December 2010

The FCC's Threat to Internet Freedom

[Commentary] Tomorrow morning the Federal Communications Commission (FCC) will mark the winter solstice by taking an unprecedented step to expand government's reach into the Internet by attempting to regulate its inner workings. In doing so, the agency will circumvent Congress and disregard a recent court ruling. Nothing is broken and needs fixing, however.

The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. To date, the FCC hasn't ruled out increasing its power further by using the phone monopoly laws, directly or indirectly regulating rates someday, or expanding its reach deeper into mobile broadband services. The most expansive regulatory regimes frequently started out modest and innocuous before incrementally growing into heavy-handed behemoths. On this winter solstice, we will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches of our government in the dogged pursuit of needless and harmful regulation. The darkest day of the year may end up marking the beginning of a long winter's night for Internet freedom.

Music Web Sites Dispute Legality of Their Closing

When federal authorities shut down five Web sites last month on suspicion of copyright infringement, they gave no warning and offered no details of their investigation, and they have not filed any criminal charges since. But after the seizure warrant used in the operation was released last week, the operators of several of the sites said in interviews that they were innocent of infringement, and criticized the investigation for misrepresenting how their sites worked.

In a 69-page affidavit seeking the warrant, an agent of Immigration and Customs Enforcement, the unit of the Department of Homeland Security that did the investigation, said the five sites — rapgodfathers.com, torrent-finder.com, rmx4u.com, dajaz1.com and onsmash.com — were used “to commit or facilitate criminal copyright infringement.” The agent also said the Motion Picture Association of America and the Recording Industry Association of America, the trade groups for the major film studios and record labels, had confirmed that the music and movies on the sites had not been released with the authorization of their copyright holders. Yet after being shown the affidavit, the operator of dajaz1.com — a widely read hip-hop blog that posts new songs and videos — disputed many of the warrant’s examples of what it called copyright infringement. He said that, like much of the material on his site, the songs had been sent to him for promotional purposes by record labels and the artists.

Tech Revival Lifts Silicon Valley

Silicon Valley is inching ahead of the rest of California, showing the best signs of life in the state's still-ailing $1.9 trillion economy.

Over the past six months, the unemployment rate in the technology-heavy Northern California region has eased more quickly than the rest of the state as local companies such as Brocade and Juniper Networks Inc. have ramped up hiring and expanded operations. Economists say Silicon Valley's revival is likely to have some spillover effects into other parts of the state's economy. A decade ago during the late 1990s tech boom, Silicon Valley's growth fueled a construction boom around the region and beyond as people moved to homes in the area to commute into the Valley.

It remains unlikely that the entire state -- which comprises many other sectors including agriculture -- can ride Silicon Valley's tech wave to a full recovery. California's economic problems are too big. Earlier this month, governor-elect Jerry Brown gave a grim assessment of the state's prospects, warning the budget shortfall over 19 months could be larger than expected at $28.1 billion instead of $25.4 billion.

Targeted TV Ads Set for Takeoff

After years of promises and false starts, TV commercials targeted at individual homes may finally be ready for prime time.

DirecTV is planning the biggest rollout yet of "addressable ads," allowing advertisers to reach close to 10 million homes with commercials tailored to each household. Dog owners, for instance, could see ads for dog food, not kitty litter, while families with children could be shown minivan spots. The satellite-TV service provider has struck a partnership with Starcom MediaVest, a unit of Publicis Groupe SA that buys ad time on behalf of heavyweight marketers such as Procter & Gamble Co. and Coca-Cola Co. Starcom has committed to spend $10 million to $20 million on the new service next year. Targeted TV ads are the latest manifestation of a fast-growing phenomenon: the gathering, repackaging and trading of personal data. Driving this move is the fact that targeted ads command much higher prices than regular ones. DirecTV plans to roll out its targeted ad service in August or September next year.

Google Delays TV-Set Offerings

Google is asking some TV-set makers to put off announcing hardware based on the Internet company's software, according to people briefed on Google's plans.

The move comes after the initial Google TV devices -- offered by Sony Corp. and Logitech International SA -- have run into negative reviews. Some content providers have also blocked their offerings from Google TV. Despite the challenges, some additional companies were expected to use the Consumer Electronics Show in Las Vegas in early January to show off new Google TV products. Samsung Electronics Co. still plans to do so, according to one person briefed on Google's plans. But some others, including Toshiba Corp., will not.

Online Ads Pull Ahead of Newspapers

This year, for the first time, advertisers will have spent more on Internet ads than on print newspaper ads, according to new estimates from eMarketer.

The digital-marketing research firm says U.S. spending on online ads will hit $25.8 billion, surpassing the $22.8 billion spent on print ads in newspapers. The eclipse has been on the horizon for years as consumers have migrated en masse to the Internet, where there are many more options for news, and where newspaper publishers can't charge nearly as much for ads as they can in print. So even while the total audience for many newspapers has grown, they have been unable to stem revenue declines.

Monitoring America

Nine years after the terrorist attacks of 2001, the United States is assembling a vast domestic intelligence apparatus to collect information about Americans, using the FBI, local police, state homeland security offices and military criminal investigators. The system, by far the largest and most technologically sophisticated in the nation's history, collects, stores and analyzes information about thousands of U.S. citizens and residents, many of whom have not been accused of any wrongdoing. The government's goal is to have every state and local law enforcement agency in the country feed information to Washington to buttress the work of the FBI, which is in charge of terrorism investigations in the United States. This story examines how Top Secret America plays out at the local level. It describes a web of 4,058 federal, state and local organizations, each with its own counterterrorism responsibilities and jurisdictions. At least 935 of these organizations have been created since the 2001 attacks or became involved in counterterrorism for the first time after 9/11.

Rep Rush on the lookout for Kevin Martin

Former Federal Communications Commission Chairman Kevin Martin did not do enough to enhance minority access to the Internet during his tenure leading the agency, Rep. Bobby Rush (D-IL) charged in a speech last week.

Rep Rush said the Republican chairman promised to make progress on minority issues but ultimately failed to deliver. "I talked to Kevin publicly and privately on numerous occasions, and I kept pressing him about what the Bush Administration would do to enhance minority participation in the development of broadband," Rep Rush said. "And you know what he kept telling me? He'd say, 'Bobby, I promise I'm going to include your concerns as part of my agenda.'" Rep Rush charged that minorities nevertheless did not increase their access to broadcasting licenses during Martin's tenure.

He also communicated that he's not letting Martin off the hook.

Facebook gearing up for privacy battles in next Congress

Facebook's Washington (DC) team is growing and moving to new offices.

But observers are quick to point out Facebook's team in D.C. is still tiny in comparison to tech stalwarts like Google and Intel, particularly with the increased congressional scrutiny on privacy issues and how social networks handle users' information. Most expect an increase in the firm's lobbying presence in an attempt to forestall any onerous privacy regulations. For its part Facebook insists it isn't in any hurry to add bodies in Washington; the company instead prefers to move deliberately and add employees individually to ensure they meet the company's unique culture. Right now the focus is on hiring a new manager of public policy to help spread Facebook's message to interested parties on the Hill.

Australian National Broadband Project Will Cost A$35.9 Billion

Australia’s national broadband network will cost A$35.9 billion ($35.4 billion) and will have 13 million customers by 2021.

Prime Minister Julia Gillard’s plan to bring high-speed Internet to some of Australia’s remotest corners drew fire ahead of the Aug. 21 general election for its cost. She clung to power by forming a minority government with independent lawmakers from rural regions who welcomed improved services.

The high-speed Internet service includes a non-binding agreement with Melbourne-based Telstra Corp., the nation’s biggest phone company, to shut down its copper wire network and transfer customers to NBN in exchange for A$11 billion in compensation. Telstra will hand over assets to NBN, which will build the nationwide network by 2018. The operator will then join rivals including Singapore Telecommunications Ltd.’s Optus in leasing infrastructure from the government. NBN will lay fiber optics to reach 93 percent of the population, with the rest of the nation served by wireless and satellite coverage. It is Australia’s biggest infrastructure project, a comparable size to the A$42 billion stimulus the government announced in February 2009.

Benton

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