Heat over FCC hires

Federal Communications Commission (FCC) officials are feeling heat from the left over an economist who was hired to help improve the nation’s high-speed Internet service despite dismissing concerns that U.S. broadband access lags behind other nations.

Scott Wallsten, a senior fellow at the Technology Policy Institute, joined the FCC’s Broadband Task Force last month. He previously worked at the Progress and Freedom Foundation and the American Enterprise Institute, where he often took the position that the U.S. broadband market is in good shape and does not need to be addressed by policymakers.

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Liberal public interest groups say that’s a curious background for someone whose job is to create policy to increase broadband access.

“It definitely raised a lot of eyebrows,” said Art Brodsky, communications director at Public Knowledge.

International rankings have shown U.S. leadership in broadband access and speed has been slipping for several years — the country now ranks 15th in the world — prompting policymakers to work on ways to improve the country’s competitive standing.

Congress called on the FCC to come up with a comprehensive plan to solve the problem.

Lawmakers will get their first chance to question the FCC about its plans on Thursday, as the agency’s five members appear for an oversight hearing before the House Energy and Commerce’s Subcommittee on Communications, Technology and the Internet. It is the first time all five members will appear together on Capitol Hill.

Wallsten in 2006 co-wrote a report disputing that the United States has fewer Internet connections than other countries do. In a June report, he wrote that broadband penetration is increasing rapidly in all major countries and that average U.S. Internet speeds do not lag far behind.

The furor over Wallsten’s hiring had largely fizzled until surfacing again this week during a panel discussion. Bruce Kushnick, executive director of New Networks Institute, a telecom research group, said Wallsten has not disclosed that companies such as AT&T, Verizon and Comcast funded his think tank research. Kushnick calls Wallsten’s involvement in the broadband planning process an “egregious display of corporate influence.”

Joe Waz, Comcast’s senior vice president, responded that Wallsten’s former employers properly disclose funding sources. Others in the industry say there’s nothing wrong with having varied perspectives in the broadband planning process.

Wallsten said in an e-mail that he understands the concerns of the public interest groups, but his work at the FCC is rooted in economics, “focusing especially on trying to fill the gaps in the empirical economics literature necessary to informing the plan.”

The dust-up comes as controversy swirls around another FCC hire. Mark Lloyd, the newly appointed chief diversity officer, used to be a senior fellow at the Center for American Progress and, while there, wrote a paper on ways the FCC could encourage more voices on talk radio by imposing new regulations on the industry.

Sen. Chuck Grassley (R-Iowa), as well as some conservative radio personalities, raised concerns that Lloyd’s hiring indicated that the agency would change rules pertaining to local stations’ licenses and could bring back the Fairness Doctrine, an abandoned policy that required stations to give equal time to differing political views.

Transparency for TARP

On Thursday, two days after President Barack Obama called for “greater transparency and accountability” on Wall Street, the House Financial Services Committee will take a look at how technology can help reach that goal.

In March, Rep. Carolyn Maloney (D-N.Y.) introduced a bill that would amend last year’s Emergency Economic Stabilization Act to more closely monitor the $700 billion under the Troubled Asset Relief Program (TARP). She proposed creating a central database that would track how those dollars have been spent and repaid. Sen. Mark Warner (D-Va.) has introduced a companion bill.

Several technology companies see a big opportunity to build and maintain that database. Teradata, an Ohio data-warehousing company, has been advising Maloney on the technical aspects of how such a system would work. The SAS Institute, a partner of Teradata’s and one of the biggest developer of business intelligence tools, will also be testifying in front of the committee Thursday morning.

“The idea is to collect all the information into one spot and ensure everyone has access,” said Dilip Krishna, vice president of financial services and insurance for Teradata, who will be testifying Thursday. “Beyond TARP and tracking those dollars, a big benefit is to be able to predict how things will work and flag problems that come up.”

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Ari Schwartz, vice president and chief operating officer for the Center for Democracy and Technology, a civil-liberties advocacy group, said he “supports the idea of getting this information into a central database.” But he plans to tell the committee that the database should also be available online, which is not currently mandated in the bill.

“With all the discussion of how money is being spent and repaid, the reporting we’ve been getting isn’t sufficient,” he said.
There will likely be some concerns from lawmakers about the cost of building the database. Financial institutions will likely push back against any new reporting requirements. And the Treasury Department may bring up concerns about the privacy implications of putting this data online.