The measure had been viewed as one of the few that might draw enough bi-partisan support to get through the largely deadlocked Congress. Experts say there is an urgent need to address vulnerabilities of both government and private systems controlling everything from highway traffic to financial services.

But the Senate mustered just 52 of the 60 votes needed in the 100-member body to advance the bill to a final vote, effectively sidelining it.

Business groups including the U.S. Chamber of Commerce complained that the bill was over-regulation by the government, and some Republicans wanted more opportunity to push their amendments.

There is still a slim chance for passage before January, when the current Congress ends. But with the session winding down ahead of the November 6 congressional and presidential elections and tied in knots over partisan issues involving taxes and spending, cybersecurity may fall to side.

The House of Representatives passed a narrower version in April, and the Senate bill needed to pass this week to give lawmakers from both chambers time to informally broker a deal on final legislation during the August recess, said Stewart Baker, a former senior official at the Department of Homeland Security and now a cybersecurity expert at the law firm Steptoe and Johnson.

The House version would allow companies and the government to share information about hacking. The current version of the Senate bill took a broader approach that would also create a set of voluntary cybersecurity standards for companies in charge of U.S. energy, water, transportation and other critical infrastructure.

(Reporting By Jasmin Melvin; Editing by Sandra Maler and Vicki Allen)

The Democratic-led Senate this week has been debating a bill
that would allow information sharing and create a set of
voluntary cybersecurity standards for companies in charge of
U.S. energy, water, transportation and other critical
infrastructure.

But it was unclear whether it had enough support to be
brought to a vote this week before the Senate recesses for about
a month.

To underscore the bill’s importance, the administration held
a media conference call with officials from the White House,
Cyber Command, Pentagon and Department of Homeland Security to
talk about how vital the legislation was to protect U.S.
computer networks from hacking.

The Republican-controlled House of Representatives passed a
cybersecurity bill in April that would allow companies and the
government to share information about hacking. The Senate
version is broader.

“We see the threat as real, and we need to act now. From our
perspective the dangers to our critical infrastructure are
growing,” General Keith Alexander, director of the National
Security Agency and head of U.S. Cyber Command, told reporters.

He said there had been “over a 20-fold increase in attacks
on critical infrastructure” from 2009 to 2011.

Senate Majority Leader Harry Reid has called it “the most
serious threat to our nation since the dawn of the nuclear age.”

Yet doubts resound among Washington insiders whether Reid
can get the votes needed to push this legislation forward. If
the Senate does not pass a bill this week, cybersecurity
legislation will likely be stalled until next year.

“There have been extensive hearings on this. There have been
extensive briefings. I’m just very puzzled as to why individuals
would oppose this,” John Brennan, homeland security adviser to
President Barack Obama, said.

The bill’s critics, including Republican Senators John
McCain, Saxby Chambliss and Kay Bailey Hutchison, have offered
amendments that would strip some of the privacy protections and
the framework for cybersecurity standards.

They have sided with the U.S. Chamber of Commerce, which has
expressed concerns that the voluntary system could too easily
become a mandatory regulatory scheme enforced on businesses.

MCCAIN LEGISLATION

McCain introduced more narrowly tailored legislation in
March, co-sponsored by Chambliss, Hutchinson and five other
Republicans, that promotes information sharing and creates
criminal penalties for cybercrimes.

That bill, more in line with legislation passed in the
Republican-controlled House, does not set out a federal plan for
overseeing cyber threats nor does it seek security standards for
companies operating critical infrastructure.

Some Republicans have offered amendments that would
substitute McCain’s bill for the broader Senate version.

The current version of the Senate bill adds provisions to
protect the privacy and civil liberties of Americans while
allowing companies and federal agencies to more quickly share
real-time data on cyber threats.

Companies that operate critical infrastructure and that
choose to voluntarily adopt the standards would not be held
liable for any punitive damages if a cyber attack occurred while
they were complying with the standards. Other incentives would
include expedited processing of security clearances and faster
access to technical assistance on cyber issues.

Reid on Wednesday made a procedural move to set a limit on
debate on the Senate floor, which signaled that there was still
no agreement on how many amendments would be considered. A total
of 218 amendments have been offered.

Brennan said Obama has been receiving regular updates on the
status of the Senate bill and has spoken to members of Congress.

“He strongly, strongly believes that this nation’s
well-being is at risk from cyber attacks and intrusions, and
believes it is imperative if we are going to protect this
country, particularly our critical infrastructure, that the
Cybersecurity Act of 2012 passes,” Brennan said.

(Reporting By Jasmin Melvin)

The Federal Trade Commission would make websites, mobile
apps and data brokers all responsible for data collected about
children by third parties like data brokers, strengthening a
proposed update of its Children’s Online Privacy Protection Rule
that it had released last September.

Previously it was unclear who had responsibility for third
party collection.

“The commission did not foresee how easy and commonplace it
would become for child-directed sites and services to integrate
social networking and other personal information collection
features into the content offered to their users, without
maintaining ownership, control or access to the personal data,”
the commission said in its proposed rule.

The proposal also specifies that family websites, which are
websites aimed at children and adults, would be allowed to
screen users to determine their ages and only provide
protection to children under age 13.

Currently, all visitors to the websites must be treated as
if they are under age 13.

A privacy expert said the rule proposal could expand the
reach of the Children’s Online Privacy Protection Act (COPPA).

Any website directed at children that adds social networking
plug-ins like Facebook Inc’s “like” feature or that works
with a third-party ad network to generate revenue could be held
liable, under the proposal, if that data collection occurs
without parental consent, said David Jacobs, consumer protection
fellow at the Electronic Privacy Information Center.

“That’s a good development,” Jacobs said.

The FTC said ad networks and plug-ins would not have to
probe or monitor whether their services were used on
child-directed services, but if they have a “reason to know”
then they could not ignore that information and would need to
comply with COPPA.

“Before you could turn a little bit of a blind eye (to
children on websites like Facebook) but if this rule is adopted
as proposed it will be significantly harder to do that,” said a
privacy attorney who spoke anonymously to protect business
relationships.

Facebook, which one study found has 7.5 million children as
members even though it bans the 12-and-under set, said it was
reviewing the FTC’s proposal.

“While Facebook’s policies prohibit children under the age
of 13 from signing up for our service, we are committed to
improving protections for all young people online and helping
them benefit from new services and technologies,” said Andrew
Noyes, the company’s public policy communications manager.

The FTC’s proposal updates the definition of “personal
information” to require parental permission before identifiers
like IP addresses, that can be used to recognize a user over
time or across different sites or services, could be collected
while children surf the Internet.

Data-collecting tracking cookies placed on a computer were
added to the definition of “personal information” last September
since they can be used to identify the computer’s user.

The proposal is open for comment until Sept. 10. The
commission will then come out with a final rule, perhaps by the
end of the year.

The COPPA law requires that website and online service
operators obtain verifiable consent from parents before
collecting, using or disclosing personal information of children
under 13.

The FTC’s rule implementing COPPA became effective in 2000.

After an FTC rule is approved, companies may be vulnerable
to expensive class action lawsuits, said legal information
technology expert Daren Orzechowski from the law firm White and
Case, LLP.

“Any time you pass a new law or regulation you have to look
at how the class action bar will take advantage of that,” he
said.

Lawmakers and privacy advocates have argued that tech
companies are generally not doing enough to safeguard their
customers’ privacy.

The FTC and White House unveiled earlier in the year privacy
frameworks that would give all Internet users, not just those
under 13, greater control over how their personal data is
collected, shared and used by advertisers and tech companies.

Those frameworks rely heavily on voluntary commitments by
Internet companies and advertisers.

The U.S. telecommunications regulator said the payment stemmed from a probe into whether Verizon Wireless, the biggest U.S. mobile service provider, had complied with rules governing spectrum used for high-speed wireless services.

Verizon Wireless purchased the so-called “C Block spectrum” in an auction, with the understanding that the airwaves were subject to rules that bar carriers from restricting devices or applications customers can use.

The FCC’s Enforcement Bureau opened an investigation after reports surfaced that Verizon Wireless had Google Inc, the developer of Android mobile phone software, disable tethering applications, which allow for the use of a mobile phone as a modem to provide wireless Internet access for another device such as a tablet.

Verizon Wireless charges an extra monthly fee to customers using smartphones for tethering, but the apps allowed users to tether without paying the additional fee.

Public interest group Free Press filed a complaint in June 2011 charging that the carrier was violating its C Block conditions.

“Verizon Wireless has always allowed its customers to use the lawful applications of their choice on its networks, and it did not block its customers from using third-party tethering applications,” Verizon said in a statement.

“This consent decree puts behind us concerns related to an employee’s communication with an app store operator about tethering applications, and allows us to focus on serving our customers,” the statement said.

In addition to the $1.25 million fine, the consent decree forces Verizon Wireless to notify Google that it may again offer the tethering apps to Verizon customers.

The company will also provide employees with training on C Block compliance, have legal counsel review communications with app store operators before they are sent and report any instances of noncompliance to the FCC for the next two years.

Verizon Wireless customers with usage-based plans will also be able to tether using any app without being charged.

“The steps taken today will not only protect consumer choice, but defend certainty for innovators to continue to deliver new services and apps without fear of being blocked,” FCC Chairman Julius Genachowski said.

Free Press applauded the agency for sending a strong signal that companies cannot ignore their pro-consumer obligations.

“We remain concerned that consumers of other carriers lack the same basic protections that Verizon’s customers have under the law,” Matt Wood, Free Press’ policy director, said.

(Reporting by Jasmin Melvin; Additional reporting by Sinead Carew in New York; Editing by Gary Hill and David Gregorio)

The court denied an emergency motion from the National Association of Broadcasters to stop the rules from taking effect during a larger judicial review.

The Federal Communications Commission adopted the rules in April to provide insight on campaign spending ahead of November’s congressional and presidential elections. They will reveal who is paying for political campaign ads and just how much they are shelling out.

The NAB has said its members stand to lose millions of dollars in ad revenue because cable and Internet competitors, who are not subject to the rules, will get an unfair advantage for political advertising.

“We continue to believe it is fundamentally unfair for local TV stations to be the only medium required to disclose on the Internet sensitive advertising rate information,” Dennis Wharton, NAB’s executive vice president of communications, said in a statement.

The trade group filed its emergency motion with the U.S. Federal Court of Appeals for the District of Columbia Circuit earlier in the month. The D.C. appeals court said in a filing that the trade group had not met “the stringent requirements for a stay pending court review.”

The four biggest TV broadcasters in the top 50 media markets will have to upload their political files to a database hosted on the FCC’s website beginning August 2.

TV stations have been making public their paper records of campaign advertising buys and other community-related issues since 1938 as part of their public interest obligation. But obtaining those files is currently a time-consuming, labor-intensive task.

The data broadcasters will post online includes detailed information on who paid for political ads, key personnel of the groups buying ads, when political ads aired and rejections of requests to buy air time.

The four biggest broadcasters are ABC, operated by Walt Disney Co, CBS Corp, News Corp’s Fox, and NBC, controlled by Comcast Corp.

The NAB filed a petition for review in April with the D.C. appeals court, charging that the rules are arbitrary, capricious, violate free speech protections in the U.S. Constitution and go beyond the FCC’s statutory authority.

That court challenge still stands, and will be debated on the merits, Wharton said.

The FCC declined to comment.

(Reporting by Jasmin Melvin; Editing by Jan Paschal)

The court denied an emergency motion from the National
Association of Broadcasters to stop the rules from taking effect
during a larger judicial review.

The Federal Communications Commission adopted the rules in
April to provide insight on campaign spending ahead of
November’s congressional and presidential elections. They will
reveal who is paying for political campaign ads and just how
much they are shelling out.

The NAB has said its members stand to lose millions of
dollars in ad revenue because cable and Internet competitors,
who are not subject to the rules, will get an unfair advantage
for political advertising.

“We continue to believe it is fundamentally unfair for local
TV stations to be the only medium required to disclose on the
Internet sensitive advertising rate information,” Dennis
Wharton, NAB’s executive vice president of communications, said
in a statement.

The trade group filed its emergency motion with the U.S.
Federal Court of Appeals for the District of Columbia Circuit
earlier in the month. The D.C. appeals court said in a filing
that the trade group had not met “the stringent requirements for
a stay pending court review.”

The four biggest TV broadcasters in the top 50 media markets
will have to upload their political files to a database hosted
on the FCC’s website beginning Aug. 2.

TV stations have been making public their paper records of
campaign advertising buys and other community-related issues
since 1938 as part of their public interest obligation. But
obtaining those files is currently a time-consuming,
labor-intensive task.

The data broadcasters will post online includes detailed
information on who paid for political ads, key personnel of the
groups buying ads, when political ads aired and rejections of
requests to buy air time.

The four biggest broadcasters are ABC, operated by Walt
Disney Co, CBS Corp, News Corp’s Fox,
and NBC, controlled by Comcast Corp.

The NAB filed a petition for review in April with the D.C.
appeals court, charging that the rules are arbitrary,
capricious, violate free speech protections in the U.S.
Constitution and go beyond the FCC’s statutory authority.

That court challenge still stands, and will be debated on
the merits, Wharton said.

The FCC declined to comment.

The agency voted 3-2 along party lines last week to require
Comcast to move the independent Tennis Channel within 45 days to
a tier in line with and reaching the same number of subscribers
as the tier carrying Comcast’s Golf Channel and NBC Sports
Network.

The ruling is the first time a cable network has prevailed
over a cable operator under the FCC’s 1993 federal
anti-discrimination program carriage rules.

FCC Chairman Julius Genachowski and his fellow Democrats on
the panel, Mignon Clyburn and Jessica Rosenworcel, concluded in
an order released late Tuesday that discrimination in favor of
Comcast’s affiliated networks “unreasonably restrained Tennis
Channel’s ability to compete.”

Comcast was also ordered to pay a $375,000 fine.

“This decision could not have come at a better time for
Comcast customers across this country, as we approach Tennis
Channel’s coverage of the U.S. Open beginning Aug. 27,” the
network said in a statement.

Comcast could have had to add the network to an additional
18 million households, incurring millions of dollars more in
programming costs that it will owe the Tennis Channel – an
expense likely to trickle down to Comcast subscribers.

Comcast, the largest U.S. cable company and the top
broadband provider, said it will appeal the decision to the
courts and examine options for requesting a stay of the decision
from going into effect.

The Tennis Channel filed a complaint with the FCC in 2010,
alleging discriminatory treatment. It sought wider distribution
on par with other networks, which would attract more advertising
revenue and increase fees calculated on a per-subscriber basis
that Comcast paid to air its content.

Comcast contended that its 2005 contract with the network
stipulated placement in a more expensive sports tier sought by
fewer subscribers, and said a move would impose higher costs on
its basic cable subscribers.

An FCC administrative law judge ruled last December in favor
of the Tennis Channel’s argument that it was losing out on
revenue by not being included in Comcast’s basic programming
package, in contrast to sports networks owned by Comcast.

Comcast was granted an interim stay from the FCC, which
required the full commission to vote on the matter and allowed
Comcast to leave the channel where it was until that vote.

“The decision will accomplish nothing other than to drive up
programming costs and enrich a group of wealthy investors in the
Tennis Channel,” said Comcast/NBCUniversal Washington President
Kyle McSlarrow in a statement.

Comcast acquired a 51 percent stake in NBC Universal from
General Electric Co last year.

McSlarrow argued the decision misapplies statutory standards
for discrimination and competitive harm, ignores evidence from
unbiased cost-benefit analyses and violates Comcast’s First
Amendment rights.

FCC Republican Commissioners Robert McDowell and Ajit Pai
agreed with the cable operator’s assessment that the Tennis
Channel’s placement was not discriminatorily motivated by
ownership interests.

McDowell and Pai noted in their dissent that no major pay TV
provider in 2010 when the complaint was filed found the Tennis
Channel to warrant similar distribution to the Golf Channel and
NBC Sports Network, previously called Versus.

The ruling, they said, will lead to cable and satellite
operators carrying more “networks they do not want, on tiers
with broader penetration, and at higher prices than ever before”
to stave off discrimination complaints.

The stalemate could lead to a legislative crackdown on Internet privacy if left unresolved.

That has firms like Google Inc and Facebook Inc that rely heavily on collecting user data worried that any legislation could lead to cuts in online advertising that would eat into their profits.

The U.S. administration has looked to an Internet standards setting body, already eyeing a “Do Not Track” mechanism and with an aggressive timeline in place, to corral everyone into a room and onto teleconferences to reach a deal.

With over 10 months of talks under the group’s belt, they are still talking but are arguably no closer to an agreement than when they started. The sides are so far apart that they don’t even agree on what “Do Not Track” means.

To privacy advocates, it is halting data collection so a consumer can surf the Web without any prying eyes collecting information about their online activities for economic gain. To the industry, however, it means not targeting ads to a consumer based on their Web viewing history, but data collection would continue for other purposes.

The next step, if no consensus is reached by year’s end, will likely test regulatory and congressional threats of legislation to enforce Internet privacy.

This puts Internet companies in the midst of an existential dilemma as their business models rely on consumers parting with their personal information to bolster ad revenue.

“We want to reduce the profile, the data footprint of citizens who increasingly spend a lot of time online today,” said Jeffrey Chester, executive director of the Center for Digital Democracy, a nonprofit active in policing privacy.

Online advertisers and Web companies say such data is now the lifeblood of the Internet.

“If you get rid of that, you kill the Internet. It’s just that simple,” Linda Woolley, executive vice president of government affairs at the Direct Marketing Association, said of the dangers of ceasing data collection.

What some once viewed as a sideline – collecting and selling consumers’ data to advertisers – the Internet ecosystem took on as its main source of revenue, in return providing consumers with free Web content and services.

With more sophisticated data mining, more prevalent ad targeting and more cognizant Internet users, companies are starting to see fallout from this relatively novel way of doing business.

Any clamp down on data collection deals a blow to their bottom lines. Targeting has almost tripled what brands pay websites to run ads, and companies like Google and Facebook rely heavily on advertising for the bulk of their revenue.

U.S. online ad revenue was just shy of $15 billion in the first half of 2011, 23 percent higher than the previous year.

Yet abuses in which companies are not honest about how they exploit their users’ movements on the Internet threaten to drive users away, another hit to revenue.

“If you have a business model that relies on spying on your customers, as people begin to understand that, there will be tremendous push back,” said John Simpson, privacy project director for the nonprofit Consumer Watchdog.

HOW WE GOT HERE

Some browsers, including Mozilla’s Firefox, Microsoft Corp’s Internet Explorer and Apple Inc’s Safari, allow consumers to indicate that they do not want to be tracked as they surf the Web. But under current regulations, websites and advertisers can ignore these requests.

The Obama administration has called for a universal “Do Not Track” system with industry buy-in.

The concept has floated around since consumer groups asked the U.S. Federal Trade Commission(FTC) in 2007 to create a “Do Not Track” list for online advertisers, which would work like the “Do Not Call” registry that caused telemarketing industry havoc.

The FTC first endorsed a “Do Not Track” tool that would convey directly to websites the user’s choice to opt out of tracking in a preliminary staff report released in December 2010.

In recent years Internet giants have gotten into trouble for various privacy abuses, including secretly tracking users’ locations and selling consumers’ data to advertisers without their knowledge. Both Google, the world’s No. 1 search engine, and Facebook, the No. 1 social networking site, reached settlements with the FTC last year because of privacy problems.

The faux pas got regulators’ attention. The White House and FTC unveiled privacy frameworks earlier this year to curtail abuses, but they relied heavily on voluntary commitments by industry players to responsibly and transparently handle information about the online activities of consumers.

The frameworks came with a caveat: “We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don’t,” FTC Chairman Jon Leibowitz said in March.

The administration is now looking to the World Wide Web Consortium (W3C), an international standards organization for the Web, to produce a “Do Not Track” tool by year’s end.

The group began talks with Internet firms, online advertisers and privacy advocates last September to define how a “Do Not Track” mechanism would work.

The added pressure from regulators in March has not triggered agreement. Instead, two very different visions have emerged – do not collect versus do not target ads.

The W3C wrapped up what was supposed to be its fifth and last face-to-face meeting of its Tracking Protection Working Group on June 22. With no consensus reached, the W3C has extended the group’s charter. Weekly conference calls resumed in July with another face-to-face meeting likely in the fall.

TWO DIFFERENT VISIONS

Industry heavyweights say the Obama administration’s push for a clear tool to opt out of tracking should only give consumers control over the type of advertising they receive.

Restricting data collection further could cause the Internet to go dark and undermine the economic health of companies, industry leaders argued at the June W3C meeting.

Advertisers point to a self-regulatory program already followed by 90 percent of the ad industry that places an “icon” on ads consumers see due to behavioral advertising.

Clicking the icon directs consumers to a website that explains why they received the ad and gives them the option to opt-out of receiving the company and ad network’s advertising. It does not stop data collection, only its use for targeted ads.

A coalition of online advertisers in February said its members would honor these “Do Not Track” requests. Twitter in May said it would support a standardized initiative to honor requests from users who do not want to be tracked.

Yet still there is no consensus on what “Do Not Track” means.

The leading “Do Not Track” proposal from the Internet industry – prepared by representatives from Google, Yahoo! Inc and consultants – would bar companies from using consumers’ personal information to target advertising to them across multiple websites if they opted out of tracking. It would, however, allow them to keep collecting data.

Privacy advocates said the industry proposal is little different from what companies are subject to now – a problem, they say, given continued reports of misuse of consumers’ data.

Consumer advocacy groups and others noted charges that Google used special computer code, or “cookies,” to trick Apple’s Safari browser so Google could monitor users who had blocked such tracking and other reported privacy violations to help make their case for stronger protections.

Last month they harped on findings that data collection allows the travel site Orbitz to identify if a user is on a Mac or PC. The online travel booking company last year began using that data to recommend pricier hotel rooms to Mac users as studies show Mac users on average are more affluent and willing to pay for more expensive hotel stays.

Simpson said industry’s proposal would do nothing to prevent a user that does not want to be tracked from having their personal information used to tailor what pricing on a website is more dominantly displayed to them.

A proposal from privacy advocates, written by the Electronic Frontier Foundation, Mozilla and Stanford University student Jonathan Mayer would bar third parties – companies with ads displayed on a page or ad networks that track users across unrelated websites – from collecting information about a user if they opt not to be tracked with limited exceptions like security and fraud prevention.

Advocates said their proposal would still allow companies that users have a direct relationship with, such as when logged into Amazon.com or YouTube, to collect personal information in order to give recommendations and otherwise tailor a user’s experience.

“If we can’t get a reasonable agreement very soon, consumer groups are going to go to the FTC and the European Union and Congress and say Do Not Track is dead on arrival and we need legislation and regulation,” Chester said.

A STALEMATE RISKS LEGISLATION

European Union proposals that would give Internet users the right to bar any collection of personal data are also putting pressure on U.S. officials to beef up privacy safeguards.

Leibowitz has been adamant that “Do Not Track” should mean do not collect data, with some narrow exceptions like fraud prevention.

“How exactly to get to that goal is still under discussion, but my sense is if there’s not a resolution from the discussions, then Congress may take a look at the issue,” said Ed Felten, the FTC’s chief technology officer.

The specter of legislation this year is generally viewed as a hollow threat given the tense, gridlocked legislative landscape. But Washington insiders say pressure from the European Union and an escape from election-year politicking will greatly increase the prospects for a bill to move next year.

Representatives Edward Markey and Joe Barton, co-chairmen of the Congressional Privacy Caucus, wrote to the W3C last month championing a “Do Not Track” definition that bars accumulating, using and sharing personal data.

“Joe Barton is one of the most conservative Republicans in the House of Representatives, and Ed Markey is one of the most liberal,” said Consumer Watchdog’s Simpson. “The fact that those two guys can come together on this leads me to believe that privacy is likely to be one of the issues where there will be bipartisan agreement about the need to do something.”

(Reporting By Jasmin Melvin; Editing by Andrew Hay)

The President’s Council of Advisors on Science and
Technology released a report calling for 1,000 megahertz of
federal spectrum to be made available for a shared spectrum
“superhighway,” double the amount of airwaves the Obama
administration said in 2010 should be freed up for mobile
broadband.

The wireless industry is pushing for access to more airwaves
because of the increasing popularity of bandwidth-hungry devices
such as Apple Inc’s iPhone and iPad as well as
smartphones based on Google Inc’s Android software.

“The norm for spectrum use should be sharing, not
exclusivity,” the report said.

The independent council of industry experts and academics
concluded that the traditional practice of relocating government
operations to alternative spectrum bands to make way for
commercial uses was not sustainable.

“Spectrum should be managed not by fragmenting it into ever
more finely divided exclusive frequency assignments, but by
specifying large frequency bands that can accommodate a wide
variety of compatible uses,” the report said.

President Barack Obama endorsed a plan in 2010 requiring 500
megahertz of spectrum be made available for wireless broadband
use within 10 years. That plan has moved forward slowly, and
federal agencies have been slow to offer up underutilized
airwaves.

The report released Friday could put pressure on agencies to
stop dragging their feet. It recommends an accounting and
incentives system that would utilize an artificial “spectrum
currency” to reward agencies for improving their spectrum
efficiency and offering airwaves for sharing.

The council proposes in the report rewarding early adopter
agencies by allowing them to trade the artificial currency for
actual dollars to upgrade their systems so they require less
spectrum in the future.

The council’s members include Google’s Executive Chairman
Eric Schmidt, Microsoft Corp’s Chief Research and
Strategy Officer Craig Mundie and Yale University President
Richard Levin.

The wireless industry has said they prefer to have full
control over the airwaves they use, warning that restrictions
put in place to protect government operations could swallow the
value of the spectrum and discourage companies from bidding.

“The gold standard for deployment of ubiquitous mobile
broadband networks remains cleared spectrum,” said Chris
Guttman-McCabe, vice president of regulatory affairs for the
wireless trade association CTIA.

An exclusive-use approach has allowed carriers to invest
billions of dollars in mobile broadband networks, and is the
approach used by countries that the United States must compete
with in the global marketplace, he added.

Operators such as AT&T Inc and Verizon Wireless, a
venture of Verizon Communications Inc and Vodafone Group
Plc, have called on the government to make good on its
promise to find more spectrum for wireless customers.

Without more efficient use of the country’s spectrum, there
is a risk consumers will experience clogged networks, more
dropped calls and slower connection speeds on wireless devices.

“While we should be considering all options to meet the
country’s spectrum goals, including the sharing of federal
spectrum with government users, it is imperative that we clear
and reallocate government spectrum where practical,” said Joan
Marsh, AT&T’s vice president of federal regulatory.

The Federal Communications Commission, which manages
commercial spectrum licenses, and the Commerce Department, which
oversees government spectrum, have been working together to
locate unused spectrum.

Overall, the 13 top U.S. broadband providers, representing four-fifths of all U.S. landline broadband connections, are coming much closer to consistently delivering their advertised speeds, the Federal Communications Commission said on Thursday.

U.S. broadband speeds on average are within 90 percent of what they promote, up from within 80 percent when the FCC issued its initial report last year.

FCC analysis concluded that the improvements were mostly due to greater investments and upgrades to broadband networks, not downward adjustments in advertised speeds.

Broadband customers, on average, subscribed to faster speed tiers and experienced actual speeds nearly 38 percent faster than a year ago, the FCC said. Consumers spent more time online and using more data-intensive services, like video streaming, the agency added.

During peak consumer usage hours when networks are busiest, actual download speeds varied from 120 percent to 79 percent of advertised speed among the different ISPs.

Verizon’s fiber network, Cablevision, Comcast Corp, Mediacom Communications and Charter Communications Inc all routinely delivered nearly 100 percent or greater of the speed advertised, even during the hours of highest demand, the FCC said.

Cablevision had been last year’s worst performer, delivering just 54 percent of its advertised speed during peak hours.

Frontier Communications Corp was at the bottom of the pack in the latest FCC report, but it still delivered 79 percent of advertised performance, reflecting the general improvement.

Frontier spokeswoman Christy Reap said the company tripled its size two years ago to cover more rural areas, and has, and will, continue to make investments to increase speed and capacity.

The FCC said the U.S. market is moving toward the agency’s goal of having at least 100 million homes with affordable access to actual download speeds of at least 50 megabits per second by 2015, and 100 Mbps by 2020, the FCC said.

Actual speeds experienced by consumers increased to 14.6 Mbps from 10.6 Mbps a year ago, according to the report. Speeds from 1 Mbps to 2 Mbps are used to stream standard video, while consumers wanting to watch full high-definition video online need speeds upwards of 5 Mbps.

The FCC said it will conduct more testing this fall and release another report by the end of the year.

“To realize the full power of broadband’s potential, we must continue to see increases in broadband speed and capacity and decreases in per gigabit costs,” FCC Chairman Julius Genachowski said.

The ISPs in the FCC study, ranked by performance as a percentage of advertised speed, were: Verizon’s fiber network (120 percent), Cablevision (120 percent), Comcast (103 percent), Mediacom (100 percent), Charter (98 percent), Time Warner Cable Inc (96 percent), Cox Communications (95 percent), Insight Communications Co (92 percent), CenturyLink Inc (89 percent), AT&T Inc (87 percent), Verizon’s DSL network (87 percent), Windstream Corp (84 percent), Qwest Communications (83 percent) and Frontier (79 percent).

(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)