The Federal Communications Commission on Thursday approved a measure mandating that companies such as AT&T and Verizon let smaller telecommunications carriers use their networks for mobile Internet service, a practice that is now voluntary.

The FCC vote was, however, divided along party lines, with three Democrats voting for the measure and two Republicans voting against it, according to a Bloomberg report.

Major mobile carriers are already required to forge agreements with smaller rivals for voice data, and the addition of Web traffic is essentially an extension of that rule, the report said.

Both AT&T and Verizon, the two largest cellular operators in the U.S., opposed the measure, Bloomberg said.

"Consumers expect mobile data services that will allow them to remain connected wherever they go; a data roaming rule will help ensure that consumers' services are not interrupted and that coverage is available on a competitive basis," the FCC said in a statement on the new rule.

"The widespread availability of data roaming arrangements will allow consumers with mobile data plans to remain connected when they travel outside their own provider's network coverage areas by using another provider's network. This promotes connectivity and nationwide access to mobile data services such as email and wireless broadband Internet access."

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Former FCC Chairman Michael Powell to lead cable TV's top lobbying group

FCC chairman unveils plans to overhaul fund for rural high-speed Internet access

-- Nathan Olivarez-Giles

twitter.com/nateog

Former Federal Communications Commission Chairman Michael Powell has been named the new head of the leading cable TV trade association.

Powell will become president and chief executive officer of the National Cable and Telecommunications Assn., taking on the role of "the cable industry’s leading advocate, spokesman, and representative in its relationship with the U.S. Congress, the administration, the FCC, and other federal agencies," the group said Tuesday in a news release.

"Michael Powell is one of the most well respected and influential visionaries in all of telecommunications, and we’re so proud to have him join the cable team," said NCTA board Chairman Patrick J. Esser, the president of Cox Communications.

The NCTA represents dozens of companies, including leading cable and Internet providers such as Comcast Corp. and Time Warner Cable and top programming networks, including Discovery Communications Inc. and Disney Media Networks. The association's companies provide service to more than 90% of the nation's cable TV households.

Powell, the son of former Secretary of State Colin Powell, has been a senior advisor with Providence Equity Partners, a private equity firm focused on media and communications.

“Cable is a dynamic and highly innovative industry, providing cutting-edge services and content that Americans love,” Powell said.

He left the FCC in 2005 after more than seven years as a commissioner, including a controversial four-year tenure as chairman. Powell led an aggressive crackdown on over-the-air obscenities while at the same time pushing to scale back the government's role in the telecommunications industry. He championed a loosening of media ownership rules that was later struck down by the courts.

At the NCTA, Powell replaces Kyle McSlarrow, who left this month to head Comcast's Washington office.

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FCC chairman unveils plans to overhaul fund for rural high-speed Internet access

-- Jim Puzzanghera

 Photo: Michael Powell in 2003. Credit: Associated Press.

  Federal Communications Commission Chairman Julius Genachowski on Monday unveiled a plan to overhaul a much-criticized program that helps provide phone service to far-flung rural areas, proposing to focus it on expanding high-speed Internet access to those same locations.

The $8-billion Universal Service Fund is paid for by telecommunications companies, who must contribute a percentage of their long-distance revenue, often passing those fees on to their customers. The decades-old program has successfully spread phone service to residents in hard-to-reach areas that often are unprofitable for companies to serve, Genachowski said in a speech to the Information Technology and Innovation Foundation.

But the fund has become highly inefficient, he said. In some cases, it pays more than $20,000 a year to provide a single home with phone service.

"The program is still designed to support traditional telephone service. It’s a 20th century program poorly suited for the challenges of a 21st century world," Genachowski said. "In its current state, the program is not getting the job done. It’s leaving millions on the outside looking in, and wasting taxpayer dollars every year."

Reforming the Universal Service Fund was a priority of the FCC's National Broadband Plan, which was released last year with a goal of ensuring that at least 100 million homes have access to affordable  networks delivering Internet services at speeds much faster than today by 2015.

Genachowski said in an interview that his main goal is to modernize and streamline the fund.

"We want to eliminate the waste and inefficiency from the program as it exists now and then use those savings to fund Internet service in unserved America," he said.

Genachowski's plan calls for major changes, particularly to the complex payments known as Intercarrier Compensation that telecommunications pay each other as they transmit calls over their networks. He wants to use the savings from that and other changes to help pay for a new Connect America Fund.

"At the end of this transition, we would no longer subsidize telephone networks; instead we would support broadband," Genachowski said in his speech. "As we do this, we will make sure that all Americans continue to have access to voice service and can make calls from their homes. Voice will be ultimately one application that consumers can use over their fixed or mobile broadband connections."

The FCC is set to take an initial vote on the plan Tuesday, starting the process of receiving public comments on the new rules.

Telecommunications companies have pressed for years for changes to the Universal Service Fund and Genachowski said he has received positive feedback from the industry to his ideas.

"There’s certainly difference of opinion about the best way to fix it. Those are questions we have to resolve," he said in the interview. "It’s understood the program itself is unsustainable."

Verizon said it supported Genachowski's call for changing the fund and said he presented " a good road map."

But Genachowski is wading into controversial territory. Some rural lawmakers want the Universal Service Fund expanded to extend high-speed Internet access, while others have called for the fund to be eliminated because they said it is no longer necessary.

Genachowski said he's trying to chart a middle course and rejected calls for killing the fund.

"While the world has changed, the importance of universal service has not," he said in his speech. "We simply shouldn’t let millions of Americans be bypassed by the broadband revolution."

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-- Jim Puzzanghera

 Photo: FCC Chairman Julius Genachowski. Credit: Los Angeles Times

Connecticut Atty. Gen. George Jepsen said Friday his office has entered into settlement negotiations with Google over private data its Street View cars collected from unsecured networks there.

As part of the deal, Google acknowledged that its Street View cars gathered information including partial or complete e-mails and addresses of requested Web pages, Jepsen said.

The agreement will allow the Internet search giant and a 40-state coalition led by Connecticut to engage in talks "without the need for a protracted and costly fight in the courts," he said.

Jepsen said he is prepared to file a lawsuit if settlement talks break down.

Connecticut had issued a civil investigative demand, which is similar to a subpoena, to obtain the data Google collected. Google rejected the demand from Connecticut's then-Atty. Gen. Richard Blumenthal.

The Federal Communications Commission said in November it was probing whether Google broke federal law in collecting consumer data via Wi-Fi networks. The Federal Trade Commission closed its investigation of Google's data collection in October.

For years, Google's fleet of Street View cars have compiled images of streets that are displayed in its online mapping service. At the same time, the vehicles scanned wireless networks to better pinpoint the location of users on mobile phones. Google said the vehicles inadvertently collected personal information.

In a statement Friday, Google said it was "profoundly sorry for having mistakenly collected payload data from encrypted networks."

Consumer Watchdog spokesman John Simpson objected to the settlement talks. 

"The details of the biggest privacy breach in history shouldn't be settled in secret," he said.

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-- Jessica Guynn

Verizon Communications went to federal court Thursday to try to stop the Federal Communications Commission's new rules to guarantee open Internet access.

In a widely expected move, the telecommunications giant told the U.S. Court of Appeals for the District of Columbia that the FCC exceeded its authority when it enacted regulations last month to forbid owners of high-speed lines and airwaves from favoring their services over those of competitors.

"We are deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself," said Michael E. Glover, Verizon's deputy general counsel. "We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers.”

The FCC voted 3 to 2 along party lines last month to enact the regulations to ensure so-called net neutrality, a top priority of President Obama and FCC Chairman Julius Genachowski. The rules prohibit phone and cable companies that provide high-speed Internet service from blocking their customers' access to any legal content, applications or services.

The rules are tougher on wired service than on the still-developing market for wireless Internet service. And after years of debate, the regulations did not go as far as some Democrats and many digital rights advocates had wanted. That led to qualified support from some telecommunications companies, such as AT&T Inc.

But many congressional Republicans were outraged by the FCC's move and have pledged to try to stop it. Verizon, which said it is committed to an open Internet, has been outspoken in arguing the new regulations are not needed.

Genachowski's office did not immediately comment on the Verizon appeal.

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-- Jim Puzzanghera

Photo: Consumer Electronics Association president and Chief Executive Officer Gary Shapiro, left, greets Verizon Communications Inc., chairman and Chief Executive Officer Ivan Seidenberg, right, and president and Chief Operating Officer Lowell McAdam during the Consumer Electronics Show, in Las Vegas on Jan. 6, 2011. Credit: Julie Jacobson/AP Photo

The Obama administration doesn't want dangerous prison inmates, such as convicted mass murderer Charles Manson (pictured above), to make calls or send text messages from contraband cellphones because of the possibility that they could direct new crimes.

But federal officials also don't want to go so far in trying to jam those communications that they create problems for nearby public safety workers or average citizens, according to a new government report. A possible solution: more limited technologies that would let prison officials block calls only from unapproved devices, the report said.

"The administration believes that contraband cellphone use by prison inmates to carry out criminal enterprises is intolerable and demands an effective solution," the Commerce Department said in the 58-page report. "Prison officials should have access to technology to disrupt prison cellphone use in a manner that protects nearby public safety and federal government spectrum users from harmful disruption of vital services, and preserves the rights of law-abiding citizens to enjoy the benefits of the public airwaves without interference."

In late 2009, Congress directed government officials -- including the Federal Communications Commission, the Federal Bureau of Prisons and the National Telecommunications and Information Administration -- to look into technologies that could prevent the use of cellphones by inmates.

A law enacted in August bans cellphones from federal prisons, but it does not apply to state facilities. In California state prisons, for example, inmates are not supposed to have cellphones, but there is no law that makes possessing one a crime or that imposes penalties on visitors who smuggle them in.

The issue gained new attention last month when The Times reported rampant use of contraband cellphones in state prisons, including by Manson, who was caught hiding a cellphone under his mattress.

"A cellphone these days, it seems, is something the average American cannot live without. Apparently, neither can the nation’s inmates, and it is a major public safety concern," Jamie Barnett, chief of the FCC's Public Safety and Homeland Security Bureau, said in a blog post about the goverment report.  "Today, prisons across the nation are reportedly confiscating thousands of cellphones from inmates monthly, yet this contraband is still being used by inmates daily."

The number of cellphones confiscated in California prisons has jumped dramatically since 2007, state officials said. The FCC has resisted calls to allow prison officials to jam cellphone signals. Barnett said the federal Communications Act disallows such jamming devices, so Congress would have to change the law. And jamming can interfere with nearby police, fire and other emergency communications systems.

The Commerce Department report makes no recommendations, instead reviewing the pros and cons of different technologies to stop inmates from making calls with contraband cellphones.

This year California will test one technology, called managed access, with which officials can block calls that do not come from a list of phones approved to transmit through nearby towers. The system enabled Mississippi state officials to block more than 216,000 unauthorized calls and text messages in its first month in operation last summer.

The Commerce Department report goes to Congress, which could consider legislation.

California also could enact new laws. Former Gov. Arnold Schwarzenegger vetoed a bill last year that would have imposed a $5,000 fine on anyone caught giving a cellphone to a prisoner, arguing that it wasn't tough enough.

The bill's sponsor, state Sen. Alex Padilla (D-Pacoima), hopes to try again this year with Democrat Jerry Brown as governor.

 -- Jim Puzzanghera

Photo: Charles Manson at a 1986 parole hearing. Credit: Associated Press

In a highly controversial vote, the Federal Communications Commission on Tuesday approved new regulations for Internet access designed to prevent large telecommunications companies from squashing competitors.

The so-called net neutrality rules prohibit companies that provide high-speed Internet service from blocking access by customers to any legal content, applications or services, such as using the free Skype online phone service. 

For the first time, there will be government regulations to keep information flowing freely on the Internet and requiring Internet service providers to give customers more details about how they run their networks.

The rules will be tougher on wired Internet service from cable and phone companies than it will be on such service provided by wireless carriers because that market is in an earlier stage of development and is evolving quickly.  For wired services, the FCC added an additional rule prohibiting Internet providers from “unreasonable discrimination” in how they treat access to content and services.

The goal of that regulations is to prevent companies that provide Internet access from giving priority to their own offerings , such as the ability to watch TV shows or movies online, or slowing the delivery of services from competitors.

The FCC vote Tuesday was the culmination of more than five years of debate over whether regulations were needed. The rules are expected to come under tough congressional scrutiny and be challenged in court by telecommunications companies.

Read on:

The Federal Communications Commission isn't releasing details of Chairman Julius Genachowski's latest proposal for Net neutrality rules, but staffers provided a couple of revealing clues Wednesday. 

First, the proposal doesn't back away from any of the six principles Genachowski laid out in his first Net neutrality speech in September 2009: the "four freedoms" endorsed by the FCC under the two previous Republican chairmen, plus requirements that broadband providers manage their networks transparently and without discriminating unreasonably among the various content sources, service providers and applications.

Second, the proposal mirrors a draft bill that Reps. Henry Waxman (D-Calif.) and Rick Boucher (D-Va.) tried to push through the House Energy and Commerce Committee earlier this year, only to be blocked by a senior Republican. That measure -- which was backed by at least one key Republican on the committee, some broadband providers, tech industry players and advocacy groups -- would have been less intrusive than the FCC's original rulemaking proposal. More important, it would have barred the FCC from reclassifying broadband as a telecommunications service, which could have made it subject to price regulation and a host of other potential rules.

In particular ...

This month, U.S. regulators will look -– again –- at how to hammer out so-called open Internet traffic rules that have been hotly contested by both broadband service providers and consumer groups.

Regulations set up by the five-member Federal Communications Commission at its Dec. 21 meeting could determine whether companies such as Verizon Communications Inc. or AT&T Inc. could block or slow Internet traffic.

The standards, known as Net neutrality rules, could also have implications on the protections for wireless Internet users.

“The fact is that no outcome will please every stakeholder,” said Dean Garfield, chief executive of the Informationa Technology Industry Council. “At the same time, prolonging the Net neutrality policy limbo benefits no one -– especially consumers.”

Chairman Julius Genachowski has previously tried to draw broadband companies under strict regulations usually seen in the telecommunications industry, but was stymied by court challenges.

Web companies such as Google Inc. and Amazon.com Inc. weighed in as phone and cable companies lobbied hard for free rein to manage their networks in the name of innovation and competition.

But a proposal floated by Genachowski could ban a practice known as “paid prioritization,” in which carriers charge companies to speed up access to their content while slowing traffic to competitors.

Public advocacy groups have said that creating such a “fast lane” could create a discriminatory, uneven playing field for users while providers and some lawmakers argue that prohibiting it would stall investment.

Read on for industry reactions:

Hewlett-Packard will pay $16.5 million to the federal government following an "extensive investigation" into the company for alleged fraud in its participation with the government's E-Rate program, the Justice Department said Wednesday. 

E-Rate pays for Internet connections at schools and libraries around the country. The program came under scrutiny from the Federal Communications Commission and Justice Department after whistle-blowers alleged that contractors working with HP and other companies bribed school employees to win contracts.

The contractors plied school officials in Dallas and Houston with lavish gifts, including meals, trips on a yacht and tickets to the 2004 Super Bowl, the Justice Department said. In return, the school employees supplied the contractors with inside information that helped them secure contracts, including for about $17 million in HP equipment.

As part of the civil settlement, the FCC will oversee a compliance agreement with HP to ensure that the company does not violate rules in the future, the Justice Department said. Most of the $16.5 million will be returned to the E-Rate program.

"If HP fails to monitor its E-Rate activities closely and abide by E-Rate program requirements, it will face substantial penalties," Austin Schlick, the FCC's general counsel, said in a statement.

To discourage future abuses, the FCC adopted additional rules in September to promote competitive bidding in school districts.

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-- Shan Li

 Photo: Paul Sakuma/AP Photo