July 2010

Should broadband data hogs pay more? ISP economics say "no"

It is good to be an Internet service provider. In fact, it's better than being a cable operator, since there are no multibillion-dollar payments to content creators.

Time Warner Cable's revenues from Internet access have soared in the last few years, surging from $2.7 billion in 2006 to $4.5 billion in 2009. Customer numbers have grown, too, from 7.6 million in 2007 to 8.9 million in 2009. But this growth doesn't translate into higher bandwidth costs for the company; in fact, bandwidth costs have dropped. TWC spent $164 million on data contracts in 2007, but only $132 million in 2009. What about investing in its infrastructure? That's down too as a percentage of revenue. TWC does spend billions each year building and improving its network ($3.2 billion in 2009), but the raw number alone is meaningless; what matters is relative investment, and it has declined even as subscribers increased and revenues surged. "Total CapEx [capital expenses] as a percentage of revenues for the year [2009] was 18.1 percent versus 20.5 percent in 2008," said the company a few months ago. In fact, CapEx has declined for the industry as a whole. As the National Broadband Plan noted, the big ISPs invested $48 billion in their networks in 2008 and $40 billion in 2009. (About half of this money can be chalked up to broadband; the rest of the improvements were done to aid cable or phone service.)

To recap: subscribers up, revenues up, bandwidth costs down, infrastructure costs down. This might seem like a textbook case of "viability"; what were Time Warner execs talking about last year when data caps were held up as a necessary safeguard against doom? TWC's single biggest expense for Internet access is not network investment or bandwidth. It's labor. As Internet use increases, TWC techs, engineers, and executives need to make adjustments. Paying all of these people costs money, and those costs increase as the network is more heavily used.

New LTE network embraces the 'dumb pipe'

Harbinger Capital Partners has formalized its plans to create the first wholesale-only 4G network in the US, announcing an ambitious plan to build out a nationwide long-term evolution footprint covering 92% of the population in five years, supplemented by satellites that will increase its population penetration to 100%.

Nokia Siemens Networks won the infrastructure contract for the project and will manage network operations, creating a deal it estimates will be worth $7 billion over eight years. Called LightSquared, the new operator will sell 4G and satellite broadband connections by the gigabyte to national and regional wireless, wireline and cable operators; retailers; device-makers; and Web-content providers. "We will be the first quote-unquote 'dumb' wireless pipe," said Frank Boulben, its chief marketing officer, who has joined the new company after previous executive stints at Orange and Vodafone. "As we're not [launching] our own brand, we're not competing with our customers. We can only make money if our customers make money."

Texas Agriculture Commissioner draws fire over broadband map contract

At an unveiling last month, the Texas Department of Agriculture touted its map of broadband Internet availability as the first step in closing a "digital divide" that denies rural Texans critical services. But a political divide has opened instead, as critics question the tool's accuracy and Agriculture Commissioner Todd Staples' relationship with the organization that created it.

Staples' Democratic rival, Hank Gilbert, and a handful of local providers, consumer groups and mapping organizations say the agency tailored the application to fit Connected Nation, the nonprofit selected by the department and the Texas Public Utility Commission to create the map. The Agriculture Department and the company defend the process, while their critics contend that the map will direct federal stimulus money toward major telecommunications companies at the expense of smaller Internet providers.

Newspaper Guild: Keep Media Cross-Ownership Ban

The Newspaper Guild is urging the Federal Communications Commission not to relax its rules limiting same-market common ownership of a newspaper and broadcast property. Loosening the 35-year cross-ownership rules will only lead to more consolidation, the Guild argues in a joint submission to the FCC with the National Association of Broadcast Employees and Technicians (NABET). And consolidation, the CWA-affiliated unions argue, is at odds with the aim of the FCC's quadrennial review of media ownership rules, which is to promote media diversity, competition and localism.

Will Crowdsourcing Public Opinion Lead to Government Action?

Washington has launched a series of democratic idea incubators that aim to align government action with public opinion. Taking advantage of a platform called IdeaScale, these open government initiatives enable the public to submit and vote on ideas for anything from state budgets and federal transparency to health care priorities and education.

While this may sound like big step forward for the typically tech- agnostic public sector, the results, at least so far, demonstrate why crowdsourcing may be an ineffective government tool. Crowdsourcing relies on the assumption that the public will be able to produce better ideas, or in this case, at least ones the government has yet considered. But lawmakers can't pass bills simply because they've captured public opinion--legislation today is so complicated that it's perhaps beyond the public's capacity to offer a fix.

Take the FCC's Broadband IdeaScale page, in which it asks voters to brainstorm ideas on creating a National Broadband Plan. Of the 249 proposals submitted, the most popular reads: "Bring the United States mobile broadband pricing in line with the rest of the world." The submission includes a helpful list of countries that provide less expensive Internet access. Other popular ideas range from "catching up with Korea" to "promot[ing] telecommuting--reduce time and energy waste." As you might guess, these ideas are not exactly novel, and they are absolutely not easy to enact.

Google To FTC: Government Role In Helping News Industry Should Be Limited

Google just posted its response to proposals the Federal Trade Commission has said it is looking into in order to support the "reinvention of journalism."

In the document, Google argues that the challenges facing the news industry are business problems, not legal problems, and can therefore "only be addressed effectively with business solutions," which it says it is helping the news industry develop. "The ultimate solutions that will result in a new online equilibrium for the news industry cannot ... be mandated by changes in the regulatory framework or a change in copyright laws," the company says. Google comes out against several of the proposals the FTC has said it is looking at. For instance, the company says there is no need to modify the Copyright Act to include specific guidelines for "aggregators and search engines," saying that interpretation of that law is best left to the courts. And it says it's opposed to any new antitrust exemptions that would let news sites put up pay walls together and also jointly charge news aggregators (including, presumably, Google News), saying that the changes would likely be ineffective and be harmful to consumers.

House Commerce Committee
Wednesday, July 21, 2010
10:00 a.m.



July 20, 2010 (FCC Not Helping Minorities)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, JULY 201, 2010

Today's agenda http://bit.ly/dcZ1nn


DIVERSITY
   FCC not Helping Minorities Claims Minority Media & Telecom Council
   Minority Entrepreneurs Advised To Focus On New Media
   FCC 'has not forgotten' minority ownership report
   Muleta Believes that Lowering Reoccurring Costs will Spur Adoption

WIRELESS
   Snowe, Kerry Introduce Spectrum Reform Bill
   Apple responds to lawmakers' questions about location data collection
   Nokia Siemens buys Motorola network operations for $1.2 billion

INTERNET/BROADBAND
   Telco Lobby Loses its Best Stats as the U.S. Falls in Broadband Ranking
   BTOP Support for Project to Improve Broadband Adoption by People with Disabilities
   The Future of Broadband Is Here Today - And You're Going to Miss It
   The deluge of data: Opportunity knocking?
   Google launches Fiber Communities Web site - what about an actual fiber deployment?
   Kansas puts big bet on broadband
   Spending Soars on Internet's Plumbing
   Reforms urged in federal funding for phone lines
   Nokia Siemens wins $7 billion Harbinger deal
   Online retailers need to collect sales taxes
   Advanced Cyber-Attacks on the Rise in 2010

DIGITAL CONTENT
   New Privacy Bill Released, House To Consider Thursday
   Rupert's Paywall is Meant to Keep People In, Not Out
   Survey Reveals U.S. Tweets and Blogs More Than Any Other Nation
   You Want My Personal Data? Reward Me for It
   Hardcovers fall behind Kindle book sales at Amazon
   Banned TV Episode Has Its Day on DVD

POLICYMAKERS
   The Technocracy Boom
   Rivals say Google has too much sway over Administration's network neutrality policy
   Disclose Act backers push Sens. Collins, Snowe for support

OWNERSHIP
   Intel reaches antitrust accord with FTC

MORE ONLINE
   London tries next revolution in connectivity: talking, not Tweeting
   FEMA mobile site aimed at disaster survivors
   Reps seeking changes to retransmission rules
   Media companies push back against Reps. Israel, King

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DIVERSITY

FCC NOT HELPING MINORITIES
[SOURCE: BroadbandBreakfast.com, AUTHOR: Lindsey Sutphin]
The Federal Communications Commission (FCC) is not making adequate achievements in including minorities and women, according to David Honig, president and executive director of the Minority Media & Telecom Council (MMTC). He says market barriers and lack of opportunity are decreasing minority involvement in the broadband, telecom, and media industries. America's most important industries, which certainly include broadband, should reflect the social landscape of the country itself. The key indicators of minority broadband involvement ­ diversity of ownership, diversity in industry, and closing the digital divide ­ all show a net loss in the last few years. Honig said the MMTC had been involved and active in increasing minority participation in broadband, but said "We prevented a disaster from turning into a catastrophe." He said entrepreneurs have one of the hardest occupations, and that the MMTC should focus on finding and calling out market barriers that make it even more difficult for minorities to enter the broadband industry. For the first year in quite some time, the FCC has made no decisions concerning equal employment opportunities. Honig said the FCC has bright and well-meaning personnel, but they are too passive. In 2007, the FCC passed a ruling that made advertisement discrimination illegal. However, he said the FCC has yet to appoint someone to oversee this rule, and said "In almost three years the FCC has not had compliance to the first civil rights ruling since the '70s, and the first one passed without opposition."
benton.org/node/39647 | BroadbandBreakfast.com
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FOCUS ON NEW MEDIA
[SOURCE: Multichannel News, AUTHOR: John Eggerton]
Speaking at the Minority Media & Telecom Council's eighth annual Access to Capital and Telecommunications Policy Conference, Federal Communications Commission members Robert McDowell, Meredith Attwell Baker, and Mignon Clyburn said minority communications entrepreneurs should be focusing on opportunities in new media. opportunities in traditional media, they suggested, are on the wane. Commissioner McDowell said the description of broadcasting as a car with four flat tires was a "good analogy" -- it had been characterized thusly by a questioner from the audience. He said there might be opportunities to buy stations, given lower valuations, but added that that was because revenues were in decline. Commissioner Baker said applications will be a $30 billion business by 2013. "I think there may be value in some of the distressed broadcast assets," she said, "but to mind the new media is really where to focus."
The Minority Media & Telecom Council will announce a new organization to promote minority businesses in the digital age on July 20. According to MMTC Executive Director David Honig, the attendees will be asked Tuesday night to vote on a name and officially launch what he called a "new movement" of minority digital entrepreneurs."
All three FCC Commissioners agreed that Congress needs to pass legislation reinstating the tax certificate policy, which would give media owners a tax break for selling media properties to socially and economically disadvantaged businesses. All three commissioners also said access to capital was the top barrier to boosting minority participation, but Commissioner Clyburn said number two on the list was media consolidation.
benton.org/node/39646 | Multichannel News | Broadcasting&Cable
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WHERE'S THE SEC 257 REPORT?
[SOURCE: The Hill, AUTHOR: Sara Jerome]
Federal Communications Commission members Mignon Clyburn Robert McDowell assured Minority Media and Telecom Council and others on July 19 that an overdue report on minority media ownership remains on the way. The "section 257" report, mandated every three years by communications law, was due in 2009 to address barriers to media entry for small businesses. But the report has yet to make its way out of the agency. Minority groups have raised concerns this year about the lateness of the report. Commissioner Robert McDowell said the report is "in circulation" and "being edited."
benton.org/node/39645 | Hill, The | BroadbandBreakfast.com
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LOWERING COSTS WILL SPUR ADOPTION
[SOURCE: BroadbandBreakfast.com, AUTHOR: ]
Speaking at the Minority Media & Telecom Council's eighth annual Access to Capital and Telecommunications Policy Conference, John Muleta, Founder and CEO of M2Z, said the high cost of devices and connectivity are causing the digital divide. He offered an idea of giving low income consumers free access for a short period of time to allow them to discover how the Internet will improve their lives. Once consumers understand the value of the Internet they will then be willing to pay for service.
benton.org/node/39643 | BroadbandBreakfast.com
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WIRELESS

SPECTRUM MEASUREMENT AND POLICY REFORM ACT
[SOURCE: US Senate Commerce Committee, AUTHOR: Press release]
On July 19, Sens Olympia Snowe (R-Maine) and John Kerry (D-MA) introduced the Spectrum Measurement and Policy Reform Act, comprehensive spectrum reform legislation to modernize the nation's radio spectrum planning, management, and coordination activities. The senators designed the bipartisan measure to complement the Federal Communications Commission's (FCC) National Broadband Plan in promoting more efficient use of spectrum and ensuring that the proper framework is in place to meet the future telecommunications needs of the nation. Specifically, the Spectrum Measurement and Policy Reform Act tasks the FCC and the National Telecommunications and Information Administration (NTIA) to perform much needed spectrum measurements to determine actual usage and occupancy rates. This data will assist policymakers and the public in making informed decisions about future spectrum uses. In addition, the bill requires greater collaboration between the FCC and NTIA on spectrum policy and management related issues, implementation of spectrum sharing and reuse programs, as well as more market-based incentives to promote efficient spectrum use; and, sets a deadline for the creation of the National Strategic Spectrum Plan, which will provide a long-term vision for domestic spectrum use and strategies to meet those needs. [more at the URL below]
benton.org/node/39635 | US Senate Commerce Committee | Public Knowledge
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APPLE AND LOCATION DATA COLLECTION
[SOURCE: Los Angeles Times, AUTHOR: David Sarno]
Apple answered congressional questions about the ways it collects users' precise location information from its mobile devices and computers, highlighting users' ability to opt out of data collection, but acknowledging that it collects and stores "batched" user location data that is not directly associated with a particular identity or device. Apple's answers came in a document released July 19 by Reps. Ed Markey (D-MA) and Joe Barton (R-TX), who sent the electronics maker a list of questions last month after the Los Angeles Times published a report pointing to the company's practice of collecting, storing and sharing the "precise," "real-time geographic location" of users' mobile devices. Apple noted that user location information cannot be collected unless a user has the device's location-services turned on, and has allowed individual applications such as Google Maps or Yelp to use location data. For many users, these settings are set the first time they use a device and application, but not seen frequently afterward. Once a user has accepted those terms, the company can collect and store the data. It does so, it says, by collecting "batched" sets of location data from user devices once every 12 hours. Devices with GPS chips -- like all recent-model iPhones -- know their position based on satellite signals, and others can triangulate their location using data about nearby cellular towers and Wi-Fi access points. Reps Markey and Barton thanked Apple for sharing basic information about their use of location data, but noted that industry practices in this area have been less than transparent.
benton.org/node/39642 | Los Angeles Times
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NOKIA BUYING MOTOROLA ASSETS
[SOURCE: Reuters, AUTHOR: Tarmo Virki]
Nokia Siemens Networks will buy Motorola's telecom network equipment business for $1.2 billion, in an effort to add mew customers in markets such as Japan and North America where it has been seeking growth. The idea is that a bigger Nokia Siemens Networks -- a venture of Nokia and Siemens -- would compete better than either company could have alone against rivals Sweden's Ericsson, China's Huawei and France's Alcatel-Lucent. Motorola and NSN have had a hard time battling bigger players to win business with large telephone companies in the cut-throat mobile gear market, which is expected by analysts to decline this year. Under the deal, Motorola, which brought in $3.7 billion revenue from network equipment last year, will still keep its network technology patents, which Nokia Siemens can use through a cross-licensing agreement. Motorola will also keep its i-Den network gear business that supports an older Sprint Nextel network and brought in roughly $400 million of its 2009 network revenue. After the deal, which is expected to close later this year, Motorola plans to split into two entities, one of which will include its mobile phone and set-top box business. The other business, which was previously to include network equipment, will now focus entirely on selling wireless technology to companies and clients such as public safety organizations.
benton.org/node/39641 | Reuters | Multichannel News
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INTERNET/BROADBAND

NEW CONNECTIVITY SCORECARD RELEASED
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
Sweden has overtaken the U.S. in a survey that measures how well a country uses broadband, primarily because the U.S. has stagnated on the consumer broadband side as compared to other top-performing nations. The Connectivity Scorecard, which is sponsored by Nokia Siemens Networks, measures not only the raw infrastructure used to deploy broadband, but also policies and the way people use it. The U.S. scored a 7.77 on a 10-point scale, while Sweden scored a 7.95. While the scorecard changes its data each year -- and as such is intended not to be a yardstick for measuring improvements over time, but rather a relative benchmark of how a country fares at single point in time -- in previous years, the authors of the scorecard have pointed out that the U.S. lags its peers on the consumer broadband side, while noting that the other top-ranked countries weren't far behind the U.S. Actually, the US lead in Internet usage and in areas such as Internet banking, Internet commerce and e-business has eroded somewhat. In many of these cases, while the US remains a substantially strong performer, it is now one of many rather than a clear leader. In the current edition of the Scorecard, many of these deep-seated trends have come to the fore. Those deep-seated trends include an inattention to boosting average upload and download speeds at consumer homes, a lack of penetration across the entire country and a decline in graduation rates, showing a less-educated population capable of wielding broadband connectivity effectively as a tool. Basically, the U.S. has been resting on its laurels while other countries have improved relative to the US.
benton.org/node/39629 | GigaOm | San Francisco Chronicle
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BTOP GRANT FOR DISABILITIES PROJECT
[SOURCE: National Telecommunications and Information Administration]
The Commerce Department's National Telecommunications and Information Administration (NTIA) today announced a nearly $15 million American Recovery and Reinvestment Act investment to help bridge the technological divide, boost economic growth, and improve communications for people with disabilities nationwide. The grant to Communication Service for the Deaf, Inc. (CSD) intends to expand broadband adoption among people who are deaf and hard of hearing and provide them with tools to more fully participate in the digital economy. CSD's Project Endeavor plans to employ a mix of discounted broadband service and specialized computers, technology training from an online state-of-the-art support center customized to the community's needs, public access to videophones at community anchor institutions across the country, and a nationwide outreach initiative. CSD plans to add new staff, proficient in sign language, to its contact center in South Dakota and expects to train up to 200,000 people who are deaf and hard of hearing in the use of video, real-time text-based communications, and other specialized broadband technologies. The project also intends to facilitate improved access to enhanced 911 public safety services by those who are deaf or hard of hearing.
benton.org/node/39631 | National Telecommunications and Information Administration
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THE FUTURE OF BROADBAND IS HERE
[SOURCE: GigaOm, AUTHOR: Craig Settles]
[Commentary] While the various federal agencies and Congress discuss, pontificate and wage war over the future of broadband, here's a little secret. That vision they have of getting 100 Mbps service to 100 million homes by 2020? Several U.S. markets have already gone way beyond it to deliver the future of broadband today. In many respects, Washington insiders determined to get the U.S to a better place when it comes to broadband are held back by large telcos, forced to fight last century's telecom wars. But while Washington debates, many markets miss out. Those who want better broadband should take their lessons from some of the cities who have successfully deployed their own networks. While the Federal Communications Commission explores a third way on a path made needlessly longer by national corporate interests, local markets are delivering broadband's future faster with a fourth way. Congress and the FCC could do the U.S. a world of good by keying in on this possibly better way, and by changing how we think about the task of bringing true broadband to communities that need and want it. Champions of free market forces may want to consider the merits of this approach to broadband that Communities United for Broadband finds effective in calling small-town and urban America to action. The principles of the approach are as follows:
1) Our community is a free market.
2) As a market, our businesses, local government, institutions and individuals collectively spend significant dollars on communication services.
3) Despite our spending as a market, we have un-met broadband needs and unfulfilled dreams.
4) Subsequently, we will use our purchasing power and political clout to get the broadband we need and want through private- and/or public-sector solutions.
5) Key to the success of our free market strategy is our ability to encourage, facilitate or create competitors in our market, which we will do.
benton.org/node/39630 | GigaOm
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DELUGE OF DATA
[SOURCE: Fierce, AUTHOR: Craig Settles]
[Commentary] Three opportunities telecommunications companies seem to be missing:
1) AT&T's seeming failure to recognize a creative solution to the imminent tsunami of iPhone/iPad data traffic that's about to engulf its networks;
2) incumbents gnashing of teeth about stimulus-funded networks overbuilding their areas; and
3) the bitter griping about the Federal Communications Commission's 4 Mbps speed goal for rural America.
AT&T's network performance has taken a beating from iPhones' data consumption. The old-fashion, sadly predictable response is to slap a cap, tout tier pricing and flail like mad to get the ole copper mare to run like she used to. Geez, the rest of the free market is stampeding toward enticing people to use more data and you want them to use less? If AT&T's CTO John Donavan is truly serious about moving heaven and Earth to improve their network service, he has to get the company to stop looking back to the obsolete but look forward to new opportunities. Such as municipal wireless.
benton.org/node/39628 | Fierce
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WHERE'S GOOGLE'S FIBER?
[SOURCE: Connected Planet, AUTHOR: Rich Karpinski]
[Commentary] Tell us if you haven't heard this one before. Google pledges to deploy a red-hot network technology but instead uses blog posts and regulatory hectoring to cause havoc for the service providers that ultimately must do the hard work to deploy real networks. It's EXACTLY the playbook Google used in the 700 MHz spectrum auction, saying it was interested in purchasing the spectrum but instead using its participation as a platform for pushing for open access while ultimately buying and deploying nothing. Call us skeptical but its Fiber Communities effort feels like the same play. We're certainly not underestimating the community interest in fiber deployment. And would applaud any Google effort -- actual deployment, funds targeted, new approaches championed, etc. — to get a good number of those 1100 community applications actually deployed. Indeed, prove us wrong by deploying fiber at any reasonable scale and we'll own up to it happily.
benton.org/node/39639 | Connected Planet
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KANSAS BROADBAND TASK FORCE
[SOURCE: Fierce, AUTHOR: Sean Buckley]
Kansas' governor Mark Parkinson believes broadband is essential for the state, so he has developed a 24-member task force that will help him reach his goal of bringing the service throughout the state. This task force consists of members of the telecom industry and end-users who depend on broadband services to do their daily jobs, including public safety. In addition, Gov Parkinson asked the state's secretaries agriculture and commerce to be on the task force, while legislative leaders will name four members. The creation of the task force comes after the state was awarded a $174 million broadband stimulus grant for its Connect Kansas program. One of Connect Kansas' major drives is to work with broadband providers such as Rural Telephone/Nex-Tech, which is in the process of building out a hybrid Fiber to the Home (FTTH)/WiMAX broadband network that will 23,000 homes and businesses, to understand where broadband gaps are by creating maps of broadband coverage.
benton.org/node/39638 | Fierce
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SPENDING ON THE INTERNET
[SOURCE: Wall Street Journal, AUTHOR: Don Clark, ben Worthen]
Behind the recovery in business spending is a surge in purchases of the computers that form the backbone of the Internet, as companies scramble to meet growing demand for video and other Web-based services. The need to reach customers and employees over the Web is driving furious demand for server systems, the machines that power corporate computer rooms. Many companies are stocking up on new servers, which typically cost a few thousand dollars apiece, to replace older machines with more energy efficient models or systems with more powerful processors. Also, an increasing number of businesses are turning to outsourcing companies, which manage computer rooms for customers and in many cases are sharply stepping up purchases of servers to keep up with rising demand.
benton.org/node/39660 | Wall Street Journal
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USF REFORM
[SOURCE: Washington Post, AUTHOR: Cecilia Kang]
Americans are turning away from home phone lines and toward mobile, but a federal program continues to pour $8 billion a year into phone service for rural homes and businesses. But as the nation looks to wireless and fiber broadband networks as its on-ramp to e-mail, tweets and Skype calls, lawmakers and regulators have called for sweeping changes to the Universal Service Fund. AT&T and Verizon were the top recipients of Universal Service Fund grants last year. The companies point to the subsidy as symbol of backward regulation, among a string of policy moves by the federal government that the companies say could hurt the economy. They also have argued against a proposal to redefine broadband as a telecommunications service, saying the move could lead to rate regulation and force them to share their networks with competitors. The FCC has proposed redirecting the program to support broadband. The agency has also suggested that only one provider in a geographic area receive grants. Public interest groups say there needs to be better oversight of whether firms getting the money truly qualify for it. The groups also say that wireless technology is cheaper to deploy than traditional phone lines or underground fiber networks, but that cellphone companies don't seem to be getting smaller awards. The groups also say the FCC should recalculate how much money it distributes for broadband connections because the return on investment is so much greater for Internet service. That should make companies better able to pay for their own operating costs without federal assistance, said Derek Turner, a policy director for the public interest group Free Press.
benton.org/node/39659 | Washington Post
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NOKIA GETS HARBINGER BUSINESS
[SOURCE: Financial Times, AUTHOR: Paul Taylor, Andrew Parker]
Harbinger Capital Partners, the New York-based hedge fund founded by Philip Falcone, has awarded a $7 billion contract to Nokia Siemens Networks to build a high-speed mobile phone network in the US. The new network, to be called LightSquared, will launch in the second half of next year and is aiming to provide near-ubiquitous coverage. The infrastructure will combine an orthodox mobile network with a satellite-based phone and data service.
benton.org/node/39656 | Financial Times
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ONLINE SALES TAXES
[SOURCE: San Jose Mercury News, AUTHOR: Editorial staff]
[Commentary] Annual online sales across the United States will account for nearly $150 billion in 2010. But cash-strapped states, including California, won't get more than a fraction of the $18.6 billion of sales tax they should be collecting. Congress and state legislatures need to find a way to end online retailers' unfair advantage over brick-and-mortar businesses -- and to reap a fair share of revenue, since so many states rely heavily on sales taxes to balance their budgets. Consumers enjoy the cheaper prices for products online. But local businesses that create jobs and generate revenue for our communities deserve to be on an equal footing with their online competitors as a matter of principle. And we all will benefit from the additional tax revenues that pay for public safety, transportation projects and other services. It's been 15 years since Jeff Bezos launched Amazon.com and introduced large-scale e-commerce to the world. When online companies like his were startups, it made sense to allow them a grace period on collecting sales taxes to promote a new industry. A case still can be made that small Web-based companies with sales of less than $100,000 should be exempt from collecting sales taxes. But too many large online and catalog businesses are enabling their customers to be tax cheats. If California had collected online tax revenues for the past decade, it would have an additional $10 billion at its disposal today, reducing its deficit by more than half. The Golden State is in no position to let another dollar of potential revenue go uncollected.
benton.org/node/39655 | San Jose Mercury News
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CYBERATTACK STUDY
[SOURCE: Government Technology, AUTHOR: Hilton Collins]
A new report confirms what has been a gut feeling in 2010 for cyber-security professionals: An increasing number of sophisticated cyber-attacks are occurring. These persistent threats are evolving and changing, perhaps too fast for traditional threat detection and remediation efforts to keep pace. Hackers are employing new attack methods to circumvent or "hide" from the security protocol and technology used by many organizations, according to the Security Labs Report released by M86 Security Labs, which divulged details of the security threats detected from January through June 2010. M86 releases security reports every six months. One emerging cyber-attack method, according to the report, is the "combined attack," which is more difficult to detect. Combined attacks split the code between the JavaScript language and the Adobe ActionScript language found in Adobe Flash. When the code is split, it's harder to detect.
benton.org/node/39650 | Government Technology
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DIGITAL CONTENT

RUSH PRIVACY BILL ON AGENDA
[SOURCE: MediaPost, AUTHOR: Wendy Davis]
Rep. Bobby Rush (D-IL) unveiled a privacy bill on July 19 that would require companies to obtain people's opt-in consent before disclosing their personal information to third parties in some circumstances. The bill appears to be similar to a draft measure floated in May by Rep Rick Boucher (D-VA), chairman of the Subcommittee on Communications, Technology and the Internet, but with some key differences. Both bills follow a notice-and-choice framework, and both require users' consent for online behavioral advertising, or tracking users across sites in order to serve targeted ads. Both also allow companies to obtain opt-out consent rather than opt-in, but under slightly different circumstances. Rush's measure would require Web sites to obtain users' explicit permission before sharing their personal information with third parties, unless those companies participate in a "universal opt-out" program operated by industry groups, like the Network Advertising Initiative, and overseen by the Federal Trade Commission. Boucher's draft proposal, by contrast, would require ad networks that track people and collect personal information for ad purposes to obtain users' opt-in consent unless the networks provide prominent notice through an icon and also allow people to view and edit their profiles. Rush's bill also defines third party broadly, saying that companies are considered third parties to each other if consumers wouldn't expect reasonably them to be related.
benton.org/node/39651 | MediaPost
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PAYWALLS AND EYEBALLS
[SOURCE: GigaOm, AUTHOR: Mathew Ingram]
[Commentary] The whole structure of a paywall appears to be aimed at keeping casual web visitors away from the newspaper's content. But, in reality, blocking casual readers -- who are seen as less valuable to advertisers because they don't spend as long on the site and aren't regular visitors -- is just one by-product of having a paywall. And even generating income from those readers by convincing them to sign up for a monthly subscription is only a by-product. For many newspapers, the main driving force for instituting a paywall is to keep print readers from migrating away from buying the physical product (which still generates the majority of advertising revenue at most newspapers) to reading for free online, where their eyeballs are worth less than they would be in print. Think of it as eyeball arbitrage. The problem with this strategy is that it is fundamentally a retrenchment approach — in other words, a fall-back rather than a move-forward strategy. While it may be true that keeping out casual web users and forcing regular readers to pay may improve online advertising revenue somewhat (since advertisers will perceive paying readers as more valuable than non-paying users), and putting up a wall may prevent some continuing slippage in print readers (although not as much as the paper probably hopes it will), it does little to grow the online side of the equation. Contrast that with the approach taken by The Guardian, which is making its content freely distributable through an open API. If anything, in fact, the paywall approach prevents further growth for an online entity because it puts a wall between the content and those who might help to spread it — in effect, marketing it to others — by linking to it, posting it on Twitter and other social networks, etc. It is fundamentally a resignation from the open web.
benton.org/node/39640 | GigaOm
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REWARD ME FOR PERSONAL DATA
[SOURCE: New York Times, AUTHOR: Steve Lohr]
On the Internet, users supply the raw material that helps generate billions of dollars a year in online advertising revenue. Search requests, individual profiles on social networks, Web browsing habits, posted pictures and many Internet messages are all mined to serve up targeted online ads. All of this personal information turns out to be extremely valuable, collectively. So why should Google, Yahoo, Facebook and other ad businesses get all the rewards? That is the question that animates Bynamite, a start-up company based in San Francisco. "There should be an economic opportunity on the consumer side," said Ginsu Yoon, a co-founder of the company. "Nearly all the investment and technology is on the advertising side." Bynamite, to be sure, is another entry in the emerging market for online privacy products. The business interest in such products, of course, is being fed by worries about how much personal information marketers collect. Also playing a part are recent outcries after Facebook changed its privacy practices and Google introduced a social networking tool, Buzz, that initially shared information widely without users' permission. Venture capital has been pouring into Web-based monitoring and privacy protection products like ReputationDefender and Abine, as well as services that help parents protect children's privacy online, like SafetyWeb and SocialShield. Bynamite brings a somewhat different perspective to the privacy market. "Our view is that it's not about privacy protection but about giving users control over this valuable resource — their information," Mr. Yoon said.
benton.org/node/39634 | New York Times
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DIGITAL BEATING HARDCOVER AT AMAZON
[SOURCE: ars technica, AUTHOR: Jacqui Cheng]
Perhaps this e-book thing is taking off after all: Kindle books are now outselling Amazon's hardcover books in the US. The company announced Monday that it has sold 143 Kindle books per 100 hardcover books over the last three months (it has sold 180 Kindle books per 100 hardcovers over the last month), and that's including the sales of hardcover books where there is no Kindle edition. Amazon also said that Kindle hardware sales had tripled since the company lowered the price from $259 to $189 just one month ago. Amazon CEO Jeff Bezos said that lowering the price was the tipping point to accelerate sales and eventually eclipse hardcovers, even though sales of hardcovers continue to grow. He added that this news is "astonishing when you consider that we've been selling hardcover books for 15 years, and Kindle books for 33 months."
benton.org/node/39652 | Ars Technica
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FAMILY GUY AND ABORTION
[SOURCE: New York Times, AUTHOR: Dave Itzkoff]
In many ways, the "Family Guy" episode "Partial Terms of Endearment" is typical of that audacious Fox animated comedy, teeming with rapid-fire jokes and willfully offensive non sequiturs about disabled animals, God, Nazis, bodily functions and the sexual habits of "Sesame Street" characters. It is also an episode in which a central character finds herself with an unwanted pregnancy and contemplates an abortion, a subject that is frankly discussed -- and flagrantly satirized -- by the cartoon's cast. The Fox network has said it will not broadcast "Partial Terms of Endearment," which was produced for the 2009-10 season. However, the home video arm of 20th Century Fox plans to release the episode as a stand-alone DVD in September, in packaging that plays up its polarizing qualities. When it does, many "Family Guy" fans will get their first look at an unlikely reminder of the television networks' aversion to the issue of abortion, and a rare boundary encountered by an often rebellious series.
benton.org/node/39661 | New York Times
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POLICYMAKERS

THE TECHNOCRACY BOOM
[SOURCE: New York Times, AUTHOR: David Brooks]
[Commentary] When historians look back on the period between 2001 and 2011, they will be amazed that a nation that professed to hate bureaucracy produced so much of it. When historians look back on this period, they will see it as another progressive era. It is not a liberal era — when government intervenes to seize wealth and power and distribute it to the have-nots. It's not a conservative era, when the governing class concedes that the world is too complicated to be managed from the center. It's a progressive era, based on the faith in government experts and their ability to use social science analysis to manage complex systems. This progressive era is being promulgated without much popular support. It's being led by a large class of educated professionals, who have been trained to do technocratic analysis, who believe that more analysis and rule-writing is the solution to social breakdowns, and who have constructed ever-expanding networks of offices, schools and contracts. Already this effort is generating a fierce, almost culture-war-style backlash. It is generating a backlash among people who do not have faith in Washington, who do not have faith that trained experts have superior abilities to organize society, who do not believe national rules can successfully contend with the intricacies of local contexts and cultures. This progressive era amounts to a high-stakes test. If the country remains safe and the health care and financial reforms work, then we will have witnessed a life-altering event. We'll have received powerful evidence that central regulations can successfully organize fast-moving information-age societies. If the reforms fail — if they kick off devastating unintended consequences or saddle the country with a maze of sclerotic regulations — then the popular backlash will be ferocious. Large sectors of the population will feel as if they were subjected to a doomed experiment they did not consent to. They will feel as if their country has been hijacked by a self-serving professional class mostly interested in providing for themselves.
benton.org/node/39662 | New York Times
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MORE ON MCLAUGHLIN
[SOURCE: Los Angeles Times, AUTHOR: Jennifer Martinez]
Andrew McLaughlin built Google's public policy operation and helped craft its government lobbying strategy. Now he works for the White House on Internet policy — and that has some Google rivals crying foul as federal officials prepare to rewrite the rules governing high-speed Internet. The so-called network neutrality rules expected to be issued by the Federal Communications Commission are seen as a boon to Google by limiting the ability of high-speed Internet service providers, such as phone and cable companies, to steer users to their own content. These Internet service providers complain that Google has a leg up when it comes to talking to the White House. They cite, among other things, records showing that McLaughlin used his personal e-mail account to communicate with former colleagues, including Google lobbyist Alan Davidson, about the administration's stance on net neutrality and other issues related to his work.
benton.org/node/39658 | Los Angeles Times
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PUSHING FOR DISCLOSURE ACT
[SOURCE: The Hill, AUTHOR: Russell Berman]
Advocates of campaign finance legislation are stepping up their pressure on Maine's Republican senators in the hopes of enacting the House-passed bill in time for the 2010 midterm elections. Sens. Olympia Snowe and Susan Collins have become the final hopes for backers of the legislation, who are battling a rapidly closing time window and the Senate's 60-vote threshold in their efforts to advance the bill before Congress leaves for its summer recess. While both Maine Republicans have voiced concerns about the bill, known as the Disclose Act, the advocates pointed to their longstanding support for tighter campaign finance regulations. "We have a really urgent need," a Republican former member of the Federal Elections Commission, Trevor Potter, said July 19 on a conference call held to urge Sens Snowe and Collins to support the legislation. Potter said he had "great respect" for both senators and was "particularly hopeful that they will take a leading role in passing the Disclose Act."
benton.org/node/39654 | Hill, The
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OWNERSHIP

INTEL AND FTC
[SOURCE: Financial Times, AUTHOR: Stephanie Kirchgaessner]
Intel, the US chipmaker, is close to settling a long-running antitrust suit with the Federal Trade Commission, bringing to a close a legal battle that has dogged the world's largest chipmaker for more than 10 years. The settlement will include concessions on its business practices, according to a person familiar with the deal, but will not include fines because the FTC does not have the authority to issue civil penalties. The FTC accused Intel of abusing its dominant position in the chip market over the past 10 years, including using tactics to dissuade customers from buying PC microprocessors (CPUs) from its main rival Advanced Micro Devices. The FTC also said Intel had blocked competition in the graphics chip market. Intel faced similar scrutiny in Europe, Japan and South Korea, and last year regulators in Brussels imposed a record €1.06bn ($1.44bn) fine on the company for breaking competition law.
benton.org/node/39657 | Financial Times
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The Technocracy Boom

[Commentary] When historians look back on the period between 2001 and 2011, they will be amazed that a nation that professed to hate bureaucracy produced so much of it. When historians look back on this period, they will see it as another progressive era.

It is not a liberal era — when government intervenes to seize wealth and power and distribute it to the have-nots. It's not a conservative era, when the governing class concedes that the world is too complicated to be managed from the center. It's a progressive era, based on the faith in government experts and their ability to use social science analysis to manage complex systems.

This progressive era is being promulgated without much popular support. It's being led by a large class of educated professionals, who have been trained to do technocratic analysis, who believe that more analysis and rule-writing is the solution to social breakdowns, and who have constructed ever-expanding networks of offices, schools and contracts. Already this effort is generating a fierce, almost culture-war-style backlash. It is generating a backlash among people who do not have faith in Washington, who do not have faith that trained experts have superior abilities to organize society, who do not believe national rules can successfully contend with the intricacies of local contexts and cultures.

This progressive era amounts to a high-stakes test. If the country remains safe and the health care and financial reforms work, then we will have witnessed a life-altering event. We'll have received powerful evidence that central regulations can successfully organize fast-moving information-age societies. If the reforms fail — if they kick off devastating unintended consequences or saddle the country with a maze of sclerotic regulations — then the popular backlash will be ferocious. Large sectors of the population will feel as if they were subjected to a doomed experiment they did not consent to. They will feel as if their country has been hijacked by a self-serving professional class mostly interested in providing for themselves.

Banned TV Episode Has Its Day on DVD

In many ways, the "Family Guy" episode "Partial Terms of Endearment" is typical of that audacious Fox animated comedy, teeming with rapid-fire jokes and willfully offensive non sequiturs about disabled animals, God, Nazis, bodily functions and the sexual habits of "Sesame Street" characters. It is also an episode in which a central character finds herself with an unwanted pregnancy and contemplates an abortion, a subject that is frankly discussed -- and flagrantly satirized -- by the cartoon's cast.

The Fox network has said it will not broadcast "Partial Terms of Endearment," which was produced for the 2009-10 season. However, the home video arm of 20th Century Fox plans to release the episode as a stand-alone DVD in September, in packaging that plays up its polarizing qualities. When it does, many "Family Guy" fans will get their first look at an unlikely reminder of the television networks' aversion to the issue of abortion, and a rare boundary encountered by an often rebellious series.