OVERNIGHT TECH: FCC’s $5 billion Wi-Fi plan under fire

THE LEDE: The Federal Communications Commission (FCC) is set to vote Friday on a plan from Chairman Tom Wheeler that would dedicate $5 billion to provide and upgrade Wi-Fi in schools and libraries over the next five years.

While some stakeholders have praised the plan and the agency has defended it as one part of a multi-faceted effort to boost connectivity across the country, education groups, lawmakers and a Republican FCC commissioner say Wheeler is writing a check the agency can’t cash.

{mosads}Wheeler’s proposal would spend $5 billion over the next five years exclusively on Wi-Fi, on top of the annual $2.4 billion budget for the agency’s E-Rate program, which goes toward connecting schools and libraries to the Internet. The first $2 billion has already been set aside. The following $3 billion, Wheeler has said, will come from eliminating inefficiencies in the E-Rate program and phasing out support for outdated technologies, like phones and pagers. Critics worry that the agency will have to phase out support for other services if it hopes to meet the $3 billion goal.

Ajit Pai, one of the agency’s two Republican commissioners and a vocal advocate for E-Rate reform, said Thursday that he crunched the numbers for Wheeler’s plan and they don’t add up. According to his financial projections, Wheeler’s plan would cut $2.7 billion in funding for basic connectivity over the next five years, especially affecting schools in rural areas.

In a release, Pai’s office said the projections “validate the concerns of congressional leaders of both parties that the proposal’s promises would come out of funding available today for Internet connectivity.” On Tuesday, Pai said talks with Wheeler over the E-Rate proposal had broken down as Wheeler rejected the Republican’s suggested changes to win support from Democrats. Wheeler’s office, meanwhile, said he is open to Pai’s suggestions as long as they don’t fundamentally change the proposal.

Pai’s views are backed by Republicans on Capitol Hill. In the House, Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.), the chairman of the House Energy and Commerce Committee and Commerce subcommittee on Communications, respectively, wrote a letter to Wheeler Thursday asking that he modernize the E-Rate program without increasing spending for it or the larger Universal Service Fund, which E-Rate is a part of.

The pair also criticized Wheeler for reportedly shutting at least one Republican out of negotiations. “Engaging in bipartisan deliberation of all items should be the goal for every chairman, particularly when all parties should share the same goals: creating a fund that will appropriately serve schools and the students that rely on modern technology, and that is fiscally prudent and does not over-burden ratepayers,” they wrote.

In the Senate, Sens. John Thune (R-S.D.) and Kelly Ayotte (R-N.H.) spoke out in the lead up to Friday’s vote. In a statement, Thune encouraged Wheeler to postpone Friday’s vote in the hopes of reaching bipartisan compromise on the issue. “Moving forward in a partisan manner, relying on untested budget assumptions, and shifting E-Rate’s priority from connectivity to Wi-Fi will only erode the chairman’s and FCC’s stature, and potentially jeopardize support for E-Rate,” he said.

In a letter to Wheeler on Thursday, Ayotte called for bigger reforms to the E-Rate program to address the needs of rural schools, where Internet access can be harder to get and more expensive. “School and libraries in New Hampshire, especially rural areas, are in dire need of communications services,” she said. “Minor tweaks to the current system will fail to address these urgent needs.” 

FROM ALL SIDES: Wheeler is getting backlash from Democrats, too. Earlier this week, Sens. Jay Rockefeller (D-W.Va.) and Ed Markey (D-Mass.), who played major roles in shaping the legislation that led to the creation of the E-Rate program, pushed back on Wheeler’s plan. The pair applauded Wheeler’s attempts to make the program more transparent and efficient but asked him not to focus on Wi-Fi funding ahead of ensuring basic connectivity for schools and libraries.

“Because Wi-Fi enhances connectivity for institutions that have broadband, its profound impact cannot be felt where there is no broadband to support it,” they wrote. “It would be ill-advised to guarantee a permanent set-aside for Wi-Fi, if that set-aside could end up cannibalizing funding for basic connectivity.”

HOUSE DEMS LEND SOME SUPPORT: Wheeler is finding some support from House Democrats. In a statement on Thursday, House Energy and Commerce ranking member Henry Waxman (D-Calif.) called Wheeler’s proposal “a set of responsible, common-sense proposals to improve transparency and cost-effectiveness of E-Rate purchases, ensure a more equitable funding distribution, eliminate wasteful spending on antiquated equipment and services, while closing the ‘Wi-Fi gap.’” He called on the agency to “improve the program even more” going forward.

Rep. Anna Eshoo (Calif.), the top Democrat on the Commerce subcommittee on Communications, seemed sympathetic to Wheeler’s position but said the FCC should increase E-Rate spending across the board. “The reason there’s a push and a pull is because there aren’t enough resources,” she said, speaking off the House floor Thursday. She compared the need to balance E-Rate costs with “cutting a baby in half.”

COMMENT BOX OPENS FOR COMCAST-TWC: The FCC formally began accepting comments on Comcast’s $45 billion bid to buy Time Warner Cable. In a 31-page notice issued on Thursday, the commission said that “interested persons” will have until Aug. 25 to file their comments. Responses to comments are due in by Sept. 23, and final letters are due by Oct. 8.

In a statement, Comcast spokeswoman Sena Fitzmaurice said that with the move, “the next step in the formal review process begins.” The company has noted that it and Time Warner Cable don’t operate in any of the same markets, and said that approval of the deal would lead to faster Internet speeds for some subscribers and ensure that Comcast can compete with upstart rivals like Google and Netflix. “We look forward to a thorough, fact-and-data based comment and review process on questions that are specifically related to the issues raised by these transactions,” Fitzmaurice said.

“Of course, we fully expect a robust debate, and that’s what the FCC process is for,” she added. “But we believe that once all the facts are in the record, it will show the significant advantages that bringing these companies together will bring.”

POLIS WANTS EMAIL PRIVACY ACT DONE BY AUGUST: A bill to require a warrant before the government can search emails older than 180 days should get done this month, Rep. Jared Polis (D-Colo.), an author of the Email Privacy Act, said on Thursday. “I’m hopeful the House leadership will bring this bill to the floor before the August recess,” he told a Capitol Hill reception sponsored by the Digital Fourth coalition.

“Our current laws are antiquated and we need to update them to simply reflect common sense [and] where technology and expectations of privacy are today for every American,” Polis said. At the reception, he showed old emails that he had sent to his family. “I had a reasonable expectation of privacy when I was writing with my mother,” he said. “Yet for all I know the government might already know this.”

Rep. Kevin Yoder (R-Kan.), the other author of the Email Privacy Act, said that their update to the “arcane” 1986 Electronic Communications Privacy Act “is really starting to take off.” The Email Privacy Act currently has 224 co-sponsors in the House, well over half the chamber.

FACEBOOK STUDY GETTING THE EYE FROM IRELAND: Irish data privacy watchdogs are reportedly examining Facebook’s controversial study manipulating nearly 700,000 people’s newsfeeds. The Wall Street Journal reported on Thursday that the country’s data protection commissioner, Billy Hawkes, plans to be “examining more closely the uses that Facebook is making of personal data for research purposes.”

UNIVERSITIES, LIBRARIES OPPOSE INTERNET ‘FAST LANES’: A coalition of library and higher education groups released a set of principles Thursday urging the FCC to write tough net neutrality rules. The groups said the agency’s new net neutrality rules should ban Internet providers from blocking access or charging for better access to certain websites. Additionally, the groups said the rules should apply equally to wired and mobile Internet.

“Institutions of higher education and libraries do not object to paying for the high-capacity Internet connections that they need to support their students, faculty, administrators, and library patrons; but once connected, they should not have to pay additional fees to receive prioritized transmission of their content, services, or applications,” the 11 groups including the American Library Association, the Association of Research Libraries and the American Council on Education said in a statement releasing the principles.

The groups’ principles come as the FCC looks to rewrite its net neutrality rules, which kept Internet providers from blocking or slowing access to certain websites before they were struck down by a federal court earlier this year. While Chairman Wheeler has stressed that all options are on the table as the agency moves forward with rewriting the rules, some worry that a proposal of his would allow Internet providers to charge websites for better access to users, creating online “fast lanes.”

KICKSTARTER CHIMES IN TOO: Kickstarter also voiced its support for FCC rules to ensure that Internet service providers give equal treatment to all streams of online traffic. In an official comment with the commission, the crowd-funding site said that it had “grave concerns” about the plan from Wheeler, which could have a “chilling effect” on innovation and do “real harm… to companies like ours.”

DROPBOX JOINS ENCRYPTION PUSH: Dropbox hopped on board with an Access effort to make sure networks and communications are encrypted. The company on Thursday joined Twitter, DuckDuckGo and other outlets in the “Encrypt All the Things” campaign, which security engineer Andrea Bortz said “will help make the Internet safer and more secure for everyone.”

FCC WORKSHOP ON ACCESSIBILITY AND SOCIAL MEDIA: The FCC will hold a workshop on July 17 to discuss making sure people with disabilities can access social media tools and content, the agency announced Thursday. Presenters include IBM and Adobe.

ON TAP:

The FCC’s open meeting gets underway at 10:30.

IN CASE YOU MISSED IT:

Regulators are suing Amazon for millions of dollars, claiming the company allowed children to make unauthorized purchases in its app store. 

A Senate panel on Thursday advanced legislation to allow people to “unlock” their cellphones and switch from one carrier like AT&T or Verizon to another. 

The House Judiciary Committee easily passed a critical satellite television law on a unanimous voice vote. 

Music groups are pressuring Congress to back down from a pledge to keep AM/FM radio stations from paying musicians. 

The Supreme Court’s decision to kill the streaming television service Aereo will be bad for new technologies across the spectrum, according to Sen. Ron Wyden (D-Ore.). 

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