for broadband Internet access services point to the fact that some wireless services have been governed by a subset of Title II provisions since 1993. No one is complaining about that. So what, then, is the basis for opposition to similar regulatory treatment for broadband? Austin Schlick, the former FCC general counsel, outlined the so-called “Third Way” legal framework for broadband in a 2010 memo that proposed Title II reclassification along with forbearance of all but six of Title II’s 48 provisions. He noted that “this third way is a proven success for wireless communications.” This is the model that President Obama is backing. Title II reclassification “doesn’t have to be a big deal,” Harold Read More ›

As I and others have recently noted, if the Federal Communications Commission reclassifies broadband Internet access as a “telecommunications” service, broadband would automatically become subject to the federal Universal Service tax–currently 16.1%, or more than twice the highest state sales tax (California-7.5%), according to the Tax Foundation. Erik Telford, writing in The Detroit News, has reached a similar conclusion. U.S. wireline broadband revenue rose to $43 billion in 2012 from $41 billion in 2011, according to one estimate. “Total U.S. mobile data revenue hit $90 billion in 2013 and is expected to rise above $100 billion this year,” according to another estimate. Assuming that the wireline and wireless broadband industries as a whole earn approximately $150 billion this year, the Read More ›