AAF Government Report

April 16, 2010

Clark Rector Jr., Executive Vice President – Government Affairs

Alaina Flaherty, Federation Intern

Internet Companies Split Over Broadband Reclassification

In a recent decision, the DC Circuit Court of Appeals unanimously ruled that the Federal Communications Commission did not have the authority to direct Comcast Corporation to lift limits imposed on certain kinds of Internet traffic. The ruling puts into doubt the degree of jurisdiction the agency has over the Internet and the authority to impose so called "net neutrality."

Some members of Congress and FCC Chairman Julius Genachowski are discussing whether to reclassify broadband as a telecommunications service. It is currently considered to be an information service. The FCC has much greater authority to impose rules and regulations over telecommunications services, such as traditional landline telephone services. Attempting to reclassify broadband – either at the FCC or in Congress – is likely to be very controversial.
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FTC Receives Complaints About Online Advertising

A number of public interest groups have urged the Federal Trade Commission to investigate two new trends in online advertising. First, is the real-time sale and trade of the ability to provide individual users with online advertising based on the individual's Internet use. The second is the selling of outside sources of data along with data about internet usage to advertising companies.

The interest groups would like the FTC to require that these companies require obtain a consumer's opt-in consent before the firms engage in real-time online tracking and serving of advertising. They also want an assurance that consumers are compensated for the use of their data. They have suggested the FTC should issue a report within six months on the privacy issues at hand.

Two of the companies targeted by the groups, Google and Yahoo!, are members of the self-regulatory Network Advertising Initiative.
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FTC Promotes Self-Regulation for Children's Television

Citing First Amendment concerns, the FTC did not call for more Federal Communications Commission regulation to protect children in a multiplatform media environment. The Commission did renew its recommendation that media companies step up their self-regulatory efforts. The FTC has studied various areas of child programming, including violent content and marketing of snack foods.

The FTC has a study due next year to determine whether media companies have taken the Commission's earlier recommendations to expand their self-regulatory efforts to cover all forms of advertising and promotions. They will also explore whether companies have limited their use of character licensing to healthier foods and beverages.

The FTC continues to favor self-regulation in the area of violent content, but said that "marketers can do much more to restrict the promotion of mature-rated or-labeled products to children."

The Commission said mobile applications are changing the way children are accessing entertainment and that the industry needs to help provide parents with information and effective parental controls.
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FCC Chairman Supports Reassigning Spectrum

In a speech to the National Association of Broadcasters, FCC Chairman Julius Genachowski defended his recommendation that large parts of television spectrum space should be reassigned to mobile carriers.

The FCC wants to reallocate up to a third of current TV airwaves as part of its long-term national broadband plan. The Chairman is deeply concerned that demand for wireless Internet spectrum space is on track to exceed the available supply.

Broadcasters are concerned that the FCC plan would threaten the future of over-the-air television reception, denying the most vulnerable Americans - including the elderly and poor - the ability to receive free television programming.

Chairman Genachowski stressed that the program on the table is a voluntary one, but argued that broadcasters could benefit by having more choice and flexibility in their business models.
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