MediaPost

Software corporation Oracle is asking the Federal Communications Commission to reconsider the sweeping broadband privacy rules passed earlier in 2016. Oracle, which spent years unsuccessfully attempting to prove that Google's Android code infringes copyright, says the FCC's recent order on privacy will give Google an unfair advantage against Internet service providers. "The Commission cannot allow the order to stand, when it hands a clear victory to Google by hamstringing ISPs while allowing Google to continue to engage in invasive data collection and aggregation techniques, bolstered by its tight control of the Android operating system," Oracle said in a petition asking the FCC to reconsider the ruling.

Google Contributor, the subscription service that allowed users to see fewer advertisements on publisher sites for a fee, will close in January and reopen in early 2017 with a new version. The service allowed site visitors to pay fractions of pennies to see fewer Google-served display advertisements when visiting publisher Web sites, but insiders said getting users to pay for a subscription was slow going.

Subscribers paid a monthly subscription fee allowing those searching the Web and visiting sites as normal from any browser and device. Each time Contributor removed an ad from a page viewed by a subscriber, Google gave a percentage to that site.

[Commentary] The prospect of AT&T acquiring Time-Warner has triggered howls from both presidential campaigns, consumer-protection groups and free-press advocates, all of whom raised fears of media concentration, diminished competition and the threat to democracy posed by consolidation in the marketplace of ideas. Well, right burning church. Wrong burning pew. This is the case of one giant company with no other prospects for growth acquiring another giant company with no prospects for growth. It's as if the Titanic survivors took refuge on the Lusitania. The dangers to the rest of us are real, but they lie elsewhere.

If you are concerned about democracy and consumer choice, direct your attention to “social distribution” -- a shift in publishing, and a threat to publishing independence, that’s advancing at a breathtaking pace and scale. When you click on a Facebook Instant Article or an item from Google Amp, somewhere an important story is dying -- because social distribution, like high school and presidential campaigns, overwhelmingly benefits the popular. Whether a given story is served to a given reader is determined not by editors or curators but by algorithms, which do not measure substance, significance or potential impact on society. They measure only what users have looked at before, what they have commented on and what they have shared. Needless to say, such algorithms do not favor statehouse coverage and investigative reporting. At this particular moment in history, how prescient of Facebook to offer us -- in addition to its iconic “like” button -- an anger button, a tears button, a surprise button and a laughter button. Just in time, I say. Now all we need is a panic button.

The Federal Trade Commission is drawing support in its battle with AT&T from other policymakers, including Sen Richard Blumenthal (D-CT) and the Federal Communications Commission, as well as privacy experts and advocacy groups. Sen Blumenthal, the FCC and others are asking the 9th Circuit Court of Appeals to reconsider a recent decision dismissing an enforcement action against AT&T. The FTC alleged in an October 2014 complaint that AT&T duped more than 3.5 million people by selling them unlimited data plans, but slowing their connections after they exceeded monthly allotments ranging from 3 GB to 5 GB. AT&T countered that the FTC lacks authority to bring an enforcement action against common carriers. A three-judge panel of the 9th Circuit recently sided with AT&T, ruling that the FTC can't sue common carriers -- even when the lawsuit centers on a non-common carrier service. (Mobile broadband wasn't considered a common carrier service when the FTC brought the case.)

Earlier in Oct, the FTC sought a new hearing in front of at least 11 of the 9th Circuit's judges. Sen Blumenthal argues in a proposed friend-of-the-court brief that the panel's ruling creates "a wide hole in FTC jurisdiction that undermines the agency’s ability to remedy deceptive acts committed by the growing range of companies that engage in common-carrier activity as well as non-common-carrier activity."

The political season has always posed problems for brand advertisers trying to fulfill media plans, given the diminished supply of inventory. Now, new research suggests that political ads — even those with positive messages — not only hog avails, but also deplete the effectiveness of adjacent brand ads and potentially tarnish brand image. The research is from J. Walter Thompson and Forethought, which found that brand advertising is perceived as 32% less relevant, 29% less entertaining and 27% less appealing when it follows a political ad. According to the research, the impact goes beyond just how consumers perceive a brand’s commercial. It negatively impacts the perception of the brand and product overall:
Brand reputation takes a 34% hit
Perception of product value declines by 32%
Product quality perception drops by 24%

“This research brings to light a couple of very interesting and surprising truths,” said Mark Truss, JWT’s global director of brand Intelligence. “Even political advertising with positive messages generates negative emotions in consumers. And the negative priming effect holds true even for very product-specific attributes, such as taste.”

Wall Street investors aren’t so sure that the nearly $85.4 billion deal AT&T is proposing for Time Warner will be an easy ride. Early Oct 24 trading pushed Time Warner’s stock down 2.4% to $87.33 -- all due to AT&T’s proposed deal for the company equating to a price tag of $107.50. For its part, AT&T’s stock was down nearly 2% to $36.80. Analysts are worried on two fronts: First, that federal regulatory concerns will make it a tough go for the merger to be completed. Second, that vertical media integration itself has had difficult times in working well.

Although AT&T claims it competes in virtually no areas where Time Warner operates, federal agencies may believe that media vertical integration -- that of the biggest pay TV provider in the US, AT&T’s DirecTV, and a big TV-movie content producer, Time Warner -- isn’t a good deal for consumers. Another outside reason for troubles for the deal: A new possible bidder, which is why AT&T rushed to complete it over a weekend -- just two weeks before the presidential election. Donald Trump, for example, has already said he is against the merger; Hillary Clinton will generally be tougher on mergers overall. Still, favoring this merger could be the singular weaknesses of different media companies. That could mean other possible big media deals.

Broadband providers have spent months complaining that proposed new privacy rules would unfairly subject them to more stringent privacy rules than Google, Facebook or other online companies. Today, privacy guru and law professor Paul Ohm -- an outspoken proponent of tough privacy rules -- answers that objection. Internet service providers, Ohm says, should have to follow tough standards because ISPs pose a greater threat to privacy than other companies. "Your ISP is the mandatory first hop to the rest of the Internet, and everything you do while connected to a particular ISP flows first through its servers," he writes in a post at Benton Foundation. "Your ISP can develop a nearly-comprehensive picture of what you do that other companies would pay a king’s ransom to be able to access."

Broadband providers AT&T, Comcast and T-Mobile have officially asked the Federal Communications Commission to retreat from a privacy proposal that could limit online behavioral advertising.

The proposal would require Internet service providers to obtain consumers' explicit consent before drawing on their app usage or Web-browsing histories for ad targeting. That proposal applies only to companies that offer Internet access services like Verizon and Time Warner as opposed to online publishers, search engines and other so-called "edge" providers. Google, Facebook and other Web site operators currently let people opt out of receiving behaviorally targeted ads, but don't seek people's advance permission unless drawing on data the ad industry considers "sensitive." In general, that ad industry says the concept includes precise geolocation information, financial account numbers and health-care data. AT&T, Comcast and T-Mobile are now lobbying the FCC against the proposed rules. AT&T vice president Joan Marsh spoke with the agency and espoused the view that customers "do not expect different rules to apply to the various entities within the internet ecosystem." T-Mobile argued in a separate filing for "a level playing field among ISPs and edge providers." The company adds that it should not have to obtain consumers' opt-in consent before drawing on their "non-sensitive" Web browsing and app usage history. Comcast senior vice president Kathryn Zachem likewise told FCC last week that broadband providers should be able to draw on subscribers' "non-sensitive" Web-browsing and app usage history for ad targeting on an opt-out basis.

Federal Communications Commission Chairman Tom Wheeler said that he anticipates finalizing broadband privacy rules later in 2016. Testifying at a Senate hearing, Chairman Wheeler also hinted that the final regulations could differ from a proposal he put forward earlier this year. That initial proposal would require Internet service providers to obtain consumers' consent before drawing on their Web-surfing data for behavioral targeting. Ad networks, online publishers and other online advertising companies, by contrast, typically operate on an opt-out basis. While Chairman Wheeler didn't elaborate on how the rules may evolve, he said in his prepared testimony that the Federal Trade Commission's input "has been particularly helpful."

Staff at the FTC recommended earlier this year that Internet service providers should obtain opt-in consent before using "sensitive" data for ad targeting, and allow consumers to opt out of the use of "non-sensitive" information. Some broadband carriers have argued that they should be able to treat sensitive and non-sensitive data differently. Verizon, for instance, argued in an FCC filing that it should only be required to obtain opt-in consent for "the most sensitive use cases." But privacy advocates have argued against different rules for different types of data. "A rule that varies based on sensitivity will be a much more complex, unpredictable, and less privacy protective one," privacy expert and former FTC adviser Paul Ohm recently told the agency. What's more, he adds, figuring out whether information is sensitive "requires far more invasion of privacy as well as far more surveillance."

Netflix is calling for the government to crack down on broadband providers that impose data caps on their subscribers.

Data caps "discourage a consumer’s consumption of broadband, and may impede the ability of some households to watch Internet television in a manner and amount that they would like," Netflix says in a new filing with the Federal Communications Commission. Netflix is urging the FCC to rule that all data caps on wireline networks, as well as "low" data caps on mobile networks, may "unreasonably limit Internet television viewing." The company adds that data caps (as well as pay-per-byte billing) don't seem to have any purpose other than to make online video more expensive for consumers. Consumer advocates have made the same point, arguing that data caps don't help manage congestion on wireline networks, given that the caps aren't pegged to current network conditions.