July 10, 2012 (Verizon's cable deals make headway)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, JULY 10, 2012

Today’s events headlined by Federal Communications Commission Oversight Hearing (preview below) http://benton.org/calendar/2012-07-10/

AGENDA
   Background on Oversight of the Federal Communications Commission Hearing (updated)
   Google, FTC Near Settlement on Privacy

SPECTRUM/WIRELESS
   Verizon's cable deals make headway but regulatory doubts linger
   FCC Won't Delay Restarting Clock on Verizon–SpectrumCo
   Consumer Federation of America Brands SpectrumCo Deal End of 96 Act's Competitive Promise
   What’s behind the price signaling between Verizon and AT&T? - op-ed
   CTIA Calls FM Chip Emergency Communications Claims 'Silly' [links to web]
   How software-defined radio could revolutionize wireless [links to web]
   What Amazon Brings to the Smartphone Market
   AT&T investors angry over $4 billion breakup fee - analysis [links to web]
   Father Of The Cellphone 'Unleashed' World's Callers From Copper Wires [links to web]
   Amazon Said To Plan Smartphone To Vie With Apple IPhone [links to web]

INTERNET/BROADBAND
   Thirteenth Quarterly Status Report to Congress Regarding BTOP
   No meter? No problem. AT&T is still happy to charge you
   The Future of Corporate Responsibility - research
   Rural Telcos Pursue Low-Income Broadband Pilot Test
   Frontier Communications to Extend Broadband Deployment to Rural America with FCC's Connect America Fund - press release [links to web]
   Driving broadband adoption in the Latino community - press release [links to web]

UNIVERSAL SERVICE
   House Commerce Committee Leaders Seek USF Reform Update
   Rural Telcos Pursue Low-Income Broadband Pilot Test
   Frontier Communications to Extend Broadband Deployment to Rural America with FCC's Connect America Fund - press release [links to web]

CYBERSECURITY
   Cyber Command chief urges action on information-sharing legislation
   Born on the 4th of July: Will There Be Collateral Damage in Cyberwar to US?

ELECTIONS AND MEDIA
   Swing State TV Stations Spiking Ad Rates As Campaign Cash Pours In
   FCC to Demo Political File Database July 17 [links to web]
   Wireless carriers resist allowing campaign donations by text
   Facebook, CNN Partner to Make 'America's Choice 2012' Political Coverage an Interactive, Social Experience [links to web]
   Poll: iPhone users back Obama [links to web]
   Cable nabs a bigger slice of political pie
   Hoodwinked - op-ed
   Political Spending by Unions Far Exceeds Direct Donations [links to web]

ADVERTISING
   Facebook to Target Ads Based on App Usage
   Digital advertising agencies are built for the Internet age [links to web]

POLICYMAKERS
    Gene Kimmelman, Obama’s ‘secret weapon’ on antitrust, leaves Justice
   Tech group executives making big money

OWNERSHIP
   Judge who shelved Apple trial says patent system out of sync
   Tech rivals push copycats battle to the Hill [links to web]
   Tech and Media Elite Are Likely to Debate Piracy [links to web]

STORIES FROM ABROAD
These headlines presented in partnership with:

   Samsung Wins U.K. Apple Ruling Over ‘Not As Cool’ Galaxy Tab
   Eric Schmidt: The Great Firewall of China will fall
   Why censoring social media might mean more-violent protests [links to web]
   US Bid For Megaupload Founder Dotcom’s Extradition Is Delayed [links to web]
   On North Korean TV, a Dash of (Unapproved) Disney Magic [links to web]
   Britain Leads Europe in Internet on Trains [links to web]
   UN defies own sanctions against Iran by sending computer gear [links to web]
   WikiLeaks to Publish 2.4 Million Syrian Emails [links to web]
   EU drafts bill to speed up music copyright pay [links to web]
   A visual guide to undersea cables and their $5.5 Billion price tag [links to web]
   Facebook invests in Asia Pacific Gateway submarine cable [links to web]
   Visa Europe becomes Telefonica's favorite m-payment partner [links to web]
   BlackBerry’s Latest Delay Could Lead to Lawsuits [links to web]

MORE ONLINE
   Facebook, Twitter and the economics of attention [links to web]
   Majority Of U.S. Homes Get Multichannel TV [links to web]
   FCC Fines Cable Operator $30,000 for Illegal Retransmission [links to web]
   A Reality Series Intrudes on Silicon Valley, and Finds It Cringing [links to web]
   Apple's withdrawal from 'green' certification program surprises purchasers [links to web]
   NBC’s Live Web Olympics Coverage Seen Drawing Pay Viewers [links to web]

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AGENDA

FCC OVERSIGHT HEARING
[SOURCE: House of Representatives Commerce Committee]
With the May 7, 2012, confirmation of Federal Communications Commission members Rosenworcel and Pai, FCC is back to a full complement of five commissioners. This will be the first hearing with the commissioners since their appointments. The committee’s majority staff offers a summary of some of the issues that may arise at the hearing including: 1) Commercial Spectrum Auctions, 2) Interoperable Public Safety Broadband Network, 3) Universal Service, 4) Special Access, 5) Video and Broadcast Ownership Regulation, 6) Cable Spectrum Transfer (the Verizon-SpectrumCo deal), 7) June 29 Storm Outages.
In a memo to Democratic members of the House Commerce Committee, staffers listed the "key issues" before the Federal Communications Commission. The first was the spectrum incentive auction legislation that will fund the creation of an interoperable public safety network with proceeds from auctioned spectrum reclaimed from broadcasters. The second item is merger reviews, with the Verizon-cable transaction leading the list -- the FCC is vetting Verizon's bid to pay $3.9 billion to cable operators Comcast, Time Warner Cable, Cox and Bright House for advanced wireless spectrum. Third, the FCC's proposal to allow use of satellite spectrum authorizations for terrestrial wireless broadband, which is what Dish wants to do with its satellite spectrum and what LightSquared got a waiver to do before GPS interference issues prompted the FCC to put the kibosh on that effort. Fourth, recent FCC actions related to the Comcast-NBCU deal conditions, specifically its finding that Comcast has not complied with a non-neighborhooding condition when it came to Bloomberg TV, and a consent decree with Comcast over marketing of low-cost, stand-alone broadband.
According to his prepared testimony for the House Commerce Committee’s July 10 Federal Communications Commission oversight hearing, new FCC Commission Ajit Pai suggests he does know jack about the FCC, and suggests that means being more nimble and more quick. Commissioner Pai says the FCC must get its work done faster, and suggests one way might be to stop applying extraneous "voluntary" conditions to mergers and start applying cost-benefit analysis before deciding to impose new regulations. Those suggestions come after more than 80 meetings with stakeholders, members of Congress and others. Commissioner Pai said the common refrain he has heard was how "unreasonably delayed" FCC actions have been, from months to years to most of a decade.
Commissioner Pai is likely to clash with fellow Commissioner Rosenworcel over his belief that the FCC's approval of mergers and transactions should not be predicated on imposed voluntary commitments that are not tied to a transaction-specific harm. Commissioner Rosenworcel, echoing former commissioner Copps, will likely be a strong advocate for a broader interpretation of the public interest. "Consumer protection is always in the public interest," she will tell the subcommittee. At the top of Rosenworcel's list of issues facing the FCC is public safety. "Public safety is paramount. Congress directed the FCC to promote the safety of life and property in the very first sentence of the Communications Act."
FCC Chairman Julius Genachowski says the FCC is still on track to start putting out its incentive auctions proposals by the fall. The chairman also plans to tell Congress that the FCC has reduced by 20% the number of license and application renewals that had been pending for more than six months, as well as cutting in half the amount of time it took to review what he called routine wireless transactions.
FCC Commissioner Robert McDowell says the FCC needs to start processing indecency complaints now that the Supreme Court is through with court challenges to the FCC's authority. "The Commission should act with all deliberate speed to clarify its indecency policy in the wake of the recent Supreme Court decision," he says. That will allow it to work through the roughly 1.5 million complaints (involving 9,700 broadcasts and about 700 pending station license renewals, says McDowell), some of which date back almost a decade. He says the FCC needs to decide whether it needs to modify its enforcement policy, and how it will ensure broadcasters have sufficient notice of whatever it does.
benton.org/node/128725 | House of Representatives Commerce Committee | Broadcasting&Cable | Broadcasting&Cable – Pai | AdWeek | National Journal | B&C – Genachowski | B&C –McDowell
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GOOGLE PRIVACY SETTLEMENT?
[SOURCE: Wall Street Journal, AUTHOR: Julia Angwin]
Google is close to a deal to pay $22.5 million to settle charges related to its surreptitious bypassing of the privacy settings of millions of Apple users, according to officials briefed on the settlement terms. The fine is expected to be the largest penalty ever levied on a single company by the Federal Trade Commission. It offers the latest sign of the FTC's stepped-up approach to policing online privacy violations, coming just six months after The Wall Street Journal reported on Google's practices. While the fine likely will represent only a tiny portion of Google's revenues—last year, the Internet giant raked in that much cash roughly every five hours or so—it counts among a series of negative reports about Google's privacy practices that could undermine users' trust in its services.
benton.org/node/128770 | Wall Street Journal
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SPECTRUM/WIRELESS

VERIZON DECISION SOON?
[SOURCE: Reuters, AUTHOR: Diane Bartz]
Sources say the Federal Communications Commission is prepared to approve Verizon’s purchase of spectrum from cable companies. But Verizon is in much tougher talks with the Justice Department in hopes of winning agreement for two other much-criticized portions of the deal. The Justice Department is skeptical about the marketing deals since they would mean collaboration between Verizon, the largest wireless company, and Comcast, the biggest cable company, according to one of the sources. The fear is that there will be less head-to-head competition which could mean higher Internet and wireless plan prices. The hope had been that Verizon would use its FiOS service to more aggressively push into Internet and cable, and that Comcast and other companies would compete more heavily in wireless products. The other concerning component, the source said, is the creation of a "joint operating entity" between Verizon and the cable companies. It is designed to develop new technologies, such as one that would allow consumers to move seamlessly between wired and wireless hookups, but critics say it could create cutting-edge technologies only available to the consortium. "The Justice Department has big concerns about what mischief could be done in undefined agreements that would lock out competitors," said the source. Talks are underway between the department and the parties, with no decision expected until August at the earliest. The Justice Department is weighing three options - it could sue to stop the side arrangements to the spectrum buys, it could seek to change them to prevent potential collusion, or it could monitor how the cross-marketing agreements that have already been put in place play out. Neither agency will sign off on the transactions until both are satisfied that any problems have been resolved.
benton.org/node/128748 | Reuters
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FCC WILL RESTART CLOCK
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission has denied a request by Public Knowledge and the Rural Telecommunications Group that the FCC not restart its shot clock on the Verizon-SpectrumCo deal on July 10 as planned. The groups had petitioned the commission to move the deadline for comments on the impact of the Verizon/T-Mobile spectrum swap on the SpectrumCo deal from July 10 to July 24, saying it needed more time and citing the July 4 holiday as one reason. The FCC had stopped its informal 180-day shot clock on vetting the SpectrumCo deal until July 10 so that commenters could weigh in on Verizon/T-Mobile. "We are not persuaded, under the circumstances outlined in the Motion, that Public Knowledge and RTG have shown good cause that granting the Motion for an extension of time would serve the public interest," the FCC's Wireless Telecommunications Bureau said in denying the request. "The Commission has an obligation to review the transactions proposed in the Verizon Wireless/SpectrumCo/Cox Applications as expeditiously as possible, consistent with the public interest," the commission said.
benton.org/node/128711 | Broadcasting&Cable
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CFA ON VERIZON-SPECTRUMCO
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
In advance of the July 10 comment deadline on Verizon's purchase of spectrum from cable operators, the Consumer Federation of America has told the Federal Communications Commission that allowing the deal would mark the end of "the competitive promise" of the 1996 Telecommunications Act. "The last two competitors standing, cable companies and telecommunications service providers, with any hope of building a serious competitive challenge by offering a bundle of services anchored in a product in which it has a clear advantage, have decided to collaborate, rather than compete," the group argues. It points to the associated cross-marketing agreements between Verizon and the cable companies, calling them "dressed-up" noncompetes that will diminish competition in the markets where the companies cross-promote their respective services. "Creating a joint venture wireless-cable bundle excuses cable from entering wireless and creates an advantage for both cable and Verizon that is difficult if not impossible to match for firms that are not party to the joint venture," CFA says.
benton.org/node/128713 | Broadcasting&Cable | GigaOm
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PRICE SIGNALING
[SOURCE: GigaOm, AUTHOR: Rags Srinivasan]
[Commentary] The two largest mobile service providers, AT&T Wireless and Verizon Wireless, are engaging in some serious price signaling. And you don’t have to take my word for it, because the two leaders are not only signaling, they are explicitly saying that they’re signaling. And guess what, this is all perfectly legal. As a marketing guy, I am in awe of this stroke of genius. Price signaling has always existed between the number one and number two players in any market. Agreeing to not engage in a price war is truly a win-win for the market leaders. Since outright price fixing is illegal, market leaders resorted to signaling to tell the other company their intentions or send a threat about their cost advantages. But traditionally, it was more like flirting — ambiguous enough that the underlying intentions could be denied. Why are these two not shy about admitting to flirting now? The simple answer is the iPhone. Why is this signaling legal? There is absolutely nothing wrong in these pricing plans or in their signaling. A marketer is fully within their rights to not offer a certain product version and let other players know about it. I also do not believe lawmakers and regulators should try to dictate otherwise. One, it does not eliminate competition. There are other service providers who can choose to provide cheaper voice plans. An extreme argument is, smartphones are not a necessity, customers don’t need to buy one at all. Two, while it may look like this eliminates choices for customers and hence invite regulatory scrutiny, an arbitrage opportunity does exist. Consumers can purchase a regular phone for $40 a month with limited minutes and use a Nexus 7 tablet with $40 for data connection. The trade-off is having to carry two devices for a savings of $480 over two years. But how many will actually take this option? Did you check the line at last iPhone release? As a customer, you may not like it, but viewed as a product strategy move, this is business at its best. [Srinivasan is a management professional who specializes in product strategy and strategic marketing]
benton.org/node/128704 | GigaOm
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AMAZON PHONE II
[SOURCE: Wall Street Journal, AUTHOR: Ina Fried]
While clearly a novice at making phones, Amazon brings a lot of know-how and relevant skills, which have already benefitted the company in the tablet space — Amazon has its own app store, Kindle book operation and digital music and movie services. Those content businesses are important for two key reasons. First of all, consumers like being able to easily get their content onto their mobile devices, and to take advantage of content they already have access to. Secondly, Amazon has the ability to make money on those services after the phones are sold, giving the company a potential recurring revenue stream that few other hardware makers can match. While Apple has clearly been successful in this area, most other phone makers either don’t try or haven’t made inroads in selling content to consumers. That means Kindle could potentially have a profitable business even while undercutting rivals on the hardware side. Indeed, a survey earlier this year found that consumers were more interested in a phone from Amazon than they were in one from Facebook. (July 6)
benton.org/node/128719 | Wall Street Journal
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INTERNET/BROADBAND

BTOP STATUS REPORT
[SOURCE: National Telecommunications and Information Administration]
The National Telecommunications and Information Administration has sent Congress the latest Quarterly Report on the status of the Broadband Technology Opportunities Program
(BTOP or Program) focusing on the Program’s activities from January 1 to March 31, 2012. From January to March 2012, BTOP grant recipients continued to demonstrate strong performance across the Program’s FY12 goals. These positive results have helped the Program deliver significant progress in areas such as new fiber-optic infrastructure construction, the opening of new PCCs, and thousands of new broadband subscribers now experiencing the benefits of high-speed Internet service. Recipients’ quarterly progress reports, which were made public at the beginning of June 2012, provide a more granular depiction of these results. The Program made considerable progress in network miles during the last quarter. NTIA has exceeded its FY12 goal to deploy 50,000 new or upgraded network miles across the country. Recipients deployed more than 12,000 network miles during the past quarter, bringing the total number of miles to more than 57,000. Through March 31, 2012, grantees were deploying facilities in 48 states and territories. Last quarter, BTOP recipients connected and/or improved service to nearly 2,000 anchor institutions within their project areas, bringing the total number of institutions to 8,300 across 40 states. The total number of anchors connected with BTOP funds increased by more than 30 percent from the previous quarter. With the activity this quarter, NTIA reached 83 percent of its FY12 goal to connect 10,000 institutions. As BTOP recipients deploy additional new network miles, they will continue to provide more institutions with faster and more reliable Internet access. Through March 2012, 62 BTOP recipients installed more than 33,000 new workstations in Public Computer Centers across 39 states. PCC recipients continued to make considerable progress last quarter, reaching nearly 97 percent of the total program goal to install 35,000 new or upgraded public workstations. Those recipients that have installed workstations also continue to develop and implement training programs and educational courses, including much-needed job training. During the quarter, public computer centers provided 1.4 million hours of training to 336,000 users. Through March 2012, 36 BTOP recipients reported
that their training and adoption projects led over 326,000 households and 7,400 businesses to subscribe to broadband services. New subscribers for the past quarter totaled more than 63,000, meaning that more people are now using the Internet to search and apply for jobs, advance their educational goals, and find health-related information. Over 80 percent of SBA grant recipients reported new broadband subscribers. NTIA expects the number of new subscribers to continue to increase as more households complete training programs, receive subsidized computer equipment or broadband service, and take advantage of workstations and discounted subscriptions provided by BTOP funds. NTIA reached nearly 95 percent of its FY12 goal, attaining more than 330,000 of the 350,000 planned new broadband subscribers.
benton.org/node/128740 | National Telecommunications and Information Administration
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AT&T METERING
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
AT&T implemented a broadband cap a little over a year ago, yet AT&T isn’t letting all of its customers track their broadband usage — which would be pretty useful information if you’re trying to stay under the cap. For an undetermined number of subscribers AT&T hasn’t yet provided access to its online data meter, but that hasn’t stopped Ma Bell from implying that customers need to beware of what they download. It sounds like AT&T will send customers letters or emails if they go above the 250 GB cap for high speed users and 150 for DSL users, but they won’t be charged those first two times. However if that customer continues to exceed the cap even without a meter AT&T is going to charge them.
benton.org/node/128702 | GigaOm
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CORPORATE RESPONSIBILITY
[SOURCE: Pew Center's Internet & American Life Project, AUTHOR: Janna Anderson, Lee Rainie]
The moral obligations and competing values of corporations have been debated since the dawn of the Industrial Revolution: How do corporate leaders drive for profit maximization while ethically meeting the needs of communities and citizens? In the age of globalization and worldwide communications revolutions, these issues have taken a new turn. Activists in democratic countries have tried to get governments and companies to halt or limit the sale to authoritarian regimes of technologies that can be used to track, target, jail, or kill dissidents. Advocacy efforts are also being targeted at trying to convince technology companies not to allow their products to be used to spy upon, censor, block access to content, or thwart the public’s use of Internet-based tools that allow people living in authoritarian states to bring their issues to fellow citizens and allies abroad. Still, other advocates are trying to convince technology companies to crack down on labor abuses being committed by their foreign suppliers.
benton.org/node/128695 | Pew Center's Internet & American Life Project
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UNIVERSAL SERVICE

HOUSE WANTS USF REFORM UPDATE
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The bipartisan leadership of the House Commerce Committee has asked the Federal Communications Commission for an update on its reforms of the Universal Service Fund. In a letter to FCC Chairman Julius Genachowski, the chairs and ranking members of the committee and Communications subcommittee have asked for a lot of data on the FCC's reform of the high-cost and low-income USF programs. "With the recent steps taken by the FCC to modernize and reduce waste within the USF high-cost and low-income programs, it's incumbent upon this Committee to have the most up-to-date performance information," they wrote.
benton.org/node/128723 | Broadcasting&Cable | read the letter
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LOW-INCOME BROADBAND TEST
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
Five rural telcos have worked together to propose a pilot program to improve broadband adoption among low-income Americans in rural areas. With the assistance of the National Telecommunications Cooperative Association (NTCA), the carriers have filed an application with the Federal Communications Commission for program funding. Rural telcos participating in the application include three Illinois-based companies — Adams Telephone Co-operative, Madison Telephone Co. and Mid Century Telephone Cooperative – as well as Iowa-based Alpine Communications and New Mexico-based Leaco Rural Telephone. With plans underway for transitioning today’s voice-focused high-cost Universal Service fund to focus on broadband, the FCC also is contemplating a similar transition for the low-income Lifeline portion of the Universal Service program. Back in January, the FCC announced plans to free up funding for a pilot broadband low-income program through modifications to the Lifeline program and tighter control of disbursements. In April the commission announced that it would make $25 million available for the pilot program. The commission said that any pilot program proposals should not simply focus on affordability but should also include a plan for increasing digital literacy. The proposal from the rural telcos appears to address both of these goals. According to a release issued Tuesday by the NTCA, the application includes a plan to work with the non-profit organization Connected Nation to provide low-cost computers to consumers who complete free online digital literacy training.
benton.org/node/128693 | telecompetitor
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CYBERSECURITY

PUSH FOR CYBERSECURITY LEGISLATION
[SOURCE: The Hill, AUTHOR: Jennifer Martinez]
The head of U.S. Cyber Command argued that cybersecurity legislation focused on improving information-sharing about cyber threats between the private and public sectors would not encourage the government to read through Americans’ personal emails. Gen. Keith Alexander tackled claims made by privacy and civil liberties groups in recent months that information-sharing measures pending in Congress would widen the flow of people’s personal emails to the government. The four-star general argued that this legislation is needed to ensure critical infrastructure operators have the ability to share information about incoming cyber threats and attacks with the government “at network speed” and get the help needed to thwart potential damage. “When we talk about information-sharing, we’re not talking about taking our personal emails and getting those to the government,” said Alexander, who also serves as the director of the National Security Agency (NSA).
benton.org/node/128745 | Hill, The
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CYBERWAR COLLATERAL DAMAGE
[SOURCE: Wall Street Journal, AUTHOR: Arik Hesseldahl]
If you needed any further evidence about the possibility of an unexpected blowback from the creation of the Stuxnet worm and other cyber-weapons like it, the Department of Homeland Security has something for your night table, bound to keep you awake. Earlier this week, it released a 17-page report, embedded below, detailing the activities of the Industrial Control Systems Cyber Emergency Response Team, or ICS-CERT for short. The report details the number of incidents at numerous critical infrastructure sites: Energy plants, water facilities, factories, that sort of thing. The first bit that everyone pays attention to is how the number of incidents reported skyrocketed from nine in 2009 to 198 in 2011. A lot of that increase can probably be attributed to the fact that the ICS-CERT was a relatively new creation. But the part that caught my eye was what the government wordsmiths at DHS creatively called “sector distribution.” In 2009, there were all of four sectors targeted for some kind of malicious attack: Dams, energy, water and two attacks that crossed sectors. Last year, there were 10 sectors targeted, and 49 cross-sector incidents. The report covers a case where a “critical manufacturing facility” — it doesn’t go into any more detail than that — discovered that its engineering workstations were all infected with Stuxnet. ICS-CERT arrived on the scene, confirmed that the malware infecting the machines was indeed Stuxnet and cleaned up the mess. Consider for a moment that Stuxnet was never intended to be seen in the wild in the first place, but had, in the words of one intelligence official, “escaped,” and you get the idea of the kind of unintended consequences that the cyberwar age brings with it. That is to say: Silent, invisible weapons, adapted and turned back on their creators. (July 4)
benton.org/node/128718 | Wall Street Journal
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ELECTIONS AND MEDIA

SWING STATE ADS
[SOURCE: National Public Radio, AUTHOR: Brian Naylor]
Someone once said that owning a TV station is a license to print money. Now, that was before the advent of cable TV and computer screens and streaming video. But these are clearly good times for some stations, especially the ones in presidential battleground states. While the November election is still four months away, President Obama, Republican Mitt Romney and outside groups are advertising in record amounts. "If you are a television station in a media market in one of those handful of [swing] states, there's an incredible amount of demand for your inventory from political buyers," says Ken Goldstein of Kantar Media CMAG, which tracks political ad spending.
benton.org/node/128743 | National Public Radio
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CARRIERS RESIST TEXT DONATIONS
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The major wireless companies are expressing concern about plans to allow political campaigns to collect donations through text messages. In a letter to the Federal Election Commission (FEC), wireless industry trade group CTIA worried that the decision to allow text donations will impose new legal responsibilities on carriers. The FEC approved a plan, supported by both President Obama's and Mitt Romney's campaigns, last month to legalize text donations. The donations will be limited to a maximum of $50 per user, per month and would not be open to corporations, foreign nationals or people younger than 18 years old. But the wireless carriers asked the FEC to clarify that it is the responsibility of the campaigns — and not the carriers — to ensure that the donations comply with all legal requirements. The carriers, which include Verizon, AT&T, Sprint and T-Mobile, argued that requiring them to verify the eligibility of a donor is "simply neither practicable nor workable." The companies also asked the FEC to confirm that normal texting charges would still apply to political donations and that campaigns would not be exempt from anti-spamming rules.
benton.org/node/128715 | Hill, The | Reuters | American Public Media
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CABLE AND POLITICAL ADS
[SOURCE: Media Life, AUTHOR: Bill Cromwell]
Broadcast television will still get the vast majority of political spending this year. But cable is poised to see the biggest gains, behind only the internet. After broadcast, cable will get the second-most political ad dollars this year, $938.8 million, according to a forecast by Borrell Associates, the Williamsburg (VA) local advertising tracking firm. That's double the $468 million spent in 2008. This year cable will account for 9.5 percent of all political ad spending, just ahead of No. 3 radio at 8.3 percent. Cable has lagged well behind broadcast in political spending largely because spot TV allows for more narrow targeting. Political spending is nearly always based on geography, and cable networks have fewer minutes per hour of local advertising than broadcast networks. That has often made them an afterthought for both local and national campaigns. But cable is getting more creative in its approach to woo political advertisers.
benton.org/node/128761 | Media life
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HOODWINKED
[SOURCE: Benton Foundation, AUTHOR: Michael Copps]
[Commentary] The upcoming national elections are presented as budget deficit-centric contests in which candidates vie for “most hawkish” in their prescriptions for government-by-austerity. Good luck getting into the game if you’re not on the “deficits first” roster. Austerity seems to be every candidate’s mantra, even though Joe Stiglitz, Paul Krugman and others have persuasively demonstrated what a poor prescription austerity is for the economic recovery America requires. Pity the candidate foolish enough to suggest that massive investment in our collapsing infrastructures (and in the infrastructures of the future, like broadband) may be the last, best hope for our dangerously-imperiled economy. Other than deficits, campaign coverage is all about horse-races, polls and “gotcha” politics. It’s happening in telecommunications and media, too. Real issues are mostly out-of-bounds and what is covered is disproportionately influenced by the power of big, increasingly corporate, and usually anonymous money.
http://benton.org/node/128654
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ADVERTISING

FACEBOOK AD TARGETING
[SOURCE: Wall Street Journal, AUTHOR: Shayndi Raice]
Facebook is launching a new type of mobile advertising that targets consumers based on the apps they use, pushing the limits of how companies track what people do on their phones. The social network is tracking the apps that people use through its popular Facebook Connect feature, which lets users log into millions of websites and apps as varied as Amazon.com, LinkedIn and Yelp with their Facebook identity. The company then targets ads based on that data, said people familiar with the company's plans. Facebook may also track what people do on the apps, though it hasn't made a final decision, said one of the people. The new ads could stoke privacy concerns because they let Facebook go a step further than mobile-ad networks, which track what ads people have clicked on through a phone's Web browser. Those networks aren't aware of all the apps that a user has on their phone. (July 6)
benton.org/node/128722 | Wall Street Journal
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POLICYMAKERS

GENE KIMMELMAN
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Gene Kimmelman, known as the Justice Department’s “secret weapon” on antitrust, is leaving the agency to open the Washington (DC) office of the human rights organization Global Partners and Associates, current and former federal officials say. Since his appointment in August 2009, Kimmelman has kept a relatively low public profile but has been one of the department’s most influential antitrust policy makers. Some liberals say Kimmelman helped revitalize a division that had grown soft under President George W. Bush. But industry officials and some conservatives say the department’s recent antitrust actions exemplify the Obama administration’s lack of business understanding. Working from a heavy wooden desk once used by J. Edgar Hoover, Kimmelman, 57, was a driving force behind Justice’s rejection of AT&T’s $39 billion bid for T-Mobile in November, a defining moment for the administration’s efforts to police the rapidly shifting high-tech and communications sectors. As a chief counsel in Justice’s antitrust division, Kimmelman also helped lead its approval of Comcast’s joint venture with NBC Universal — a controversial mega-merger that was granted but with a litany of conditions to protect competition from online firms as well as consumer cable and Internet costs. Kimmelman declined to comment for this story. The Justice Department confirmed his departure, but declined to comment further.
benton.org/node/128769 | Washington Post
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TECH GROUP EXECS
[SOURCE: Politico, AUTHOR: David Saleh Rauf]
Washington’s technology trade groups and think tanks don’t always see eye to eye, but their head honchos do have one thing in common: They all make big bucks. Nearly half of the top officials at 14 of D.C.’s most prominent tech trade associations brought home more than $1 million in total compensation during 2010 and part of 2011, according to a POLITICO review of the groups’ most recent IRS filings. Three other tech trade association CEOs reported earning more than $700,000 during that period. Topping the list: former National Cable & Telecommunications Association President and CEO Kyle McSlarrow, who earned $2.8 million in 2010 to serve as the cable industry’s top Washington lobbyist. McSlarrow, a former Department of Energy deputy secretary, stepped down from leading the NCTA in March 2011. Former Federal Communications Commission Chairman Michael Powell took over the job weeks later (Powell’s compensation hasn’t yet been disclosed in tax filings, and the NCTA declined to comment on his pay). McSlarrow and Powell are examples of another trend among tech trade CEOs: They’re often former government officials. Aside from Powell, four other current tech trade CEOs once served as lawmakers or worked in the federal government before leading lobbying efforts at their respective groups.
benton.org/node/128764 | Politico
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OWNERSHIP

JUDGE POSNER
[SOURCE: Reuters, AUTHOR: Dan Levine]
Richard Posner, the US judge who tossed out one of the biggest court cases in Apple’s smartphone technology battle is questioning whether patents should cover software or most other industries at all. He said that the technology industry's high profits and volatility made patent litigation attractive for companies looking to wound competitors. "It's a constant struggle for survival," he said in his courthouse chambers, which have a sparkling view of Monroe Harbor on Lake Michigan. "As in any jungle, the animals will use all the means at their disposal, all their teeth and claws that are permitted by the ecosystem."
benton.org/node/128682 | Reuters
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SAMSUNG WINS RULING
[SOURCE: Bloomberg, AUTHOR: Kit Chellel]
Samsung Electronics won a legal ruling after a U.K. judge said its Galaxy tablets aren’t “cool” enough to be confused with Apple’s iPad. The design for three Galaxy tablets doesn’t infringe Apple’s registered design, Judge Colin Birss said in London in a court fight between the world’s two biggest makers of smartphones. Consumers aren’t likely to get the tablet computers mixed up, he said. The Galaxy tablets “do not have the same understated and extreme simplicity which is possessed by the Apple design,” Birss said. “They are not as cool.”
benton.org/node/128680 | Bloomberg | WashPost
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THE GREAT FIREWALL
[SOURCE: Foreign Policy, AUTHOR: Josh Rogin]
Technology and information penetration in China will eventually force the Great Firewall of China to crumble and even lead to the political opening of the Chinese system, according to Google Chairman Eric Schmidt. Schmidt, who stepped down as Google's CEO last year, remains the head of Google's board and its chief spokesman. He roams the planet speaking to audiences and exploring countries where Google could expand its operations. He has been called Google's "Ambassador to the World," a moniker he doesn't promote but doesn't dispute. He sat down for a long interview with The Cable on the sidelines of the 2012 Aspen Ideas Festival last week. "I believe that ultimately censorship fails," said Schmidt, when asked about whether the Chinese government's censorship of the Internet can be sustained. "China's the only government that's engaged in active, dynamic censorship. They're not shy about it." When the Chinese Internet censorship regime fails, the penetration of information throughout China will also cause political and social liberalization that will fundamentally change the nature of the Chinese government's relationship to its citizenry, Schmidt believes. "I personally believe that you cannot build a modern knowledge society with that kind of behavior, that is my opinion," he said. "I think most people at Google would agree with that. The natural next question is when [will China change], and no one knows the answer to that question. [But] in a long enough time period, do I think that this kind of regime approach will end? I think absolutely." The push for information freedom in China goes hand in hand with the push for economic modernization, according to Schmidt, and government-sponsored censorship hampers both.
benton.org/node/128756 | Foreign Policy
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