Cell Phone Unlocking Ban Criticized by White House and FCC Chairman

By J. Bradford Currier and Nickolas Milonas

The ban on unlocking cell phones to enable their use on different wireless networks announced late last year may be reconsidered following recent criticism of the rule by the White House and FCC Chairman Julius Genachowski. As we discussed here previously, the Copyright Office of the Library of Congress announced the ban as part of its triennial review of the copyright exemptions under the Digital Millennium Copyright Act, which eliminated an exemption for unlocking devices in place since 2006. Under the new rule, devices purchased before January 26, 2013 can still be unlocked by users, but devices bought after that date can be unlocked only with the carrier’s permission, even after the service contract expired.

The unlocking ban drew criticism, and a public petition was soon started on the White House website asking the President to support legislation making unlocking legal and to request that the Copyright Office reconsider its decision. After receiving over 100,000 signatures, the White House responded in support of the petition, stating that it was “common sense” that consumers who purchased cell phones and are no longer bound by service agreements should be able to use their devices on another network. The White House argued that unlocking ensured a “vibrant” wireless market and was strongly supported in the recommendations of the National Telecommunications and Information Administration to the Copyright Office. The response also noted that permitting unlocking is particularly important for secondhand devices that consumers may buy or receive as gifts. 

FCC Chairman Genachowski echoed the White House’s response, stating that the ban “raises serious competition and innovation concerns.” As the Copyright Office is within the Library of Congress, an agency of the legislative branch, the White House and the FCC Chairman agreed to work together with Congress to develop “legislative fixes,” clarifying that copyright law does not prevent consumers from switching carriers when they are no longer bound by a service agreement. The Copyright Office subsequently responded to the criticism, stating that the unlocking ban “would benefit from review” by Congress and was not meant to foreclose broader public policy discussions on the issue. 

Consumer groups praised the White House and FCC’s actions and argued that the unlocking ban should be reconsidered as part of a comprehensive review of current copyright laws. In contrast, wireless industry groups argued that reconsideration of the ban would be unfair to carriers because they often offer consumers significantly discounted prices for devices in exchange for long-term service agreements. 

While the support of the President and FCC places pressure on Congress to act on the unlocking ban, industry observers note that a legislative solution regarding unlocking may be hard to reach in the currently divided Congress. The current political climate has not stopped members of Congress from announcing efforts to craft such legislation, but it remains to be seen whether efforts to overturn the unlocking ban will be successful.

FTC Chairman and Experts to Examine Mobile and Online Privacy in Upcoming Webcast

A live webcast program entitled Privacy Untangled, featuring Federal Trade Commission Chairman Jon Leibowitz and an expert panel will be carried on Broadband US TV on Friday, October 26, 2012, from 1:00-2:30 p.m. ET.

Balancing privacy with commercial interests has become increasingly complex and contentious, as businesses and government organizations rely on the collection, storage, and sharing of online and mobile consumer data. Recent regulatory initiatives, including the White House’s proposed Consumer Privacy Bill of Rights and related workshops, and the privacy enforcement actions and best practices reports of the FTC have placed evolving privacy practices in the spotlight. In addition, privacy watchdog groups continue to criticize the government’s privacy initiatives as insufficient, while service providers complain of the government over-reaching in its regulatory approach towards industry privacy practices.

An in-depth examination of these issues will be provided in a live webcast with co-hosts Marty Stern of K&L Gates and Jim Baller of the Baller Herbst Law Group. In addition to special guest FTC Chairman Jon Leibowitz, the program will feature an expert panel with Sue Kelley, American Public Power Association General Counsel; Deborah J. Matties, Attorney Advisor to FTC Chairman Leibowitz; Emily Mossberg, Principal at Deloitte & Touche LLP; Ross Shulman, Public Policy and Regulatory Counsel at the Computer and Communications Industry Association; Bernin Szoka, President at TechFreedom, and Peter Swire, former Chief Counsel for Privacy under President Clinton and current professor at the Ohio State University.

The panel will engage in a lively discussion regarding privacy issues and the government’s recent initiatives to adjust privacy regulations for an evolving online and mobile marketplace.

You can register for the webcast here (free registration required).

US Ignite Broadband Initiative to be Examined in Live Webcast

As a part of its recent push to encourage high-speed broadband deployment nationwide, the White House recently announced the creation of the public-private “U.S. Ignite” initiative aimed at providing next-generation broadband networks to support education, manufacturing, health, transportation, public safety, and clean energy systems. Consisting of nearly 100 corporations, municipalities, and non-profit organizations, the initiative hopes to interconnect communities with advanced fiber networks in order to facilitate sharing of knowledge, skill, and applications in critical public service areas.

An in-depth review of the US Ignite initiative and the opportunities it presents for communities, broadband providers, application developers, and other stakeholders will be provided in a live webcast carried on Broadband US TV on Wednesday, July 25, 2012, from 1:00-3:00 p.m. (EST). Co-hosts Marty Stern of K&L Gates and Jim Baller of the Baller Herbst Law Group will be joined by an expert panel featuring Sue Spradley, Executive Director of US Ignite; William Wallace, Project Director of US Ignite; Link Hoewing, Vice President of Internet and Technology Policy at Verizon; Suzi Iacono, Senior Science Advisor at the Directorate for Computer and Information Science and Engineering of the National Science Foundation; Will Barkis, Gigabit Developer Evangelist at the Mozilla Foundation; Scot Rourke, CEO of OneCommunity; Tegene Baharu, Deputy Chief Technology Officer for the District of Columbia; and Jim Ingraham, Vice President of Strategic Planning for Chattanooga EPB.

The panel will engage in a lively discussion of the goals of the US Ignite initiative, potential challenges, and opportunities for cities, broadband providers, application developers, and others.

You can register for the webcast here (free registration required).

Obama Administration Pursues Mobile Privacy Code of Conduct

By J. Bradford Currier and Marc Martin

The National Telecommunications and Information Administration (“NTIA”) will hold its first meeting on July 12, 2012 aimed at developing voluntary codes of conduct designed to provide consumers with clear information regarding how personal data is handled by companies which develop and offer applications for mobile devices. The NTIA’s planned meetings with stakeholders were first announced in February 2012 as part of the White House’s proposed Consumer Privacy Bill of Rights. The NTIA meeting comes as both the Federal Trade Commission and Federal Communications Commission have recently taken action to improve consumer transparency and privacy safeguards for personal information collected by mobile apps.

A number of stakeholders have already filed comments expressing their support for improving the clarity and comprehensiveness of privacy disclosures provided to mobile app consumers. However, a number of commenters noted that the rapid pace of innovation in the mobile app market and the relatively small screen sizes of current mobile devices will make long-term, definitive disclosure rules difficult to develop. While NTIA hopes to tackle a number of Internet policy topics, including copyright and cybersecurity issues, the organization chose mobile app privacy as the first meeting topic because it believes consensus on a code of conduct can be reached “in a reasonable timeframe.” NTIA expects the mobile app privacy meeting will serve as a useful precedent for later discussions involving other online consumer protection concerns.

The NTIA meeting is open to all interested stakeholders and a venue should be announced before the end of the month. Interested stakeholders are asked to inform NTIA online in advance if they plan to attend the meeting.

Mobile App Platforms Reach Voluntary Agreement with California State Attorney General

By Samuel R. Castic and J. Bradford Currier

Californians who download mobile applications on their smartphones, tablets and other mobile devices should soon have greater knowledge of how their personal information is collected and used under a non-binding Joint Statement of Principals recently reached between six mobile app platforms, such as Apple, Inc., and the California Office of the Attorney General. The California announcement comes just days after the Federal Trade Commission warned app developers to improve privacy disclosures for mobile apps directed at children and within hours of the White House’s announcement of a Consumer Privacy Bill of Rights to protect citizens online.

Although the agreement does not create any new legal obligations for app providers, the parties agreed to voluntarily abide by five privacy principles: 

(1) Any app that collects personal data from a user, regardless of age, “must conspicuously post a privacy policy or other statement describing the app’s privacy practices” that informs the user how the data will be used and shared. California law already requires websites and online services to post privacy policies when they collect personally identifiable information about users. Despite this obligation, the California Attorney General reported that only 5 percent of mobile apps currently offer a privacy policy, although other parties suggest that the figure is approximately 33 percent. The agreement makes clear that the California Attorney General views mobile applications as online services subject to this law. 

(2) The agreement modifies the app submission process to make it easier for app developers to include a link to, or the text of, the privacy policy governing the app. However, the agreement contains no commitment by app platforms to notify users when a privacy policy changes. 

(3) The app platforms will create reporting procedures for users to identify apps that do not comply with applicable terms of service or applicable law. 

(4) The app platforms agreed to implement a response process to handle reported violations of app privacy policies. 

(5) The parties agreed to work together to develop “best practices” for mobile privacy policies. 

While no timetable exists for implementation of the agreement, the parties agreed that they will reassess the state of app privacy policies in within six months.

White House Super Committee Proposal Includes Spectrum Auction Plan

By Marc Martin and Marty Stern

The White House released its economic growth and deficit reduction proposal yesterday, which contains provisions for “incentive auctions” that were included as part of the American Jobs Act announced by President Obama last week. The proposal was part of the President's recommendations to the Joint Select Committee on Deficit Reduction, the so-called “Super Committee,” which has been tasked under the Budget Control Act with finding reportedly $1.5 trillion in long-term deficit reduction measures by late November. As we noted in our previous post regarding the Jobs Bill, incentive auctions would allow broadcast spectrum licensees to give up portions of their spectrum for auction by the FCC in return for a portion of the auction revenue. The FCC would then use the additional auction revenue to fund the creation of a nationwide, interoperable wireless network dedicated to public safety, with the remainder going towards deficit reduction. The plan projects revenue of approximately $24 billion from the incentive auctions, with $7 billion in auction proceeds and additional spectrum valued at $3 billion being used for the new public safety network. In addition, the FCC would be directed to collect $4.8 billion in spectrum licensing fees over the next ten years.

The incentive auction/public safety spectrum recommendation contained in the growth and deficit reduction plan, as with the Jobs Bill, is modeled on legislation introduced by Sen. Jay Rockefeller (D-WV) and Sen. Kay Bailey Hutchinson (R-TX),which has faced stiff opposition from House Republicans over the past year. As has been expected, the Super Committee approach provides yet another vehicle for the Obama Administration to press for incentive auction legislation, with the version in the American Jobs Act already introduced in the House and Senate. As with the Jobs Bill offered last week, the President's growth and deficit reduction recommendationsare silent on preserving unassigned spectrum for unlicensed use, including TV White Spaces (i.e., unassigned broadcast spectrum being developed for new "Super WiFi" broadband applications). As we noted in our Jobs Bill post, this has raised concerns from tech quarters that had been largely aligned with the Administration on spectrum policy issues.