FCC Chairman Tom Wheeler reassured Sen. Mark Kirk, R-Ill., that the agency is looking into the term “not-for-profit hospital,” which the lawmaker suggested could use some clarity. Commission staff is “actively reviewing questions about the term's definition and seek to reach a determination in as expeditious a manner as possible,” Wheeler said in an Oct. 24 letter the agency released last week. “In general, it is important that the types of health care consortia envisioned by the HCF [Healthcare Connect Fund] program have the flexibility to include as members those entities that will provide as broad an array of telehealth and telemedicine applications as possible, while also ensuring the program maintains sufficient funding to aid the beneficiaries for which it is primarily intended: rural health care providers.”
Dust still hadn't settled Thursday in several outstanding races following the Tuesday midterm elections. Sen. Mark Begich, D-Alaska, had not yet conceded. Begich was down by more than three points in his re-election fight against Republican Dan Sullivan. Begich is a member of the Communications Subcommittee and has been active on rural broadband and USF issues. Sen. Mark Warner, D-Va., is locked in tight race against Republican consultant Ed Gillespie that has not formally been called, although Warner has maintained a slight lead and is widely considered victorious. The California 17th District House race had also not yet been called. Rep. Mike Honda, D-Calif., has led in the polls against Ro Khanna, also a Democrat and former deputy assistant secretary of Commerce under President Barack Obama.
CEA President Gary Shapiro rejected warnings voiced earlier this week by Sen. Ted Cruz, R-Texas, that leaders in both parties will likely use the lame-duck Congress to push through a nationwide Internet sales tax (see 1411040021), in an interview Wednesday. Shapiro also said he rejects Cruz’s premise that Internet taxes are one of the favorite causes of corporate lobbyists to seek new taxes to help big businesses at the expense of the little guy. "There is the Senator Cruz-Grover Norquist viewpoint that always mischaracterizes that issue," Shapiro said. Norquist is president of Americans for Tax Reform. It’s not that lobbyists want to assess new taxes on e-commerce sales, it’s "that those taxes are required to be paid already under the laws of 45 states," Shapiro said. "They’re just not being paid." Shapiro puts the odds of Internet sales tax legislation being moved in the lame-duck Congress at "probably a little less than 50-50," he said. "There is legislation which must pass in the lame-duck session -- the budget agreement. Senators have said that budget agreement is where this Internet sales tax legislation will go. It did already pass the Senate. There is some reluctance by Speaker [John] Boehner [R-Ohio] to pass it." The legislation "is very important to companies like Fry’s and Best Buy and Walmart and every other brick-and-mortar retailer which employs real people," Shapiro said. "They’re at a competitive disadvantage because their customers are not paying the sales tax that they owe when they buy online." Cruz and Norquist "have mischaracterized this as a new tax," when "it’s not a new tax at all," Shapiro said. "It’s a tax that consumers are responsible for, but only a very small number pay." Representatives for Cruz and Norquist didn't comment.
Two senators urged antitrust regulators to examine AT&T’s proposed acquisition of DirecTV with great care. Senate Judiciary Antitrust Subcommittee Chairwoman Amy Klobuchar, D-Minn., and ranking member Mike Lee, R-Utah, sent a joint letter to FCC Chairman Tom Wheeler and Attorney General Eric Holder Oct. 30. “Your agencies should consider the extent to which the merger is necessary to provide bundled service, and whether the merger will improve the companies’ ability to offer service that can more strongly compete with cable,” they said. “We think you should examine whether AT&T’s commitment to offer standalone [broadband] service for three years is sufficient to secure customers’ continued ability to choose that option.” They cited concerns about most favored nation clauses and about how they “can negatively affect competition for independent programming.” They also urged the regulators to examine any program access issues. The tone “suggests conditions, not rejection,” said Guggenheim Partners analyst Paul Gallant in a Tuesday research note to investors. “Given the current dispute over outside parties’ access to the merging companies’ programming contracts, we are inclined to think a March 2015 ruling from the DOJ and FCC is realistic.” Gallant suggested Comcast’s proposed acquisition of Time Warner Cable is the more challenging deal to secure approval. AT&T and DirecTV have defended their deal as strongly pro-consumer and necessary to provide better bundles.
Rep. Adrian Smith, R-Neb., is planning a letter to the FCC on rural TV programming. His office circulated a Dear Colleague letter asking for other lawmakers to sign on by Nov. 18. “Internet speeds and access continue to grow, and consumers have more cable channels and online media options,” said Smith’s draft of the letter to FCC Chairman Tom Wheeler. “However, access to these opportunities remains a challenge for many -- particularly the mostly rural Americans not yet reached by the fastest broadband and seniors who continue to access video content solely through television.” The FCC should “remain mindful of the challenges faced by rural Americans as you consider issues before the Commission,” the draft said. “We remain committed to working with you to ensure all Americans have the opportunity to access the content most relevant to their work, families, and communities.”
“One of my greatest concerns during a lame duck is that we could see leaders in both parties pushing through a nationwide internet sales tax,” Sen. Ted Cruz, R-Texas, told National Review Online Monday. That’s “one of the favorite causes of the corporate lobbyists on K Street, to jack up taxes on millions of mom-and-pop internet retailers,” he said: “That helps all the big businesses at the expense of the little guy.” Opponents and supporters of the Marketplace Fairness Act (HR-684) have told us that MFA proponents in the Senate are likely to attach that bill to the Internet Tax Fairness Act (see 1409230083). Sen. Mike Enzi, R-Wyo., introduced the Marketplace and Internet Tax Fairness Act (MITFA) in July, just after the House’s passage of the Permanent Internet Tax Freedom Act (HR-3086) (see 1407210077 and 1407160078). MITFA (S-2609) combines the principles of the MFA, which would let states tax remote sellers with annual revenue topping $1 million, and the Internet Tax Freedom Act, which would extend the moratorium on Internet access taxes through Nov. 1, 2024.
The Senate must act on surveillance overhaul during the lame-duck session, said Rep. Jerrold Nadler, D-N.Y., ranking member of the Judiciary IP Subcommittee. “The most recent version of the USA Freedom Act, reintroduced in the Senate by Senator Patrick Leahy, [D-Vt.,] contains bipartisan reform measures supported by a historic alliance of stakeholders; including the White House, liberal Democrats, conservative Republicans, the intelligence community and privacy advocates,” said Nadler in a Monday letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky. He urged the Senate “to pass the USA Freedom Act once Congress reconvenes on Nov. 12 and to send it back to the House for a final vote of approval.”
The FCC is moving “as expeditiously as possible” to allow for more Wi-Fi use in the upper 5 GHz band, FCC Chairman Tom Wheeler reassured Sens. Marco Rubio, R-Fla., and Cory Booker, D-N.J., along with Reps. Bob Latta, R-Ohio, and Anna Eshoo, D, Darrell Issa, R, and Doris Matsui, D, all of California, in a letter the agency released last week. They all back the Wi-Fi Innovation Act, calling for shared spectrum use in that band. The Institute of Electrical and Electronics Engineers “is actively reviewing two leading proposals submitted by the Wi-Fi industry to address interference issues within the upper 5 GHz band,” Wheeler said. "Commission staff has encouraged and monitored the group's progress. At the same time, the Commission continues to work collaboratively with other federal stakeholders, including NTIA, the Department of Transportation and the National Highway Traffic Safety Administration, to encourage the development of viable solutions to protect incumbent users from harmful interference, while maximizing the potential shared use of this spectrum.”
Comcast backs “open Internet protections similar to those” that Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and Rep. Doris Matsui, D-Calif., outlined in legislation proposing a ban on paid prioritization deals, Comcast Executive Vice President David Cohen told Leahy in a letter. Leahy had asked that Comcast and other major ISPs pledge to forgo paid prioritization deals (see 1410230041). Cohen responded in a letter dated Oct. 24 that Leahy’s office released to us Thursday. Cohen reiterated his confidence that the FCC will have new net neutrality rules in place before 2018, when its net neutrality obligations enacted as a condition of Comcast's NBCUniversal acquisition will expire. The FCC should craft “stable” rules using Communications Act Section 706, Cohen said, saying reclassifying broadband under Title II would be “risky and unnecessary.” Cohen dismissed the idea of an ISP pledge. Net neutrality rules “will only be meaningful if they offer all consumers of all companies the same protections,” Cohen said. “Voluntary pledges by individual ISPs are not an adequate substitute for industry-wide rules -- whether promulgated by the FCC or enacted by Congress.”
AT&T warned Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., that reclassifying broadband as a Communications Act Title II telecom service would not give regulators the tools to ban paid prioritization, as some net neutrality advocates have recommended. Leahy has not specifically called for Title II reclassification but has long targeted paid prioritization deals and introduced legislation that would ban them. If the FCC reclassifies, “any attempt to ban paid prioritization would run headlong into decades of Title II precedent that make clear that generally available differentiated service options, including paid prioritization, are allowed,” wrote Tim McKone, AT&T executive vice president-federal relations, in a response dated Thursday. “Thus the Commission would be unable to prevent any Internet service provider that did decide to offer paid prioritization from doing so.” AT&T “has no plans to offer such capabilities to third parties,” McKone assured Leahy, referring to the possibility of entering “into arrangements with third parties to prioritize traffic over a consumer’s last mile broadband Internet connection without the knowledge and direction of the end user.” AT&T said that not all prioritization deals pose risks to consumers. Leahy had requested earlier this month that AT&T and other major ISPs pledge to forgo paid prioritization deals (see 1410230041).