TODAY'S TOP PARAGRAPH: Sen. Dianne Feinstein gets behind the USA Freedom Act (but will push some changes). Verizon threatens to sue Netflix over congestion messages. Broadcasters are not happy with the FCC's spectrum auction rules, but the wireless industry likes the rules just fine. Republican senators are warning the FCC not to overturn state laws to allow for municipal broadband. Encryption software OpenSSL, still hurting from the Heartbleed bug, discovers another security flaw.
FEINSTEIN TO PUSH USA FREEDOM: The Intelligence Committee chairwoman still likes her NSA bill (the FISA Improvements Act), but she acknowledges that Congress will need to pass more-sweeping reforms in order to reauthorize the business-records program before it expires next year. In her opening statement at yesterday's hearing, she noted the White House support for reform and said the big House vote in support of the USA Freedom Act "sends a very loud signal" to the Senate to act.
"I believe we should take a close look at the House legislation with a view to its passage, perhaps as amended, in the Senate," Feinstein said.
But she said the House's definition of a "specific selection term" is confusing, and that she wants to "find a clearer and more understandable definition and make clear that it prohibits bulk collection of information."
...BUT OTHER SENATORS WORRY BILL GOES TOO FAR: "If it ain't broke, don't fix it" was the message many senators sent during yesterday's hearing, saying the bill passed by the House could jeopardize U.S. security. Senators, including Democrat Jay Rockefeller and Republican Susan Collins, questioned the premise that Americans' data is safer in the hands of private companies than a very small number of government employees. "I don't think it makes any sense," Rockefeller said. The senators took issue with the bill's vague language spelling out what kinds of data the government could request.
Another area of concern is the absence of a concrete data retention requirement. Without a set length of time that companies need to keep data, "we might as well not have this program," ranking member Saxby Chambliss said at the hearing.
SENATE FINANCE COMMITTEE TO INVESTIGATE ECONOMIC IMPACT OF SURVEILLANCE LEAKS: Sen. Ron Wyden said the committee, which he chairs, will hold a hearing on the economic impact of the NSA spying revelations on U.S. companies.
VERIZON THREATENS TO SUE NETFLIX OVER MESSAGE: Verizon is threatening to sue Netflix over a message the video site is displaying that blames the Internet provider for poor streaming quality. Verizon denied Netflix's accusations in a cease-and-desist letter yesterday, saying there is "no basis" for the site's claims, and if anyone is at fault, it is Netflix for deciding not to connect directly with Verizon's network. (Sasso, NJ)
... BUT MESSAGES AFFECT MORE THAN VERIZON: A Netflix spokesman clarified that the messages are appearing for customers of many Internet providers—not just Verizon. "It is a small national test with a couple hundred thousand Netflix members," Joris Evers explained.
BROADCASTERS: 'VOLUNTARY' SPECTRUM AUCTION DOESN'T FEEL ALL THAT VOLUNTARY: The National Association of Broadcasters said Thursday the FCC's rules for the upcoming spectrum auction turn Congress's goals for the auction "on its head." In a statement expanding their position from earlier this week, the NAB said that by failing to ensure that broadcasters who skip the auction will not incur costs, the FCC's rules implicitly prioritize the wireless industry over broadcasters and "the balance Congress painstakingly achieved evaporates."
MEANWHILE, WIRELESS INDUSTRY FEELS GOOD ABOUT THE RULES: CTIA said Thursday that the rules "strike the right balance" and "represent a significant step towards a successful auction."
GOP SENATORS WARN FCC NOT TO NULLIFY STATE LAWS: The idea that the FCC would overturn state laws to allow for competition from municipal broadband is "deeply troubling," write Republican Sens. Deb Fischer, Ron Johnson, Ted Cruz, Marco Rubio, and others. In the letter, they urge FCC Chairman Tom Wheeler to "respect state sovereignty."
NEW BUG DISCOVERED IN POPULAR ENCRYPTION SOFTWARE: A new security flaw was discovered in OpenSSL, the popular encryption protocol that is still hurting from the Heartbleed bug. (Nicole Perlroth, NYT)
JUDGE ORDERS NSA TO PRESERVE DATA: The Electronic Frontier Foundation won a motion in its long-running battle with the NSA over spying under Section 702. (Josh Gerstein, Politico)
HOUSE REPUBLICANS ASK GAO TO STUDY INTERNET SHIFT: The Energy and Commerce Committee lawmakers, who are also pushing legislation on the issue, asked the Government Accountability Office to prepare a report on the administration's plan to give up authority over the Internet's address system.
COMCAST COMPLETES NECESSARY MERGER FILINGS: Comcast filed its application with the FCC Thursday for a spin-off company, the last of the initial filings needed to begin the vetting process of its proposed merger with Time Warner Cable. (John Eggerton, Broadcasting & Cable)
SOFTBANK'S CHIEF STEPS INTO THE SPOTLIGHT: For Japanese mogul Masayoshi Son, a Sprint-T-Mobile merger is a crusade against the big guys. (Michael J. De La Merced, NYT)
SOFTBANK'S NEW ROBOT HAS A 'HEART': Pepper can sense and react to human emotion, the company says, making it the first robot with such capabilities. (Megumi Fujikawa, WSJ)
ROAD SIGNS VULNERABLE TO HACKERS: The Homeland Security Department warns a security flaw has left some electronic safety signs on highways open to hackers. (Brown, NJ)
SENATORS WORRY ABOUT IP TRANSITION: Some senators expressed concern that the technology switch could leave people without reliable phone service. (Kate Tummarello, The Hill)
FCC SAYS IT WILL READ EVERY NET-NEUTRALITY COMMENT: A team of about a dozen people will sort through every public comment—60,000 and counting—and flag a few for FCC leaders. (Natalie Andrews, WSJ)
PRIVACY CHANGES NEED TO START WITH THE TECH COMPANIES: Tech companies want Congress to reform the surveillance program, but there is still a lot more that they themselves can do to protect users' privacy. (Brett Max Kauffman, Slate)
ANDREESSEN CALLS SNOWDEN A 'TRAITOR': Netscape founder-turned-venture capitalist Marc Andreessen said Snowden's NSA surveillance leaks are "letting the American tech industry out to dry," in an interview Thursday. (CNBC)
SCOTUS: THE ONLY THING STANDING BETWEEN AEREO AND A TV REVOLUTION: Aereo CEO Chet Kanojia says he doesn't want to ruin broadcasters or the cable industry—he wants to make it better. (Scott Helman, Boston Globe)
WILL THE TECH INDUSTRY PUSH CAMPAIGN FINANCE REFORM? Tech may be the one industry with both the political clout and desire to help reform campaign finance laws—and some entrepreneurs are spending big to prevent … big spending. (Noam Scheiber, TNR)
VODAFONE SAYS SOME GOVERNMENTS HAVE DIRECT ACCESS TO CALLS: The world's second-largest mobile company says a few countries have direct access to its networks, allowing officials to eavesdrop on calls. (Sarah Young, Reuters)