October 2009

Will Copyright Issues Interfere With the National Broadband Plan?

A panel discussion last week about what can be done to protect copyrighted content over the Internet united discussions of intellectual property protection with the congressionally-mandated effort to create a national broadband plan. The possibility of a national broadband plan being adopted in the coming year raised the possibility that content may be more readily available to consumers. This might mean that piracy might become more widespread, too. Speaking at a "digital breakfast" held on October 1 by Gotham Media Ventures, moderator Paul Sweeting, a media and technology consultant, cited a French law putting consumers on notice that broadband access may be denied if they are caught downloading illegal content. According to Michael O'Leary, executive vice president of governmental affairs at Motion Picture Association of America, there are various ways of dealing with copyright-infringing content, some more effective than others.

The death of the media mogul

[Commentary] Reinhard Mohn, the man who turned Bertelsmann from a printer of Protestant bibles in a small town in Germany to a global media company that employs 106,000 people, died on Saturday at the age of 88. His life has encouraging and discouraging lessons for media companies as they confront the upheaval of recording, print and broadcasting industries caused by the Internet. A true entrepreneur can seize upon social and technological changes to revolt against traditional ways of doing business and forge new ones. But the Internet presents a different type of challenge to those Mohn confronted. The challenge of the Internet is that it blows up the control of distribution, ensuring that all content owners compete on equal terms. Moguls can no longer exploit its scarcity by buying television spectrum or by owning printing presses. That is why media moguls have been pushed on to the defensive by a new breed of technology moguls such as Steve Jobs of Apple and Sergey Brin and Larry Page, co-founders of Google. Control of distribution has passed to people who make the software through which content passes.

New 'consumer-intelligence' technology will compile detailed profiles

[Commentary] A new startup called Causata, led by Paul Phillips and boasting a proven team of techies and $4.5 million in venture funding from Accel Partners, aims to push customer-intelligence technology to an unprecedented level. Harnessing advances in distributed computing and machine learning, Causata aims to pioneer the development of a "multichannel customer interaction platform" that can be deployed by big retailers and financial services firms. The platform would constantly update its profiles of customers, effectively "learning" from any purchase or query and adding that to personal information in its database. It might "know" that you like skiing, wine and jazz, and be cognizant of your location and calendar. Imagine a text message that, say, includes your spouse's name in a reminder about your upcoming anniversary, because you inserted the date on a wedding registry years before.

Google to Revise a Book Pact by Nov. 9

The parties to a Google book settlement that would allow the creation of a vast digital library outlined on Wednesday an aggressive timeline for modifying the agreement to satisfy objections from the Justice Department and others. After a hearing in Federal District Court for the Southern District of New York on Wednesday morning, Judge Denny Chin set Nov. 9 as the date by which Google and its partners must submit a revised settlement for the court's preliminary approval. Michael J. Boni, a lawyer who represented authors, said the parties hoped for a final hearing on the modified settlement in late December or early January. To meet that schedule, Boni asked the judge to allow Google and its partners to shorten the period for accepting comments or objections from all parties affected by the amendments. Judge Chin broadly agreed. "I think everyone has a pretty good idea of what is on the table."

Blogged and Sold

[Commentary] These are the amazing new methods that the persuasion industry has developed. And running behind this wild new world of marketing like a Pomeranian racing for a bullet train, the Federal Trade Commission has now promulgated guidelines that compel celebrities and bloggers and those horror hybrids, blogger-celebrities, to reveal when they are compensated for any association with products. Stealth marketing, direct advertisement and product placement work only on the clueless, and our immersive, hippo-like wallowing in the marketplace serves only to make us resistant to these viral contagions. Because the more we are sold to — and, believe it, we are being pitched every minute — the more immune we are to it all.

IBM Faces Justice Antitrust Inquiry

The Justice Department is investigating allegations that International Business Machines Corp. has monopolized the market for mainframe computers, broadening Washington's search for anti-competitive behavior in the technology industry. Members of the Computer & Communications Industry Association—a group with many IBM rivals among its members—recently received civil investigative demands from the Justice Department seeking information related to IBM, said the group's chief executive, Edward Black . The requests, a special kind of subpoena used in antitrust investigations, followed a complaint by the group to the Justice Department accusing IBM of harming businesses by abusing its dominance of the market for mainframes.

Ciena Makes Bid For Nortel Unit

Ciena, a maker of fiber-optic-network equipment, offered to buy Nortel Networks' optical networking business for about $521 million in an effort to expand internationally. The price includes $390 million in cash and 10 million shares of Ciena common stock, the companies said Wednesday. Revenue generated by the assets topped $550 million in the first half, Ciena said. Ciena, which gets about two-thirds of its revenue from the United States, made the bid in hopes of adding to its fiber-optic network products, broadening its customer base in Europe and Asia, and adding Nortel customers like Spain's Telefonica. Nortel's optical business operates in more than 65 countries, providing high-speed data networks across cities.

Pro-telecom group Connected Nation misses out on first broadband stimulus $$$

Broadband stimulus money watchers and recovery plan tea leaf readers are cheering news of the first winners of the Department of Commerce's grants program for broadband mapping projects. They're pleased that the recipients are independent state agencies rather than groups affiliated with the telco/cable-backed non-profit Connected Nation. "We hope that trend continues," Connected's outspoken critic Art Brodsky at Public Knowledge told us. Other observers think that it will. What made these applications stand out? The applicants handed in "well-formed proposals" that were "fiscally prudent" and could serve "as a model for others," explained National Telecommunications & Information Administration boss Larry Strickling. But that's sort of a "duh"—the minimum that any government program should expect. More tellingly, NTIA praised these proposals for three additional qualities. Significantly, while the applicants plan to collect broadband use data from ISPs, "each also described plans to collect or utilize data from other sources," the agency explained. "Examples include wireless propagation models, speed tests, online and field surveys, and drive testing." They also pledged to use a variety of verification methods to test the accuracy of their data, and work with an array of state agencies to get the job done.
Hovering over this discussion, of course, is the question of whether the task of national broadband mapping will be dominated by the Connected Nation group or by a consortium of NTIA-funded state entities that go out and dig up their own mapping content. Connected's detractors warn that its strategy "is to accept public funds for collecting information from its sponsors which is then kept largely private, hidden behind strict non-disclosure agreements. This privatized data gathered with public money is a violation of the public trust." Connected Nation defends its reliance on confidential arrangements with providers, arguing that it limits its non-disclosure data to "highly sensitive network infrastructure information," which it protects "in order to protect the physical integrity of the backbone of the United States' communications system—an issue of homeland security." The group also says it wants to defend the "proprietary infrastructure and equipment information" of providers. Needless to say, it's pretty early in the game to predict where NTIA will actually go with this next. The agency still has a slew of bids to process, and Connected and its affiliates have eligible applications in Arkansas, Iowa, Kansas, Michigan, Minnesota, Nevada, South Carolina, Tennessee, and Texas.

Why metered broadband won't last

When Verizon's chief technology officer, Dick Lynch, recently predicted an end to flat-rate broadband, many in the industry saw it as a late entry into the general consensus. After all, the combination of runaway consumer bandwidth demand and meager service provider revenue growth is unsustainable, right? "The concept of a flat-rated infinitely expanding service for everyone just won't work," Lynch told the audience at the Fiber-to-the-Home Conference. Not everyone agrees. "I think ultimately we'll end up with a simple flat rate," said Craig Labovitz, chief scientist for Arbor Networks, which sells network management systems. "The question is over what time scale." "Generally stuff starts out flat-rate, and it's very expensive for a select few," Labovitz said, citing the telegraph and the telephone as examples. "Then as it becomes more ubiquitous, it becomes metered as you try to relax capacity...and you try to dis-incentivize people from using your capacity. And then it ends up being flat-rate again as ultimately there's a strong economic [force toward] consumers preferring simplicity as a key metric."

Media Council Hawaii Asks FCC to Block Raycom/MCG Shared Service Agreement

Public Interest Group Media Council Hawaii is asking the Federal Communications Commission to block Raycom and MCG Capital's shared service agreement, in which Raycom, which owns NBC affiliate KHNL and MyNetworkTV affiliate KFVE would also operate CBS affiliate KGMB, owned by MCG. The group is asking the FCC to enjoin the two companies from executing the agreement later this month, saying it would do "imminent" harm to viewers "through its negative impact on diversity and competition." Media Council Hawaii says the agreement, because it allows Raycom to control the local news, personnel and finances of the three stations, is the equivalent of a transfer of license that violates FCC local TV ownership rules.

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