December 2010

Cellphone Marketers Plan Rules on Privacy

Facing growing public concern about privacy breaches, a lobby representing mobile-phone advertisers and publishers called for guidelines to better protect smartphone users from intrusive tracking technologies.

The Mobile Marketing Association said Dec 20 it would begin work on a "comprehensive set of mobile privacy guidelines" to help marketers and phone users navigate the rapidly changing landscape. "We need to create consistency so marketers know how to act and consumers know what to expect," said Greg Stuart, global chief executive of the MMA, which represents publishers, advertisers, developers of smartphone "apps" and telecom companies.

Movement to enable Web surfers to avoid tracking

As debate rages over the Federal Trade Commission's proposed privacy system for online consumers, a number of organizations are developing technological means of enabling surfers to exercise greater control over the information collected about their Internet behavior.

The regulatory plan and new tools come at a point of growing distress over the amount of data that marketing and tracking companies often surreptitiously collect about online activity, and the increasingly sophisticated technology they have for doing so. "Today, there's basically no practical choice that the average Internet user can make that would give them privacy online," said Peter Eckersley, a senior staff technologist for the Electronic Frontier Foundation, a privacy advocacy group in San Francisco. The efforts to change that fall into two main approaches, each with its own strengths and weakness from a user privacy perspective - and very different consequences for the online businesses that depend on advertising revenue.

Economy Remains Atop the News Agenda

The swift passage and signing of the landmark tax bill drove the economy to the No. 1 spot in the news agenda last week.

From December 12-19, the economy accounted for 26% of the newshole studied in the weekly news index of the Pew Research Center’s Project for Excellence in Journalism. That is somewhat less than the 40% focused on the economy the week before, but is consistent with recent weeks of intense media attention to the subject. More than any other issue, the tax bill drove last week’s economic coverage, accounting for about two-thirds of it. A mix of other items, including the omnibus spending bill, the debate over earmarks, and news about holiday retail sales, were factors, too. While the economy overshadowed all other stories, the No. 2 news event, according to PEJ’s weekly News Coverage Index, was a Virginia federal judge’s challenge to the U.S. health care law. For the first time in many months, the debate about health care policy reappeared, accounting for 5% of the newshole.

E-Mail Gets an Instant Makeover

Signs you’re an old fogey: You still watch movies on a VCR, listen to vinyl records and shoot photos on film. And you enjoy using e-mail.

Young people, of course, much prefer online chats and text messages. These have been on the rise for years but are now threatening to eclipse e-mail, much as they have already superseded phone calls. Major Internet companies like Facebook are responding with message services that are focused on immediate gratification. The problem with e-mail, young people say, is that it involves a boringly long process of signing into an account, typing out a subject line and then sending a message that might not be received or answered for hours. And sign-offs like “sincerely” — seriously?

India Leader Offers to Testify in Scandal Inquiry

Prime Minister Manmohan Singh offered Dec 20 to appear before a committee investigating a telecommunications scandal that has rocked India’s political establishment.

He rejected claims by opposition parties that he had been trying to avoid any questioning. “I wish to state categorically that I have nothing to hide from the public at large,” Prime Minister Singh said on the final day of a plenary session of the Indian National Congress Party. “As proof of my bona fides,” he said, he would appear before a government committee examining the scandal “if it chooses to ask me to do so.” The scandal has become a political crisis for the coalition government led by the Congress Party. Last week, the Supreme Court announced that it would monitor an investigation into the scandal by the leading law enforcement agency, the Central Bureau of Investigation. In recent days, the bureau’s officers have conducted raids across the country, and government agents are investigating allegations of money laundering and tax evasion. The scandal centers on the 2008 allocation of cellphone spectrum — the electromagnetic waves required to carry cellphone service — to private operators. Investigators are examining whether the telecommunications minister, who has since resigned, favored certain applicants and whether bribes and fiscal improprieties took place. A report by the government’s auditor general found many irregularities and concluded that the telecom ministry had sold the spectrum at deflated prices that cost the treasury as much as $39 billion. Many analysts say that estimate is probably too high.

Product Placement to Be Allowed in UK TV Programs

Product placement will be allowed in UK television programs for the first time from February, communications regulator Ofcom said, which will allow commercial broadcasters such as ITV PLC new sources of revenue.

Paid-for references for products and services will be permitted in TV programs from Feb. 28, according to Ofcom, which has also liberalized the rules on paid-for references to brands and products in radio programs. The TV rules reflect new UK legislation after the government's decision earlier this year to allow product placement in UK TV programs as a result of changes to European broadcasting legislation. Product placement will be allowed in films, TV series, entertainment shows and sports programs. But it will be prohibited in all children's and news programs and in UK-produced current affairs, consumer affairs and religious programs. The product placement of tobacco, alcohol, gambling, foods or drinks that are high in fat, salt or sugar, medicines and baby milk is banned by UK legislation. Ofcom has also prohibited the paid-for placement of products and services that can't be advertised on TV such as weapons or escort agencies. The rules state that product placement must not impair broadcasters' editorial independence and must always be editorially justified. This means that programs can't be created or distorted so that they become vehicles for the purposes of featuring product placement.

Brussels clears News Corp bid for BSkyB

European competition authorities announced on Dec 21 that they have unconditionally cleared News Corp’s proposed 800p-a-share bid for British Sky Broadcasting.

The clearance by the European Commission, taken solely on the fairly narrow grounds of competition means that the final say in the matter rests with to UK regulators whose department is overseen by Vince Cable, the UK business secretary. The commission’s merger authorities found that there were no anticompetitive implications in Rupert Murdoch’s global media company buying the 60.9 per cent of BSkyB that it does not already own. The commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it.

FCC’s New New Net Neutrality Compromise Is Better

The Federal Communications Commission will adopt a network neutrality order on Dec 21, but it will not publish the full text of those rules until a few days after its open meeting. Here's a preview.

The proposal has been tweaked since outlined by FCC Chairman Julius Genachowski three weeks ago. The rules will make the distinction that broadband is an access service as opposed to an information service. This is a subtle distinction, presumably designed to keep the FCC clear that it’s trying to regulate access to the web as opposed to the web itself. The FCC also will endeavor to apply that same standard — that broadband is the service that allows someone to go wherever they want on the web — to future forms of access. By regulating the access, the FCC hopes to address loopholes in the wireline net neutrality rules that will prevent Internet service providers from using their own managed services offered to subscribers to circumvent the idea of an open Internet. It’s also where the FCC will address issues of paid prioritization where an ISP might charge companies like Google for faster delivery of its content to the ISP’s end subscribers. Other protections in the order are a “robust transparency requirements for wireline and wireless networks,” and a rule preventing both wireless and wireline carriers from blocking websites. On the wireless side, the focus will be on preventing mobile operators from blocking services that compete with their own voice or video services, while the wireline rules seek to prevent the blocking of all lawful content. There will be a prohibition against “unreasonable discrimination” on wireline networks as well.

And since rules are only as good as their enforcement, the FCC is proposing that complaints on network neutrality issues will go through a faster decision-making period it calls the “Rocket Docket.” Complaints that are allowed to go through this process and be decided in 105 to 130 days after being accepted. The FCC will also have the power to set fines and order parties to stop violations of these rules.

FCC's Copps, Clyburn will not block network neutrality order

Federal Communications Commission members Michael Copps and Mignon Clyburn indicated Dec 20 that they will vote to approve Chairman Julius Genachowski's network neutrality order, a proposal they had fought hard to improve.

FCC Commissioner Copps on the proposed network neutrality order: "These past three weeks have been devoted on my part to intensive discussions about ensuring the continued openness of the Internet and putting consumers, not Big Phone and Big Cable, in maximum control of their online experiences. I have been fighting for nearly a decade to make sure the Internet doesn't travel down the same road of special interest consolidation and gate-keeper control that other media and telecommunications industries — radio, television, film and cable — have traveled. What an historic tragedy it would be to let that fate befall the dynamism of the Internet. The item we will vote on tomorrow is not the one I would have crafted. But I believe we have been able to make the current iteration better than what was originally circulated. If vigilantly and vigorously implemented by the Commission — and if upheld by the courts — it could represent an important milestone in the ongoing struggle to safeguard the awesome opportunity-creating power of the open Internet. While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward. I do thank the Chairman for his engagement, and I owe a special debt of gratitude to Commissioner Mignon Clyburn for her thoughtful and creative work to improve this item."

FCC Commissioner Clyburn on the proposed network neutrality order: "The open Internet is a crucial American marketplace, and I believe that it is appropriate for the FCC to safeguard it by adopting an Order that will establish clear rules to protect consumers' access. The Commission has worked tirelessly to offer a set of guidelines that, while not as strong as they could be, will nonetheless protect consumers as they explore, learn, and innovate online. As such, I plan to vote to approve in part and concur in part the Open Internet Order during the FCC's open meeting tomorrow. I appreciate the hard work of my colleagues, and I am especially grateful for the commitment and dedication of Commissioner Copps, who has worked many years on behalf of consumers to ensure an open Internet. I also want to thank the many stakeholders who have worked diligently on these issues and took the time to call, write, and visit me to convey their concerns. I am also grateful to Chairman Genachowski, his staff, and the many others at the Commission who worked around-the-clock on this proceeding. As a Commissioner whose task is to safeguard consumers and the public interest, I will continue to watch the growth of the Internet and will applaud industry advances and milestones. I will also seek out and facilitate any collaboration between myself, my colleagues, corporate stakeholders, and public interest representatives, as there can be no better path forward than that which is achieved through consensus."

Additional coverage:

FCC Is Set to Regulate Net Access (NYTimes)
http://www.nytimes.com/2010/12/21/business/media/21fcc.html?ref=todayspaper
'Net Neutrality' Rules Set to Pass (WSJ)
http://online.wsj.com/article/SB1000142405274870461090457603203356353143...
FCC set to enact new rules affecting Internet access (Washington Post)
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/20/AR201012...
US watchdog set to pass ‘net neutrality’ rule (Financial Times)
http://www.ft.com/cms/s/0/d9b028d8-0c90-11e0-a0a2-00144feabdc0.html
FCC poised to enact new broadband rules (San Jose Merc)
http://www.siliconvalley.com/ci_16906484
FCC set to adopt net neutrality rules (LA Times)
http://articles.latimes.com/2010/dec/20/business/la-fi-fcc-net-neutralit...
FCC Expected To OK 'Net Neutrality' Rules Today (NPR)
http://www.npr.org/blogs/thetwo-way/2010/12/21/132227839/fcc-expected-to...

Public Interest Community Disappointed with FCC

Network neutrality advocates reacted with great disappointment to the news that the Federal Communications Commission would approve an Open Internet order on December 21.

Gigi B. Sohn, president and co-founder of Public Knowledge, said, "The actions by the Federal Communications Commission fall far short of what they could have been. Instead of a rule that would protect everyone, from consumers to applications developers from predatory practices of telephone and cable companies, the Commission settled for much less. Instead of strong, firm rules providing clear protections, the Commission created a vague and shifting landscape open to interpretation. Consumers deserved better. The FCC should have fought for consumers, not put the burden on them to fight for their rights. Chairman Julius Genachowski was right when he said last year that there is one Internet, and it doesn't matter whether someone connects via a cord or through the air. His actions fell far short of his rhetoric. Under the rules the Chairman will bring to a vote tomorrow, those who go online with a wireless device will be at the mercy of the big telephone companies to practice whatever mischief they wish to get around the bare-bone approach the Commission took. Cell phones and smart phones are the fastest growing, and a major Internet onramp for poor Americans and people of color. We hope the Commission returns, as promised, to the wireless issue sooner rather than later, and will see the merit in offering equal protections for all users. The Commission protections for wired access to the Internet are stronger, but still suspect. While we believe the order has been somewhat strengthened from the Chairman’s original proposal, significant loopholes remain. That the FCC has left the door open for paid prioritization is distressing, and is contrary to everything that Chairman Genachowski has said about an open Internet. The notion that a deep-pocketed company, through paid prioritization, could pay to have its service moved ahead in the queue or transmitted faster than another is deeply troubling in a medium founded on the idea that everyone has a chance to reach someone else without interference from the carrier in the middle. There are other shortcomings in the FCC’s attempt to frame exactly with what service it is attempting to deal. In-the-weeds definitions of terms like “broadband Internet access” could lead to loopholes larger than the protections, and could nullify what the Commission said it wants to do. We thank Commissioners Michael Copps and Mignon Clyburn for their dedicated and diligent efforts to protect consumers and to keep the Internet open through their work on this order. We look forward to working with the FCC, our public-interest colleagues, and others in correcting the flaws in this order to make it provide the strong protections that everyone deserves."

Free Press Managing Director Craig Aaron said, “We are deeply disappointed that this Commission appears to be moving forward with deeply flawed rules that don't live up to the promises of the president or the FCC chairman to protect the free and open Internet. These rules appear to be flush with giant loopholes, and the FCC chairman seems far more concerned with winning the endorsement of AT&T and the cable lobbyists than with listening to the millions of Americans who have pleaded with him to fix his proposal. This short-sighted decision is all too familiar to those who have watched the Obama administration and its appointees squander the opportunity for real change in favor of industry-written compromises that reward the biggest players from Wall Street to health care and now the Internet. There is overwhelming public support for real Net Neutrality, and this setback won't stop those fighting to save the Internet."

Parul Desai, policy council for Consumers Union, praised the FCC for taking action, but said her group would continue to push for stricter controls. "From what we know, we would prefer that the commission provide stronger protections for wireless Internet users in addition to wireline users, as more Americans use smartphones and other wireless devices to surf the web," Desai said. "If these rules are actually going to protect consumers, the commission must be vigilant in monitoring Internet service providers to make sure they don't try to circumvent the rules and take unfair advantage of the FCC's definition of what constitutes broadband service," she added.

Mark Cooper, Director of Research at the Consumer Federation of America (CFA), said, “The network neutrality order could be an important milestone in ensuring that the Internet remains an open, consumer and citizen friendly place for communications and commerce. There are areas where stronger consumer protections are needed. CFA views the order as the platform on which those consumer protection can be built and we will work to ensure that consumers get those protections in the arenas where Internet policy is set. First, at the FCC, the order must be implemented and enforced in a way that guarantees the broadband Internet service available to the pubic achieves the primary goal of the Communications Act, which is to ensure that all Americans have access to ‘a rapid, efficient nationwide and worldwide wire and radio communications service with adequate facilities at reasonable charges.’ Second in Congress, we will support efforts to strengthen the consumer protections and oppose efforts to weaken them."

Andrew Jay Schwartzman, Senior Vice President and Policy Director of Media Access Project (MAP), said, "MAP respects and admires the work of Commissioners Michael Copps and Mignon Clyburn on this important issue, but MAP cannot support the watered-down, loophole-ridden option that the FCC appears to have chosen. The First Amendment values on which MAP was founded compel it to expect nothing less than a truly and fully open Internet, and the FCC’s vote will not preserve that. The inadequate protections for wireless technologies are especially troublesome, as wireless services provide an onramp to the Internet for many of the nation’s poor and minority citizens."