May 14, 2012 (Pursuing Advertisers With Big-Top Spectacle )

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, MAY 14, 2012

Today the FCC hosts a webinar on the Broadband Adoption Lifeline Pilot Program http://benton.org/calendar/2012-05-14/

FCC AGENDA
   Rosenworcel and Pai Head Back to the FCC - analysis
   Assessment and Collection of Regulatory Fees [links to web]

PRIVACY
   FTC steps in as Obama’s chief enforcer on Internet privacy
   Facebook Shares More About How It Uses Your Data
   Google may not be evil, but it's also not trustworthy - analysis

WIRELESS/SPECTRUM
   FCC Chair Touts 'All of the Above' Spectrum Plan
   ‘Unencumbered' Spectrum Licenses Will Lead To Faster Build-Out, Says FCC Commissioner
   Three-quarters of smartphone owners use location-based services - research
   AT&T, Leap talked merger in recent months [links to web]
   Facebook Is Killing Text Messaging, Report Says [links to web]
   Verizon Deal Critics To Launch Coalition [links to web]
   CTIA: The good, the bad and the very, very ugly - editorial [links to web]

INTERNET/BROADBAND
   What the airline industry can teach us about broadband caps - analysis
   Data caps aren't perfect, but that's OK - op-ed
   "A bizarre operation": Why West Virginia stuck $22,600 routers in tiny libraries
   Frontier broadband project 'on track' in West Virginia
   California Public Utilities Commission delays taking stand on Internet phone measure [links to web]
   Cybersecurity bill hits snag

CONTENT
   Google’s head of news: Newspapers are the new Yahoo [links to web]

TELECOM
   Financial Pro Speaks Out on USF Reform

TELEVISION/RADIO
   Amid Media Upheavals, Television Holds Sway
   Pursuing Advertisers With Big-Top Spectacle
   As Talent Flees to Cable, Networks Fight Back
   A TV Schedule in the Hands of Whoever Holds the Remote - analysis
   Few TV Shows Survive a Ruthless Proving Ground
   Shows on the Brink, Saved by the Fans [links to web]
   FCC unlikely to revoke broadcasting licenses for Fox, say experts

MEDIA AND ELECTIONS
   Analyst: A Romney Win Could Be Bad News For Google
   'Hollywood's congressman' may fall

HEALTH
   Fast Access to Health Data as a patient Right [links to web]
   Health Information Technology Policy Committee Vacancy
   HHS releases privacy guide [links to web]
   Input sought on national health info network

GOVERNMENT & COMMUNICATIONS
   Court won't order Google-NSA interactions released
   Telework will play a Big Role in Government Digital Strategy, Federal CIO Says [links to web]

OWNERSHIP
   Facebook is more than the year's hottest stock story -- it's a cultural phenomenon
   Facebook’s Purchases May Hint at Its Future
   New Tech Spenders in Feeding Frenzy
   LightSquared Moves Toward Bankruptcy
   News Corp hits back at Leveson lawyer [links to web]

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FCC AGENDA

AGENDA FOR NEW FCC
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
[Commentary] On May 7, 2012, the Senate approved the nominations of Ajit Pai and Jessica Rosenworcel to serve as commissioners at the Federal Communications Commission. President Barack Obama announced his intent to nominate Pai and Rosenworcel back on October 31, 2011 and the nominations were soon sent to the Senate. On May 8, the Benton Foundation was proud to publish an op-ed by former FCC Commissioner Michael Copps who gave his take on what we can expect of an incoming FCC commissioner. Part of the pride Benton took in publishing Commissioner Copps’ expectations of FCC commissioners is that they so well align with our long-stated mission to identify and promote policy solutions that support access, diversity and equity, and ensure that media and telecommunications serve the public interest and enhance our democracy. So we believe Commissioner Copps’ op-ed provides an excellent lens through which to view some of the policy decisions that face the new FCC. Here’s a quick look at just a few of the issues that popped up in Headlines this week that the FCC will be addressing in the months ahead.
http://benton.org/node/122950
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PRIVACY

FTC AS PRIVACY ENFORCER
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The Federal Trade Commission (FTC) has carved out a new role as the Obama Administration’s chief enforcer on online privacy. The Obama Administration is pushing Congress to enact baseline privacy regulations, but for now, there are few rules governing how companies must treat people's private data. As people share more information about their lives with companies like Google and Facebook, many privacy advocates, government officials and consumers are worried about how those companies handle that data and how much access advertisers have to it. Under Chairman Jon Leibowitz, the FTC has stepped into the void as the main government agency focused on online privacy protection.
benton.org/node/122997 | Hill, The
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HOW DOES FACEBOOK USE DATA?
[SOURCE: New York Times, AUTHOR: Somini Sengupta]
How does Facebook use all the words, pictures and clicks of its 901 million users? “We’re adding more examples and detailed explanations to help you understand our policies,” Facebook’s new chief privacy officer, Erin Egan, a veteran privacy lawyer in Washington, wrote, in a blog post. The new explanations, available by clicking on the Help tab on the bottom of the Facebook home page, include one on how cookies work on the site and what information application developers receive when you download an app on the Facebook platform. The explanations also inform users about who can see what kinds of posts on their timelines. “We also provide more information about how we use data to operate Facebook, to advertise, and to promote safety and security for Facebook users,” Egan wrote. The changes come at a time when Facebook, as it goes to the public markets, will have to extract more value from its trove of personal data. In so doing, it may face more scrutiny from users and government regulators.
benton.org/node/123004 | New York Times | Facebook
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GOOGLE NOT TRUSTWORTHY
[SOURCE: Los Angeles Times, AUTHOR: Michael Hiltzik]
[Commentary] Has Google become too big to trust? To ask the question is to answer it, but in case that's not explicit enough, the answer plainly is yes. It's become impossible to ignore Google's lengthening string of privacy and regulatory missteps. The company has been found by the Federal Communications Commission to have collected and kept emails and Web browsing histories, even passwords, of individuals whose Wi-Fi signals were intercepted by vehicles photographing street scenes for its Street View program. Google stands accused of lying about the practice and resisting a government investigation of the case. The company appears to have deliberately bypassed privacy settings on the Safari browser loaded on every Apple iPad and iPhone, allowing it to secretly track the online behavior of the devices' users. That could pose an especially big problem for Google, because in doing so it may have breached a settlement it had reached in a previous federal complaint by agreeing not to misrepresent its privacy practices in the future. As if that wasn't alarming enough, Google declared March 1 that it would aggregate the information it gleaned from each user's activity on its search, mail, document and other services. The company's argument was that this would allow it to personalize all those services for each user, but it also meant that Google would have more power to exploit users' personal data than it had ever claimed before. Veteran Google watchers aren't surprised at what looks to them like the natural trend line of a company becoming too big and arrogant for its own, or its customers', good.
benton.org/node/123000 | Los Angeles Times
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WIRELESS/SPECTRUM

ALL OF THE ABOVE SPECTRUM PLAN
[SOURCE: CIO, AUTHOR: Kenneth Corbin]
Federal Communications Commission Chairman Julius Genachowski outlined an "all-of-the-above" strategy for promoting mobile broadband, touting an array of initiatives underway at the agency to free up more spectrum and use it more efficiently, and to broaden access to high-speed wireless service. In a keynote address here at CTIA's Wireless 2012 show, Chairman Genachowski reiterated the call for shifting more segments of spectrum to wireless carriers to bolster their voice and data networks to manage the proliferating volume of traffic from smartphones and tablets. "We won't seize the opportunities before us if we don't tackle this capacity challenge," Chairman Genachowski says. "The kinds of challenges we have in mobile are the kind we want -- challenges stemming from growing mobile demand." He added, "I'm sure no one will disagree -- better these challenges than the opposite. Better these challenges than shrinking demand." He announced a new spectrum-sharing program through which the FCC and the National Telecommunications and Information Administration, the division of the Commerce Department that oversees government spectrum, will begin a review of government-controlled airwaves with an eye toward enabling commercial usage of the 1755 MHz to 1780 MHz LTE band. Paired with a segment in the 2155 MHz to 2180 MHz range, the initiative would aim to bring 50 MHz of paired spectrum to auction within three years, Genachowski says, touting it as an example of the creative proposals that will need to emerge in order to address the supply-demand imbalance that has attended the mobile data crush.
benton.org/node/122980 | CIO
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UNENCUMBERED SPECTRUM LICENCES
[SOURCE: BNA, AUTHOR: Paul Barbagallo]
The Federal Communications Commission should impose as few “encumbrances” as possible on winning bidders in forthcoming “voluntary incentive auctions,” FCC Commissioner Robert McDowell said during a panel discussion at the International CTIA Wireless 2012 conference and expo May 8. Commissioner McDowell cited the example of the 700 megahertz band auction in 2008, when the FCC, at Google Inc.’s urging, imposed “open access” rules on the winner of the band's “C Block” -- Verizon Wireless. Those rules require that any compatible device, such as the Google-backed Android phones, work with any network that Verizon deploys on the C Block. The decision ultimately forced Verizon to bid a higher amount for the national spectrum licenses and accept a set of rules that it had previously sued the FCC over. Verizon had no choice but to allow Android phones on its network. “That [decision] drove deeper-pocketed bidders out of the C Block and into the A and B blocks,” Commissioner McDowell said. Because the C Block carried with it certain conditions, bidders deemed it a lesser value.
benton.org/node/122978 | BNA
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SMARTPHONES AND LOCATION SERVICES
[SOURCE: Pew Internet & American Life Project, AUTHOR: Kathryn Zickuhr]
A new report finds that 74% of smartphone owners use their phone to get real-time location-based information, and 18% use a geosocial service to “check in” to certain locations or share their location with friends. Over the past year, smartphone ownership among American adults has risen from 35% of adults in 2011 to 46% in 2012. This means that the overall proportion of U.S. adults who get location-based information has almost doubled over that time period, from 23% in May 2011 to 41% in February 2012. The percentage of adults who use geosocial services like Foursquare has likewise risen from 4% in 2011 to 10% in 2012.
benton.org/node/122976 | Pew Internet & American Life Project
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INTERNET/BROADBAND

BROADBAND CAPS
[SOURCE: ars technica, AUTHOR: Timothy Lee]
[Commentary] The comparison of broadband to airlines is instructive. The deregulation of air travel was an important achievement of the Carter Administration. Before 1978, the airline industry was a cozy cartel insulated from competition by government regulations. The elimination of these regulations allowed a number of airlines to enter the market or expand service to new cities. Fares plummeted, bringing air travel within the financial reach of many more travelers. Paradoxically, a key factor in the success of airline deregulation was that airports remained in government hands. It's a useful thought experiment to imagine what would have happened if the same policymakers who deregulated the airlines had also privatized the nation's airports by selling them to incumbent airlines. Superficially, that might look like a further step in a free-market direction, but appearances can be deceiving. Deregulation succeeded because it opened the market up to new firms. But new airlines require access to existing airports, and incumbents would have little incentive to rent gates on good terms to would-be competitors.
benton.org/node/122992 | Ars Technica
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DATA CAPS
[SOURCE: ars technica, AUTHOR: Scott Wallsten]
[Commentary] Last year, The New York Times criticized usage-based broadband pricing, noting that “Moving an extra gigabyte of data at off-peak times costs virtually nothing.” More recently, a report by the advocacy group Public Knowledge suggested that broadband data caps, a form of usage-based pricing, are an inefficient way to manage congestion. These claims are correct: while monthly caps may help control congestion if they impose binding constraints on high-volume users, pricing models truly aimed at congestion would target times and areas of congestion directly. That’s why the DC Metro system manages overcrowding by charging higher fares for travel at rush hour than for travel at off-peak times when crowds tend to be small—rather than by limiting each person’s total number of monthly rides. But the critiques miss the key point: in industries with high fixed costs and low marginal costs, aside from congestion, efficient pricing has little to do with marginal costs. Pricing at marginal cost in such industries cannot produce sufficient revenues to cover costs. Instead, efficiency in these industries requires spreading the fixed costs over as broad a customer base as possible. Efficient pricing will, in general, charge users with high demand more than users with low demand even if those users impose no additional costs on the network. [Wallsten is Vice President for Research and Senior Fellow at the Technology Policy Institute]
benton.org/node/122990 | Ars Technica
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WV BROADBAND PROJECT CONCERNS
[SOURCE: ars technica, AUTHOR: Nate Anderson]
West Virginia's Charleston Gazette has been hopping mad this week as one of its reporters learned that the state has been sticking 1,064 high-end $22,600 routers into “little public institutions as small as rural libraries with just one computer terminal.” When reporter Eric Eyre actually called up Cisco posing as a customer, he was told by a rep that the company's 3945 series routers were "our router solution for campus and large enterprises, so this is overkill for your network." Instead, the rep recommended a far cheaper commercial grade router for $500. And while the 3945 series routers might be massively overkill for many of the locations to which they have been deployed, 366 of them aren't even being used. Instead, they're sitting in a warehouse. The money for the routers came from federal stimulus funds designed to boost broadband access by better equipping public facilities like schools and libraries, especially in more rural areas. West Virginia officials decided not to vary the size of the routers they purchased based on the needs of the target facility. "A student in a school of 200 students should have the same opportunity as a student in a school with 2,000 students," one official told the paper. In a series of articles, the Charleston Gazette has highlighted the scramble to spend the stimulus money back in 2010. Bids for the work went out quickly. By the time someone in the state Office of Technology wrote in an e-mail that “this equipment may be grossly oversized for several of the facilities in which it is currently slated to be installed," it was too late. The $24 million contract for the routers went to Verizon Network Integration, which had the lowest bid.
benton.org/node/122973 | Ars Technica | Charleston Gazette – editorial
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WV BROADBAND PROJECT
[SOURCE: Charleston Daily Mail, AUTHOR: Jared Hunt]
While aspects of a statewide broadband infrastructure project are drawing criticism, Frontier Communications officials told state Board of Education members they are on schedule to complete their portion of the project. Frontier is building new fiber optic broadband infrastructure for hundreds of state schools as part of a $126 million statewide project. The funding was provided through a federal stimulus grant. It's being used to boost high-speed Internet connections to schools, libraries, courthouses and hundreds of other public buildings. Mark McKenzie, engineering manager with Frontier Communications, told state board members Wednesday the company's portion of the project was going well.
benton.org/node/122970 | Charleston Daily Mail
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CYBERSECURITY BILL HITS SNAG
[SOURCE: Politico, AUTHOR: Tony Romm, Jennifer Martinez]
There’s yet another hurdle for Sen. Joe Lieberman’s cybersecurity bill: Democrats who say it doesn’t go far enough to protect consumer privacy. With Senate Republicans standing firm against the measure, the friendly fire from Democrats means there’s only more work ahead as Sen Joe Lieberman (I-CT) and others scramble to cobble together 60 votes to move the bill. A handful of members, including Sens Al Franken (D-MN) and Richard Blumenthal (D-CT), are echoing the concerns of civil liberties groups, which are growing increasingly fearful that consumers’ data could end up being passed around by companies and the government as security experts share with each other information about emerging cyberthreats. To them and others, the Senate measure as written would specify too few limitations on how data could be used and cover entities with too broad a protection from liability.
benton.org/node/123020 | Politico
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TELECOM

USF REFORM
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
A respected financial analyst who has facilitated numerous carrier mergers and acquisitions expressed strong concerns about Universal Service reforms adopted by the Federal Communications Commission. Although the FCC has touted the idea that the reforms will spur broadband deployment, network operators may not step up to deploy broadband to some unserved areas because target support levels may be too low, said Mike Balhoff, chartered financial analyst previously at Legg Mason Wood Walker and now at Balhoff & Williams. And if incumbent carriers opt out, Balhoff said there is a “distinct possibility” that no one will participate in planned reverse auctions for unserved areas. Balhoff noted his respect for FCC personnel and the complexity of the problems they are addressing. However, he raised questions about several moves that have been made by the FCC on Universal Service. Of particular concern, he said, is the FCC’s plan to phase out inter-carrier compensation (ICC), or access charges.
benton.org/node/122975 | telecompetitor
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TELEVISION/RADIO

TELEVISION HOLDS SWAY
[SOURCE: New York Times, AUTHOR: Stuart Elliott]
For television as an advertising medium, these seem like troubled times: declining ratings for many shows, increasing use of DVRs, difficulties in reaching prized younger viewers, fragmentation of audiences, the growing appeal of digital media and even a service being introduced by Dish Network, Auto Hop, enabling customers to more easily skip commercials. Why, then, are television executives smiling as they prepare for their annual “upfront” week of presentations to advertisers, which begins in New York on Monday? Because Madison Avenue, even if it can’t always get what it wants from television anymore, still believes it gets most of what it needs. “Advertisers use television because they need to make everyone aware of the differences in brand attributes” between their products and those sold by competitors, said Brian Wieser, an analyst with the Pivotal Research Group who was once the top advertising forecaster for the Interpublic Group of Companies. “And as long as TV is viewed as the primary driver of brand awareness, TV will grow its revenue base.”
benton.org/node/123027 | New York Times
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THE UPFRONTS
[SOURCE: New York Times, AUTHOR: Amy Chozick]
This week, the biggest television networks will battle it out for their share of the more than $60 billion in advertising dollars spent by the world’s largest marketers on television commercials each year. The networks’ weapons? A 40-foot sushi bar, a 125-foot star-studded red carpet and 14 flavors of doughnuts (including candied ginger and hibiscus). What began in the 1960s as a glorified trade show for television executives to woo marketers and sell advertising time upfront to support the coming fall TV schedule has evolved into a full-fledged bacchanal that can cost networks upward of $1 million. Today the upfronts look more like Fashion Week than a business transaction.
benton.org/node/123034 | New York Times
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BROADCAST VS CABLE
[SOURCE: New York Times, AUTHOR: Bill Carter]
It was once the ultimate prize for a creator of drama series on television: a call from one of the broadcast networks during upfront week to say that his or her new project had been selected to fill an hour on the prime-time schedule. For some, at least, that thrill is gone. “Yes, we do have A-level producers who say, ‘I don’t want to be on the network; I only want to be on cable,’ “ said Zack Van Amburg, the president of programming and production for Sony Pictures Television, a studio that generates shows for both network and cable channels. In growing sections of the television drama business, a condition known as “cable envy” has been setting in — and spreading. Cable, the land of small budgets and even smaller audiences, has become the place creators of drama go if they want to take big creative risks — and win golden trophies. But increasingly, networks are trying to lure talent that otherwise might succumb to the allure of cable.
benton.org/node/123032 | New York Times
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THE DECLINE OF LIVE TV VIEWING
[SOURCE: New York Times, AUTHOR: Davis Carr]
[Commentary] When it comes to the traditional screen that families gather around, live television is competing against a growing array of self-selected content. Given the amount of high-quality shows idling in my DVR and on-demand queue, channel surfing for live television seems very last century. And our television is Web-enabled, so a vast treasure of other goodies awaits from Netflix, Hulu Plus and Apple TV. Outside of the professional football season or some breaking national news event, the television at our house has become uncoupled from the commercial-driven environment that drives the broadcast and cable business. We haven’t cut the cord so much as kinked it in a way that commercials rarely sneak through. I continue to be a fan of (some) network television products; I just don’t consume them as they’re broadcast.
benton.org/node/123031 | New York Times
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RUTHLESS PROVING GROUND
[SOURCE: New York Times, AUTHOR: Brian Stelter]
Among the red carpets, celebrity appearances and musical performances, the upfronts almost resemble the Emmy Awards, television’s annual self-congratulatory awards show. Except that the upfronts lack “In Memoriam,” the period of mourning for the industry’s losses the year before. This week at the network presentations for advertisers, there will be no mention of “The Playboy Club,” “The Finder” or “The River.” Or “A Gifted Man,” “How to Be a Gentleman” or “Man Up!” Or the other network television shows — over a dozen and counting — that were announced with great fanfare at the same presentations last year and have been canceled since then. The failure rate for network television rarely changes — only the names of the shows do. For most people in the television industry, it’s perfectly normal for hundreds of scripts to be pared down each season, “Survivor” style, to just one or two hit shows. These people rarely stop and wonder if there’s a better way of doing business. But to others, this creative slaughter is stupefying. “The most confounding thing about the TV business is the amount of waste,” said Noah Hawley, who created “The Unusuals,” which ABC canceled in 2009, and “My Generation,” which ABC canceled in 2010. There must be, he said, a better way to develop and nurture new shows.
benton.org/node/123030 | New York Times
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FOX LICENCES SAFE
[SOURCE: The Hill, AUTHOR: Andrew Feinberg]
The Federal Communications Commission (FCC) is unlikely to heed calls from activists to revoke the US broadcasting licenses of Rupert Murdoch’s News Corp., experts say. A review of FCC and court records show the FCC has only revoked a handful of licenses since broadcast law was established in 1934, and hasn’t taken a major action of that kind in more than 20 years. Peter Tannenwald, an attorney at Fletcher, Heald and Hildreth, said the FCC has moved to revoke licenses in the past, but never against a broadcaster with the size and clout of News Corp. "For anybody this big? I think not." Even if the FCC moved against News Corp., Tannenwald said it would likely take more than a decade to resolve the court battle that would ensue.
benton.org/node/122996 | Hill, The
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MEDIA AND ELECTIONS

ROMNEY BAD FOR GOOGLE
[SOURCE: National Journal, AUTHOR: Adam Mazmanian]
Who is Google rooting for in the presidential race? Telecom analyst Paul Gallant of Guggenheim Securities suggests in a note to investors that a win by Mitt Romney could mean a less a favorable outcome for Google in the ongoing Federal Trade Commission probe. While the FTC made news with the recent addition of Beth Wilkinson to their legal team, Gallant argues that, "Google's fate may be more affected by the November presidential election than by the recent litigation hire." Gallant cites the Republican ties of Google's foes in Washington, meaning Microsoft and other firms that have complained about Google's dominance in search. While it might be counterintuitive to expect a stronger antitrust posture from a Republican administration, in an interview Gallant said there's always a political component to these investigations.
benton.org/node/122986 | National Journal
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HOLLYWOOD’S CONGRESSMAN
[SOURCE: Politico, AUTHOR: Michelle Quinn, Jonathan Allen]
If Howard Berman is the Oscar, Brad Sherman’s the People’s Choice Award in the race to represent a new district in the shadow of Hollywood. That’s the prevailing view among Democratic strategists and congressional aides keeping close tabs on an increasingly bitter race between the rhyming congressmen, who were lumped together this year by California’s unforgivingly independent redistricting commission. Berman’s won the unofficial primary among Hollywood and D.C. elites, they say, but it’s Sherman who has the edge right now among voters who live among the backyard swimming pools and porn sets of the sprawling San Fernando Valley. “If you live in the Hollywood/D.C. bubble Berman is lapping Sherman,” said Mike Trujillo, a Valley native who ran Hillary Clinton’s California campaign in 2008 and was a political aide to Rob Reiner. “If you live in the Valley, Brad’s the choice for most Valley folks right now.”
benton.org/node/123019 | Politico
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HEALTH

HIT COMMITTEE VACANCY
[SOURCE: Government Accountability Office, AUTHOR: Gene Dodaro]
The American Recovery and Reinvestment Act of 2009 (ARRA) established the Health Information Technology Policy Committee (Health IT Policy Committee) and gave the Comptroller General responsibility for appointing 13 of its 20 members. ARRA requires that 3 members be advocates for patients or consumers. Due to a vacancy on the Committee, GAO is accepting nominations of individuals to fill one of these three positions. For this appointment I am announcing the following: Letters of nomination and resumes should be submitted between May 5 and 25, 2012 to ensure adequate opportunity for review and consideration of nominees.
benton.org/node/122967 | Government Accountability Office
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NATIONAL HEALTH INFO NETWORK
[SOURCE: ModernHealthcare.com, AUTHOR: Rich Daly]
Department of Health and Human Services officials offered for public comment alternative “rules of the road” to govern a coming national health information network. A finalized set of rules will be offered in a future rulemaking process. The network, authorized as part of the electronic health record incentive program included in the 2009 stimulus law, will govern the exchange of any type of health information by providers, patients and researchers. The various ways to create, amend or drop the rules of the coming network were laid out in the request for information. “From a healthcare provider's perspective, we anticipate that the governance mechanism could provide assurances to all electronic exchange parties that a specified set of requirements have been met,” according to HHS' request for public comment. “In turn, we believe these assurances could help spur greater trust and confidence in electronic exchange among providers and ease concerns associated with sharing patient information.” The national network will be overseen by the National Coordinator for Health Information Technology.
benton.org/node/122964 | ModernHealthcare.com | HHS
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GOVERNMENT & COMMUNICATIONS

GOOGLE-NSA
[SOURCE: Associated Press, AUTHOR: Frederic Frommer]
A federal appeals court has turned down a Freedom of Information Act request to disclose National Security Agency records about the 2010 cyberattack on Google users in China. The Electronic Privacy Information Center, which focuses on privacy and civil liberties, sought communications between Google and the NSA, which conducts worldwide electronic surveillance and protects the U.S. government from such spying. But the NSA refused to confirm or deny whether it had any relationship with Google. The NSA argued that doing so could make US government information systems vulnerable to attack. A federal district court judge sided with the NSA last year, and on May 11, a three-judge panel of the U.S. Court of Appeals for the District of Columbia upheld the ruling.
benton.org/node/122995 | Associated Press
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OWNERSHIP

FACEBOOK AS CULTURAL PHENOMENON
[SOURCE: San Jose Mercury News, AUTHOR: Peter Delevett]
When Facebook goes public -- as it's expected to do this week in what's almost certain to be the biggest stock debut for an Internet company -- it will be more than a milestone financial event. It will also be a reflection of how tightly a company launched eight years ago in a college dorm room has become woven into the fabric of society. In its ability to shape the way hundreds of millions of people around the world communicate, debate, make buying decisions, entertain and inform themselves, Facebook may well be the biggest technological advance since the advent of broadcast television. David Kirkpatrick, author of the best-seller "The Facebook Effect," spent years covering technology titans like IBM and Microsoft but said, "It wasn't until I saw Facebook that I saw a company that was going to change the way life is lived." He likens Facebook co-founder and Chief Executive Mark Zuckerberg's vision to transform society, and the single-minded pursuit of his vision, to that of historic figures like Mohandas Gandhi, Vladimir Lenin and Martin Luther King Jr. Facebook, close observers of the company argue, is changing how business, politics and society itself operate.
benton.org/node/123026 | San Jose Mercury News
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FACEBOOK PURCHASES
[SOURCE: New York Times, AUTHOR: Jenna Wortham]
Facebook’s billion-dollar purchase of Instagram made a lot of noise — so much noise that few people noticed when the company snapped up two more start-ups just a few days later. The shopping spree that snagged Tagtile and Glancee was just business as usual for Facebook. It buys small companies on a regular basis — almost two dozen over the last two years — to beef up its team of talented engineers, add to the site’s offerings and sharpen competition with rivals. Because Facebook tends to be tight-lipped about its plans, the company’s string of acquisitions reveals a lot about how Mark Zuckerberg, the chief executive, is charting a course for its future — and potentially sheds some light on what, and who, may be next on the company’s shopping list. The social networking juggernaut does not generally do a lot of long-term planning for its mergers and acquisitions. “They are a fairly nimble company,” said Paul Buchheit, an entrepreneur who created the first version of Gmail for Google and is now a partner at Y Combinator, a popular incubator of tech start-ups in Silicon Valley. “They don’t have a five-year plan for companies they want to buy. When they see a company that makes sense, they focus on getting things done quickly.”
benton.org/node/123025 | New York Times
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FEEDING FRENZY
[SOURCE: Wall Street Journal, AUTHOR: Shayndi Raice]
Silicon Valley start-ups are being energized by some new big spenders in town: Facebook, Groupon, and Zynga. This year, Facebook and newly public Groupon and Zynga have been snapping up companies at a record pace. In the first three months of the year, the three companies bought at least 21 firms, more than double their combined acquisitions in the same period a year ago, according to Dealogic and people familiar with the deals. While Facebook, Zynga and Groupon haven't been shy about buying companies in the past, they recently have ramped up their acquisitions pace and delivered some of their highest-ever prices for deals. Many of the deals, such as Facebook's purchase of app developer Glancee, are strategic moves into mobile technologies or new markets, instead of like past acquisitions to grab engineering or other talent. The activity is an outgrowth of the huge sums that the Web companies have raised, or expected to soon raise, through IPOs. Groupon and Zynga went public late last year, snagging $805 million and $1 billion, respectively. When Facebook goes public this week, it is expected to raise up to $13.6 billion.
benton.org/node/123023 | Wall Street Journal
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LIGHTSQUARED BANKRUPTCY
[SOURCE: Wall Street Journal, AUTHOR: Mike Spector, Greg Bensinger]
Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. May 14 to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. LightSquared, which violated terms of its debt long ago, received a waiver from lenders to keep it from defaulting. The lenders have extended the waiver twice, but aren't expected to do so again before it expires Monday evening, said people familiar with the matter. Mr. Falcone, whose Harbinger Capital Partners is LightSquared's main backer, couldn't agree with lenders on how to cede ownership stakes in the wireless venture to them over time, the people said. There were also a number of other terms separating the two sides, the people said.
benton.org/node/123022 | Wall Street Journal
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