The Federal Communications Commission wrote to Verizon (PDF) and several cable firms on Thursday asking for more information on a proposed sale of $3.6 billion in unused spectrum to the wireless firm. The transaction included commercial agreements under which both sides would agree to promote and sell each other's products, raising fears of collusion and reduced competition from public interest groups and competitive rivals. The portion of the firms' initial FCC filings describing the side agreements were heavily redacted, prompting critics to demand full details on the side agreements. The firms involved say the side agreements are separate from the spectrum transfer, a claim that has been challenged.

On Thursday the agency asked Verizon and the four cable firms involved (Comcast, Bright House, Cox and Time Warner Cable) for more information on the transaction, and suggested the side agreements may be inextricably linked to the deal. Stifel Nicolaus analysts said they remain skeptical the FCC will block the spectrum transfer outright, but suggested some conditions could be added to the deal to address some of the objections raise.

Cyber-Exercise Simulated Attack on New York City: The senators that took part in Wednesday evening's cyberbriefing staged for their benefit by the administration got a first-hand look at how the federal government would respond to an attack on New York City's power grid during a heat wave. Officials taking part included Homeland Security Secretary Janet Napolitano and National Security Adviser John Brennan.

The exercise is part of the administration's efforts to lobby Congress into passing comprehensive cybersecurity legislation that would implement new baseline security standards for the private sector networks deemed most crucial to national security. The Senate is divided over a comprehensive cybersecurity bill (S 2105) from the leadership of the Homeland Security and Commerce committees that would implement such regulations, which have drawn stiff opposition from chamber Republicans.

Quotable: "Yesterday's exercise, undertaken at the Senate's request, illustrated the potential consequences of a hypothetical cyberattack against United States' critical infrastructure networks and how the administration’s legislation would enhance our ability to work with industry to prevent attacks and limit their aftereffects. It is critical that we strengthen our cybersecurity posture, and we urge Congress to recognize the need for new tools to more effectively prevent and respond to potential cyberattacks on the homeland, including risk-based performance standards to ensure the most vital of critical infrastructure systems for the nation to meet a baseline level of security." -- John Brennan, about the exercise. Tech Industry Group Applauds House Small Biz Package: The tech industry cheered the passage of House legislation Thursday designed to help start-ups and smaller firms raise capital and go public more easily. CQ's Charlene Carter and Niels Lesniewski report that the bill (HR 3606), which would ease SEC reporting requirements for small businesses, passed 390-23. The legislation would also permit crowdfunding, the practice of using the Web and social media to raise money for new businesses, without registering with the SEC. Individuals could invest up to $1,000 and companies could issue up to $2 million in securities without having to register. The new threshold for having to register would be 2,000 owners, an increase from the current threshold of 500. The Senate is poised to take up the bill, with Majority Leader Harry Reid, D-Nev., indicating he will seek a conference to iron out differences between the two chambers. NAB Says FEC Is Proper Home for Political Files: The National Association of Broadcasters filed comments with the FCC on Thursday arguing against forcing stations to post political records online. Groups and individuals that purchase radio or TV ads for electioneering must already disclose to the Federal Election Commission all individuals that provide more than $200 in funding. The broadcasters say the FCC lacks the authority to impose such a requirement, and that Congress expressly intended to make the FEC the home of such records online as part of the Bipartisan Campaign Reform Act of 2002 (PL 107-155). EFF Says Apps Need Privacy Policies: The Electronic Frontier Foundation posted an article Thursday about Highlight, an app they say is poised to be this year's breakout hit at the South by Southwest tech conference in Austin. Highlight runs in the background of a user's phone, collects location data and lets users know if their friends or people with shared interests are nearby. But the app's lack of a posted privacy policy concerns EFF, which noted the omission remains common in the app industry.

"App developers need to think about both policies and practices from a privacy perspective, and do their part to respect their users from the ground up. Highlight may yet come out of South by Southwest as the most-buzzed about new service. But unless they remedy their privacy problems, they could be undone just as quickly by another privacy scandal." -- EFF's Parker Higgins