April 2010

Wireless group pushes hunt for spectrum

The US wireless industry is pressing a key senator to clear the way for a government study that could accelerate plans to free up airwaves for devices such as smart phones.

Sen Tom Coburn (D-OK) has blocked the Senate's spectrum inventory measure from moving through the chamber because he believes the measure will add to the country's budget deficit due to its $22 million price tag. But a meeting on Tuesday between Sen Coburn and Steve Largent, who heads the CTIA wireless industry trade group yielded some progress, raising hopes the strained wireless industry could get relief.

Democrats push to stem corporate campaign money

Democratic lawmakers on Thursday introduced legislation to blunt the impact of a recent Supreme Court ruling that allows corporations, unions and other groups to spend unlimited funds on political campaigns.

Unveiled by Sen Charles Schumer (D-NY) on the steps of the court, the White House-backed initiative calls for the unprecedented disclosure of money in politics three months after the court ruled 5-4 that long-standing campaign finance limits violated the free speech rights of corporations. New measures require corporations, unions and other groups to disclose their financial roles in political TV campaigns including those that favor or oppose specific candidates. The measures require corporate, union and advocacy group leaders to disclose their names in TV ads. The measures also ban election spending by government contractors, companies with over 20 percent foreign ownership and bank bailout recipients. "This legislation will stop the funneling of big money through shadow groups in order to fund ads that are virtually anonymous," said Schumer, who wants a Senate vote by July 4.

Comcast, Time Warner Cable Rise on Internet Potential

Comcast and Time Warner Cable, the two largest cable television companies in the US, reported better-than-expected earnings this week, sending their shares surging, largely on the strength of their Internet businesses.

The companies added nearly twice as many broadband customers in the first quarter as the combined total for Verizon Communications and AT&T. The cable companies also reaped more revenue on average from their TV customers, alleviating concerns that pinched consumers would hurt their core business. Time Warner Cable climbed 7.6 percent, the most in a year, while Comcast rose 6.3 percent, the most in almost five months. In almost 60 percent of the U.S., cable operators have no competition or compete only against the phone companies' older, slower DSL technology, making the cable companies the only option for those who want to surf the Web at high speed, according to Bernstein data. Comcast Chief Executive Officer Brian Roberts and Time Warner Cable's Chief Glenn Britt have both increased marketing of their high-speed Internet services and cited their growth potential.

Apple Reported New IPhone Was Stolen, Prosecutor Says

An Apple lawyer told law enforcement officials last week that a prototype iPhone belonging to a company engineer was stolen, sparking an investigation that led a crime task force to seize computers from an editor whose blog bought the phone, a prosecutor said.

An attorney with O'Melveny & Myers LLP representing Apple and the engineer contacted the District Attorney's office to report the item as stolen, said San Mateo County Chief Deputy District Attorney Stephen Wagstaffe. They were referred to California's Rapid Enforcement Allied Computer Team, which started an investigation. "They said there was a belief that this had been stolen and we want to make sure it's investigated, and we agreed," Wagstaffe said today in a phone interview. "It was reported as stolen property."

TV Stations Forecast Revised Upward

With the ad economy bouncing back and political revving up, analysts are revising their forecasts for TV stations upward. In its latest forecast, BIA/Kelsey is calling for a 6.5 percent increase for over-the-air TV station revenue to $17 billion. It's the third time BIA/Kelsey has made an adjustment to its forecast. In March, the firm predicted TV station revenue would increase 4.3 percent to $16.8 billion. The digital revenue forecast hasn't changed. BIA/Kelsey still forecasts digital will hit $600 million in 2010, a 20 percent gain. In 10 states where there are hotly contested races, TV revenues are expected to grow by nearly 8 percent or more, such as in Arkansas, Pennsylvania, Texas, Ohio and Colorado.

E-rate on FCC's May 20 Agenda

Federal Communications Commission Chairman Julius Genachowski announced that the following items will be on the tentative agenda for the next open meeting scheduled for Thursday, May 20, 2010:

Mobile Wireless Competition Report: The 14th edition of the Mobile Wireless Competition Report, analyzing the state of competition in the mobile industry by expanding upon previous FCC inquiries and considering the broader mobile wireless ecosystem.
WCS-SDARS Report and Order: A Report and Order that enables robust mobile broadband use of 25 MHz of spectrum in the 2.3 GHz Wireless Communications Service (WCS) band while protecting neighboring incumbent operations.
E-Rate NPRM: A Notice of Proposed Rulemaking initiating reforms to the E-Rate program to make broadband more accessible in schools and libraries, and to cut red tape.
Pole Attachments Order and FNPRM: An Order and Further Notice of Proposed Rulemaking to implement the National Broadband Plan recommendations to foster competition and broadband deployment by ensuring nondiscriminatory, just, and reasonable access to utility poles.
Local Number Portability Report and Order: A Report and Order standardizing the processes for transferring telephone numbers in one business day to ensure the benefits of competition for consumers.

International Competition Network Adopts Recommended Practices to Improve Merger Analysis

At the ninth annual International Competition Network conference in Istanbul, Turkey, the ICN adopted Recommended Practices for substantive merger analysis, approved a pilot project for a virtual university on competition law and practice, and held discussions about the analysis of refusal to deal and margin squeeze conduct under unilateral conduct laws.

Other important developments of the conference were based on the work of the Merger Working Group, co-chaired by the Antitrust Division and the Irish Competition Authority. During the conference, ICN members adopted two detailed Recommended Practices for Merger Analysis. The new Recommended Practices for merger analysis address:

Market Definition in Merger Review. Agencies should address the competitive effects of a merger within economically meaningful markets. The hypothetical monopolist test is an appropriate test to determine the relevant market(s) in which to analyze the competitive effects of a merger.

Failing Firm/Exiting Assets Analysis. Agencies should carefully review claims by the merging parties that a merger will not harm competition because the acquired firm and its assets would have exited the market absent the merger in any event.

The cloud and the future of the Fourth Amendment

In mid-April, a coalition of privacy groups filed a brief in federal district court in Colorado, defending Yahoo against attempts by the federal government to obtain the contents of Yahoo Mail messages without first obtaining a warrant. One month earlier, the Justice Department filed a 17-page brief arguing that Yahoo Mail messages do not fall under current statutory protection because, once opened, those messages are not considered to be in "electronic storage."

The privacy coalition -- which included Google -- came to Yahoo's defense, arguing that users with e-mail stored in the cloud have a reasonable expectation of privacy in the contents of that e-mail, and should thus be protected from warrantless searches by the government. (Hopefully the irony of Google opposing robust searches is not lost on Google's attorneys.) Unfortunately, the protections afforded by the warrant requirement have not yet been fully extended to the digital "cloud." This handy metaphor for the ethereal Internet as a storage and access hub is coming to have other implications: can we really conceal our data inside this cloud, shielding it from government intrusion? In fact, there is not even any guarantee that e-mails stored locally on a personal home computer will be afforded such protection. But as this novel question has remained unanswered by the sloth-like pace of legal innovation, a dozen more questions have cropped up. Meanwhile, the technological innovators are demanding faster answers.

Forget the exaflood -- get ready for the "exacloud"!

Bret Swanson, the man who coined the term "exaflood" (referring to the exabytes of data surging through the Internet's routers), filed comments with the Federal Communications Commission this week about the "exacloud" -- call it online gaming or cloud streaming... "It is cloud computing but of a scope and scale never seen before."

He adds, "This exacloud will transform video games, movies, virtual worlds, business software, and most other media. Piracy goes away. So do DVDs, game boxes, and maybe even expensive personal computers. New content and software subscription models open up. Based in the cloud instead of on your device, interactivity thrives. This new paradigm generates enormous amounts of Internet traffic. High-definition video requires big bandwidth, and real-time applications tolerate very little delay. UC-San Diego estimates that 55% of total American information consumption, or 1,991 exabytes per year, is (brace yourself) video games. If just 10% of these games moved online, they would generate twice the worldwide Internet traffic of 2008. Video is not always the most important content on the Web, but it defines the architecture and capacity of (and often pays for) the networks, data centers, and software that make all the Web's wonders possible."

Majority of Stations Delivering Content on Multiple Platforms, Survey Shows

A study from the Radio-Television Digital News Association and Hofstra University finds almost a third of TV station news directors say they run local news on another TV station, while twice as many are putting content on a mobile device as were in 2009.

The largest markets are focusing on three screens-on-air, online, and mobile-with 68.8% saying those are their major platforms. Another 60% say they are in a news-sharing situation, whether it be a feed or a helicopter. Of those not pooling resources now, another 28% said it was on the radar screen.

Benton

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