OVERNIGHT TECH: Consumer groups to protest Comcast deal

THE LEDE: A slew of left-leaning and consumer advocacy groups are urging lawmakers to oppose Comcast’s proposal to buy Time Warner Cable for $45 billion.

Ahead of a Senate Judiciary Committee hearing on Wednesday that will serve as a critical public forum for proponents and critics of the deal, opponents are warning  the merger will raise consumer costs and lead to poor service for consumers.

In a statement ahead of the hearing, Public Knowledge President Gene Kimmelman warned that the proposal “would have dire consequences for innovative online service providers and for consumers."

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The merger, he added, “would give Comcast the incentive and ability to stifle competition, thwart innovation from online services, and impose higher costs on rival video and online services, which will eventually be paid for by consumers.”

Additionally, more than 50 organizations including Consumers Union, MoveOn.org and Free Press sent a letter to Attorney General Eric Holder and Federal Communications Commission (FCC) Chairman Tom Wheeler protesting the deal on Tuesday. The groups said the merger would amount to a “massive consolidation” that “would give Comcast unthinkable gatekeeper power over our commercial, social and civic lives.”

Kimmelman will testify before the Senate panel alongside top executives from Comcast and Time Warner Cable, officials from smaller cable and Internet companies and a law professor from the University of Pennsylvania.

The cable company executives will likely echo the central argument of a 180-page document filed with the FCC on Tuesday alleging that the massive merger would lead to faster Internet and better service for subscribers. The companies’ major competitors, they have said, are national and global technology and communications firms like Apple, Netflix and Verizon, not other cable companies. The merger is necessary to invest in new resources to compete with those giants and offer subscribers better services.

A handful of conservative groups like Americans for Tax Reform, the Competitive Enterprise Institute and National Taxpayers Union backed up that viewpoint in a letter to senators this week. The proposal, they wrote, “poses no harm to consumers or any worrisome accumulation of market power.”

“We believe that absent clear evidence of market failure, the market will allocate resources in a manner that is the most pro-consumer,” they added.

Lawmakers have been reluctant to tip their hand too much ahead of the hearing. In his opening statement, Judiciary Committee Chairman Patrick Leahy (D-Vt.) will say on Wednesday the deal “raises important questions about diverse and independent video programming, and promoting a vibrant marketplace for online video,” according to prepared remarks. “Our primary focus throughout should be on how this merger would impact consumers.”

Patent friction continues: As time dwindles before next week’s recess, Senate Judiciary Committee members are still working to reach a patent reform compromise. For the third time in almost two weeks, Leahy delayed a markup of his bill to curb “patent trolls” — the companies that profit from bringing and threatening to bring meritless patent infringement lawsuits — as he negotiated with committee members over contentious proposals. The biggest sticking point is “fee-shifting,” a proposal being floated by Sens. John Cornyn (R-Texas) and Orrin Hatch (R-Utah) that would require the losing party of a meritless infringement suit to pay the winning party’s fees.

Announcing the delay on Tuesday, Leahy pointed to inaction from committee Republicans, whom he said hadn’t provided feedback on a draft being circulated by Sen. Charles Schumer (D-N.Y.). Committee Republicans, including Hatch and Judiciary ranking member Sen. Chuck Grassley (R-Iowa), said bipartisan negotiations continue, while Cornyn pointed to infighting among committee Democrats, some of whom are pushing back on the fee-shifting provision.

Schumer denied that the negotiations have gotten more political as the committee approaches recess.

“I’m still talking to Cornyn, to Leahy, to all the groups,” he said. “It’s hard, I wouldn’t deny that, but ... I’m still hopeful that we can get a compromise.”

Schumer noted the high number of “moving parts” involved in the negotiations. “We’ve got a lot of work to do,” he said.

If lawmakers can’t get that work done before the markup now schedule for Thursday, they’ll have to pick up where they left off after a two-week recess.

Online privacy, data breach top list of worst laws: Laws that would threaten the online ad ecosystem and data breach notification laws top this year’s list of worst laws from NetChoice, an Internet industry group representing Facebook, Yahoo, LivingSocial and eBay. In its annual iAWFUL list, the group took aim at state online privacy laws targeting data-reliant Internet advertising that “would drive websites into showing a higher volume of low quality ads to make up lost revenue.” Next on the list, the group warned about an “impossible patchwork” of state data-breach notification laws — fueled by recent high-profile data breaches, including at Target — that “could impede investigations” and “desensitize consumers to situations where a notice truly does merit their immediate attention."

Further down on the list are privacy bills about young and teenage Internet users, potential laws that would require retailers to warn customers when they’re being tracked throughout a store and “the ongoing threat of federal legislation” that could create a difficult-to-navigate interstate online sales tax system.

See the full list here.

FCC bill pulled from Senate Commerce markup: The Senate Commerce Committee won’t be taking up an effort to put limits on the number of reports the FCC submits to Congress. The Federal Communications Commission Consolidated Reporting Act was originally scheduled for a markup on Wednesday but was dropped from the panel's schedule on Tuesday.

Study: Internet cuts depression: A new study published in the Journals of Gerontology found that Internet use reduces depression in older, retired people by 34 percent. That finding should encourage the government to support programs that aim to extend high-speed broadband Internet access to older Americans, according to the Phoenix Center, a think tank. 

 

ON TAP

The Computer and Communications Industry Association is hosting a daylong event at D.C.'s Newseum. Reps. Jared Polis (D-Colo.), Anna Eshoo (D-Calif.), Doris Matsui  (D-Calif.) and Zoe Lofgren (D-Calif.) are all scheduled to deliver remarks, as will officials from the Commerce Department, the Federal Trade Commission and other government arms.

The Senate Judiciary Committee hears from Comcast and Time Warner Cable executives at 10:00 a.m.

 

IN CASE YOU MISSED IT

The Senate Judiciary Committee's consideration of Chairman Patrick Leahy's (D-Vt.) patent reform bill, scheduled for Tuesday afternoon, has been pushed back again.

Rep. Jared Polis (D-Colo.) likely became the first member of Congress to own bitcoin. 

The Obama administration is promising to come back to Congress with additional reforms of government spying operations. 

Rep. Lee Terry (R-Neb.) said is working on a bill to address demand letters from “patent trolls.” 

Last year was the “year of the mega breach” at retailers and other websites, according to analysis from a top cybersecurity firm.

 

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