September 2010

Google's Chief on Social, Mobile and Conflict

Lately, stories about Google often seem to be stories about conflict -- Google knocking heads with China or the Justice Department or Facebook. For Eric Schmidt, Google's chief executive, that is a good sign.

"This is winning," he said this week, speaking to a group of reporters at Google's Zeitgeist conference in Arizona. "If we were losing, we would not have these problems." Schmidt gave a few updates on those conflicts and rivalries, as well as some others. Expect to see social tools from Google this fall, he said, but do not expect a brand new social network. Instead, Google will add social components to its core products. He and other Google executives were not shy about needling Facebook for making it difficult for Google to import social information. Upon signing up for Facebook, people can import their Google contacts, but it does not work the other way around, Jonathan Rosenberg, senior vice president of product management, noted. "The best thing that would happen is Facebook would open up its network and we'd use that information to improve our ads and our search," Schmidt said. "Failing that, there are other ways in which we can get that information, which is what we're working on."

Google CEO responds to Texas antitrust concerns

Google chief executive Eric Schmidt denied his company's search engine deliberately favors its own products, claiming the results reflect users' preferences.

Earlier this month, Texas Attorney General Greg Abbott opened a probe into whether Google's search results unfairly disadvantage the competition in violation of federal antitrust laws. In a response published on the company's public policy blog, Google's deputy general counsel suggested the complaints are driven by the company's rivalry with Microsoft. Speaking to reporters at Google's Zeitgeist conference in Arizona this week, Schmidt said Google does not promise to treat all sites neutrally and its search rankings are based on which sites users prefer, regardless of who created the content.

Preparing for the APPocalypse

Borrell Associates forecasts that U.S. spending for ads delivered by mobile apps will explode from $305 million this year to $685 million next year and more than $8 billion by 2015 -- with $1.2 billion of that coming from local advertisers.

Almost 5 billion apps have been downloaded to mobile devices since Apple's App Store opened in 2008. Eighty percent of those have been free, but users have spent $1.5 billion on the rest. In Part II of Borrell's 2010 U.S. Local Mobile Advertising & Promotions Forecast, the firm estimates that about one in every five computing devices in the nation can receive mobile ad messages today. By 2015, that ratio will triple to three in every five, fueling much of the growth in mobile ad spending, and by then the line between "mobile devices" and personal computers will be practically irrelevant.

FCC Releases Meeting Agenda

The Federal Communications Commission will hold an Open Meeting on Thursday, September 23, 2010. Here's the agenda.

The FCC will consider:

1) a Second Memorandum Opinion and Order addressing 17 petitions for reconsideration of the rules adopted in this proceeding to make unused spectrum in the TV bands available for unlicensed broadband wireless devices while protecting incumbent services;

2) a Report and Order that improves connectivity for students and library patrons, and accelerates the National Broadband Plan's goal of affordable access to 1 gigabit per second broadband at community anchor institutions across the country, by upgrading, modernizing, and streamlining the E-Rate program;

3) a Second Report and Order that enables a more effective emergency response system by establishing a timeline and benchmarks for wireless carriers to provide more granular E911 location information at either a county-based or PSAP-based geographic level; and

4) a Further Notice of Proposed Rulemaking and Notice of Inquiry that seeks to improve E911 location accuracy and reliability for existing and new voice communication technologies, including Voice over Internet Protocol and, consistent with the National Broadband Plan, to understand the ways in which voice communications enabled by broadband and next generation 911 technologies could support enhanced first response.

Pom Files Suit Against FTC

The Federal Trade Commission has of late issued subpoenas and opened investigations of many marketers. But Pom Wonderful, makers of pomegranate juice, on Sept. 13 filed a lawsuit against the FTC, claiming the agency has created new regulations for the evaluation of deceptive advertising that squash the company's first-amendment rights.

According to Pom's legal filing, the FTC standard requires marketers to get approval from the U.S. Food & Drug Administration before making any claims about the health benefits of food, beverages or dietary supplements. "Until now, the FTC had regulated only 'deceptive' speech or advertising. The FTC never before required prior approval of advertising statements by any agency or the FDA. Invoking such a requirement, in effect, constitutes a ban on both deceptive speech and non-deceptive speech, the latter of which is protected by the first amendment," the complaint said. Pom's filing adds that the FTC's "new standard" and set of requirements to the food industry were "represented" to Pom and the food industry at large, not through the process of rule-making, but through two consent orders against Nestle USA and Iovate Health Sciences published in July. Nestle in the consent order agreed to drop allegedly deceptive advertising claims about the health benefits of its Boost Kid Essentials drink.

Cisco Video Chief: TV Must Get the 'Net

TV providers shouldn't fight the Internet -- they should embrace it.

That's one of the key messages Enrique Rodriguez, newly installed as senior vice president and general manager of Cisco Systems' Service Provider Video Technology Group, is delivering to the company's customers. "The No. 1 thing this industry needs to understand is, there's no way you can match the scale and the innovation of the Internet," Rodriguez said. To that end, Cisco's next generation of set-top boxes will be hybrids that are "more eloquent" in providing access to both digital-cable video services and Internet content and applications. "It's not just bringing the browser to the television," Rodriguez noted. "It's more than that." Along with the shift to Web-delivered applications on TV, devices will become smaller and more of the intelligence will move into the network, Rodriguez said. Meanwhile, cable headends will shift away from proprietary hardware platforms to more of a mix of special-purpose equipment and software running on commodity hardware. "It's going to be very interesting to see who is my competitor -- and who is my ally -- in the next few years. I wish I knew what it will look like," he said.

The Deep Dish on the FCC's Secret Pizza Party with Reporters

On Sept 14, Federal Communications Commission Chairman Julius Genachowski and key aides -- Chief of Staff Eddie Lazarus, Senior Counselor Josh Gottheimer, Chief Counsel and Senior Legal Advisor Rick Kaplan and agency spokeswoman Jen Howard -- had a pizza dinner with a select group of journalists.

Howard said the event was "the first in a series of informal chats with those who are on the FCC reporting beat." Officials declined to answer other questions about the event. A few journalists who attended said they didn't find the gathering particularly useful and that in typical form, the notoriously scripted Genachowski did not reveal anything substantive. While there were attempts to pepper the regulators with questions, one source panned the dinner as more akin to a "schmooze" than a news briefing.

You Can Soon Talk to 5 Billion People on a Mobile Phone

The number of worldwide mobile subscriptions is expected to cross the 5-billion-person threshold by the end of this month, equating to roughly 73.4 percent of the global population.

iSuppli, a market research firm, reported the numbers this morning and expects a near-75-percent mobile subscriber penetration rate before 2011 arrives. Such numbers are in line with the data offered earlier this week by Sir Tim-Berners Lee, who said, "80 percent of the world has access to a cellular data signal," so most of those that can subscribe, appear to do so. As a global milestone, the ramp-up to 5 billion mobile subscribers is huge when seen in comparison to the adoption of communications methods such as the telegraph and landline telephone. Data traffic on wireless networks surpassed voice communication in December 2009, so the next frontier is global Internet connectivity, which helps explain where the future growth is for telecom spending. iSuppli predicts $80.2 billion in wireless communications semiconductor spending by 2014, but carriers will surpass that investment.

Implementation of the Satellite Television Extension and Localism Act of 2010

Congress recently passed the Satellite Television Extension and Localism Act of 2010 (''STELA'') which was signed by the President on May 27, 2010. This legislation updated and reauthorized the distant signal license for satellite carriers and amended the local-into-local satellite license and the cable statutory license in several respects. The purpose of this Interim Rule is to account for the new statutory provisions.

Digital Performance Right in Sound Recordings and Ephemeral Recordings

The Copyright Royalty Judges are announcing their determination regarding the minimum fee to be paid by Noncommercial Webcasters under two statutory licenses, permitting certain digital performances of sound recordings and the making of ephemeral recordings, in response to an order of remand by the United States Court of Appeals for the District of Columbia Circuit.

The evidence presented in the remand proceeding supports a minimum fee of at least the same fee as adopted in the
Final Determination. SoundExchange has now presented evidence on administrative costs that exceed this minimum. The agreements entered pursuant to the Webcaster Settlement Acts of 2008 and 2009 support that the industry accepts this minimum fee, which has substantially been in place since the first webcasting proceeding. IBS' position seeks to pay no minimum fee and indeed seeks to pay no or an extremely small royalty for use of copyrighted content. The Judges adopt the same minimum fee for Noncommercial Webcasters as stated in the Final Determination of an annual non-refundable, but recoupable $500 minimum per annum per channel or station payable in advance