Five tech issues to watch

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The New Year could bring a flurry of activity on technology policy.

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With leaks about the National Security Agency (NSA) continuing to trickle out and a new chairman settling in at the Federal Communications Commission, 2014 is shaping up to be a busy year.

Here’s a look at the five issues likely to dominate the tech agenda.

1. NSA reform

The push to rein in the NSA is gaining momentum on Capitol Hill. A federal judge has declared the NSA's phone data collection unconstitutional (the government is expected to appeal), and President Obama's own review group has recommended sweeping reforms.

It seems nearly a forgone conclusion that Congress will enact some kind of NSA reform legislation — but how far that legislation will go remains an open question.

The leaders of the House and Senate Intelligence Committees are fierce defenders of the NSA and want minor changes aimed at improving trust in the agency. But dozens of other lawmakers, including members of the Judiciary committees, are calling for more substantial changes.

President Obama will announce in January which of the review group recommendations he supports, opening a new chapter in the fight.

2. Patent legislation

Congress passed major patent reform legislation just a few years ago, and most observers predicted it would be a generation before Congress returned to the issue.

But the problem of "patent trolls" — firms that use bogus patent suits to extort settlements out of businesses — has escalated so quickly that Congress is now poised to pass new legislation to curb abuse.

Silicon Valley, retail groups and other business interests are lobbying hard for legislation to crack down on patent trolls. But one major fissure has emerged —Google wants companies to be empowered to challenge the validity of software patents, while Microsoft strongly opposes the proposal.

Some judges and trial lawyers have also expressed concern about a provision that would force courts to award legal fees to winning parties in certain cases.

The House approved patent legislation from Judiciary Committee Chairman Bob Goodlatte (R-Va.) in December, and the Senate Judiciary Committee is expected to move its own bill in the New Year.

3. Net neutrality

The controversy over net neutrality could be reignited in 2014.

The D.C. Circuit is expected to rule on the FCC's regulations in January, and based on the oral argument in September, it's not looking good for the FCC. Two of the three judges on the panel appeared ready to strike down significant portions of the rules, which bar Internet service providers from discriminating between websites.

Supporters of the rules argue that they are critical for protecting an open and free Internet, while critics say they unnecessarily restrict the business choices of Internet providers.

If the FCC loses, it will force new FCC Chairman Tom Wheeler to make a difficult decision. He could reclassify how the FCC regulates broadband Internet, which would put the rules on firmer legal ground but would spark a major political battle with congressional Republicans.

Wheeler has said he is a strong supporter of net neutrality, but it is unclear whether he would want to relitigate the fight that sapped much of the energy from his predecessor, Julius Genachowski.

4. Spectrum auction

The top priority for FCC chief Wheeler is holding a successful auction of spectrum —the frequencies that carry all wireless traffic. The actual auction won't take place until 2015, but the FCC will have to make the most important decisions about the rules in 2014.

The FCC plans to encourage some TV stations to give up their broadcast licenses for auction to cellphone carriers, which have been struggling to keep pace with the skyrocketing demand for streaming videos, downloading apps and browsing the Web.

The government, meanwhile, is counting on the auction to generate billions of dollars in deficit reduction and to pay for a nationwide high-speed wireless network for first responders.

Smaller cell carriers and many Democrats are urging the FCC to restrict the ability of Verizon and AT&T, the two largest carriers, to bid in the auction. They argue that the industry giants could buy up enough spectrum to stifle their competitors.

Republicans argue an unrestricted auction would be the most fair and would produce the most revenue for the government.

Wheeler will also have to decide how much spectrum to set aside for unlicensed use, which powers technologies such as WiFi.

5. Merger mania

Speculation is swirling about whether Sprint, the third largest cellphone carrier, will try to buy T-Mobile, the No. 4 carrier.

A Sprint-T-Mobile merger would have to survive intense scrutiny from the FCC and the Justice Department's Antitrust Division. In 2011, the regulators blocked AT&T's bid to buy T-Mobile, citing the importance of having four national carriers for a competitive marketplace.

But Sprint is much smaller than AT&T and would have a better shot at surviving the antitrust review. Dish Network is also reportedly interested in buying T-Mobile, which would raise fewer antitrust concerns since it would maintain four national competitors.

The cable industry could also see consolidation in 2014. Comcast, Charter and Cox are all reportedly interested in buying Time Warner Cable, the nation's second largest cable operator. In an unusual move, Republican FCC Commissioner Ajit Pai predicted that the FCC would block Comcast from acquiring Time Warner Cable.

Any major takeover bid in the wireless or cable industries would likely prompt a fierce lobbying battle involving the companies trying to merge, others in the industry and consumer groups.

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