March 2011

Google’s Book Deal

[Commentary] Google’s ambitious proposal to scan, index and make available every book ever written promised a cultural revolution. Yet for all its promise, Judge Denny Chin of the United States District Court in Manhattan was right to strike down the plan last week, ruling that a settlement with the Authors Guild and publishers that would allow Google to put millions of books online without the explicit consent of their authors “would simply go too far.”

Google, like anybody else, is entitled to scan and post books that are in the public domain. As for new books, most publishers cut deals for Google to provide access to portions of their new titles and give readers an option to buy a digital copy. The settlement, signed in 2005 and revised in 2008, covered books in the middle, those out of print but still protected by copyright. Congress, meanwhile, can resolve the problem of orphan books. In 2008, it almost passed a bill that would allow anybody to digitize orphan works without fear of being sued for copyright infringement as long as they proved that they had tried to find the rights’ holder. This would give all comers similar legal protection to that which Google got in its agreement. Congress should approve this legislation. While it’s at it, it should consider promoting a nonprofit digital library, perhaps seeded with public dollars. The idea of a universal library available to all is too good to let go.

The FCC Muzzle

[Commentary] Congress tried and failed last year to limit corporate political speech in the wake of the Supreme Court's Citizens United decision, but the threat hasn't gone away. The new liberal hope is that the Federal Communications Commission will do the deed.

Liberal activists at the Media Access Project filed a petition last week asking the FCC to re-interpret decades of law to require that groups that run political ads disclose the names of their top donors. The 1934 Communications Act already requires any group paying for an ad—whether commercial or political—to disclose its identity as part of the ad. But liberals want President Obama's FCC to stretch this reading to require the on-air disclosure of any donor providing 25% or more of funding. (The petition is unclear whether that means funding for the ad or for the group.) They also want the FCC to require ad buyers to disclose in public records all financial backers who contribute more than 10% of their budget. The goal here is to use "transparency" to intimidate businesses out of making political donations. Disclosure sounds good, but liberals have begun to wield it as a weapon to vilify business donors. If Republicans can't stop the FCC from imposing backdoor restrictions on speech, they can make clear that partisan rule-making will jeopardize its funding.

Ad Industry Takes Another Look At 'Do Not Track' in Browsers

Big advertisers, ad agencies and ad networks are working with Internet-browser makers on a "do-not-track" system, a shift from the industry's previous skepticism about such a tool.

Major advertising-industry trade groups are talking to browser makers including Microsoft and Mozilla about how to make a do-not-track tool work, said Stu Ingis, the counsel for the Digital Advertising Alliance, which is involved in the discussions. A do-not-track tool would let Internet users indicate they don't want their online activity to be monitored. Microsoft and Mozilla have incorporated such features into their latest browsers, but the tools rely on ad networks and others to honor people's do-not-track requests. The advertising groups are now discussing how they will honor those messages, said Mr. Ingis. His organization is an alliance of seven major industry associations, including the Interactive Advertising Bureau, the Association of National Advertisers and the American Association of Advertising Agencies.

When the networks bubble over

[Commentary] A get-rich-quick atmosphere is enveloping Silicon Valley at the moment, with Wall Street investors competing to buy privately traded shares in social media companies such as Facebook, Twitter and their imitators.

It has a mysterious newcomer in Color, a photo-sharing application for mobile devices that has puzzled many users but which easily raised $41million – several times the usual amount – in its first funding round. As Color launched last week, the veteran investor Warren Buffett spoke out about social networks, declaring: “Most of them will be over-priced ... Some will be huge winners, which will make up for the rest.” Buffett has long shunned technology companies as having uncertain prospects compared with the insurance and food and drink companies he prefers, and he is right about the latest craze.

Cellphone Radiation May Alter Your Brain. Let’s Talk.

In a culture where people cradle their cellphones next to their heads with the same constancy and affection that toddlers hold their security blankets, it was unsettling last month when a study published in The Journal of the American Medical Association indicated that doing so could alter brain activity.

The report said it was unclear whether the changes in the brain — an increase in glucose metabolism after using the phone for less than an hour — had any negative health or behavioral effects. But it has many people wondering what they can do to protect themselves short of (gasp) using a landline. “Cellphones are fantastic and have done much to increase productivity,” said Dr. Nora Volkow, the lead investigator of the study and director of the National Institute of Drug Abuse at the National Institutes of Health. “I'd never tell people to stop using them entirely.” Yet, in light of her findings, she advises users to keep cellphones at a distance by putting them on speaker mode or using a wired headset whenever possible. The next best option is a wireless Bluetooth headset or earpiece, which emit radiation at far lower levels. If a headset isn't feasible, holding your phone just slightly away from your ear can make a big difference; the intensity of radiation diminishes sharply with distance. “Every millimeter counts,” said Louis Slesin, editor of Microwave News, an online newsletter covering health and safety issues related to exposure to electromagnetic radiation. So crushing your cellphone into your ear to hear better in a crowded bar is probably a bad idea.

House Republicans to FCC: Back off 'detrimental' spectrum policies

In letters to Federal Communications Commission Chairman Julius Genachowski, Rep Jo Bonner (R-AL) and Rep. Mike Rogers (R-AL) urge the FCC to shape policies so they don't threaten radio and TV broadcasters.

Rep Bonner wrote, "Americans should not lose reliable access to quality broadcast programming as a result of spectrum policies that could reduce the viewer reception of local stations." He has said he wants to see the wireless and broadcast industries both thrive, but members of Congress are questioning whether he really has the best interests of broadcasters in mind. "Millions of Americans rely on free over-the-air television as their primary source of news, information, and entertainment," wrote Rep Rogers." He said that although broadband adoption is important, "it is equally important that Americans continue to receive the benefits promised by the DTV transition."

FCC's Genachowski ducks Google 'Wi-Spy' questions

During a House Appropriations subcommittee hearing, Federal Communications Commission Chairman Julius Genachowski ducked questions on a possibly stalled investigation into a major consumer privacy breach by Google, refusing to give an update on the investigation.

Chairman Genachowski Testifies on FCC Budget

Testifying before the House Appropriations Committee, Federal Communications Commission Chairman Julius Genachowski said, "With limited resources, the FCC has been making significant progress toward fulfilling its Congressional mandate to ensure that all Americans have access to a robust communications infrastructure for a wide range of purposes - including public safety, personal communications, consumer services, medical care, business expansion, employment, and education."

He noted the work the FCC's Managing Director has done to "develop lean and flexible mechanisms and methodologies that make use of the resources that we already have first - before considering alternatives that might require additional financial resources." He outlined the work the FCC has done over the last year developing the National Broadband Plan, launching reform of the Universal Service Fund, identifying and freeing up spectrum for private sector use, spurring broadband deployment, protecting consumers, fostering public safety, and reforming agency operations.

The FCC is requesting a budget of $354,181,000 for fiscal year 2012. The FCC would continue to raise all of its funds through assessment of fees and permissible auction proceeds. Base funding increases are set at $2.5 million and programmatic initiatives are expected to cost $15.9 Million. Most of the base funding increase is for the Office of Inspector General. The requested budget includes $15.9 million in programmatic initiatives to: (1) finalize and support ongoing FCC-wide technology initiatives designed to improve efficiency and save costs; (2) implement specific components of the National Broadband Plan; (3) support the Commission's public safety role; (4) follow-through on studies necessary for finalizing a statutorily required report; and (5) upgrade and maintain services in the Office of Inspector General to combat fraud, waste, and abuse.

FTC Commissioner Rosch: Beware of Google, Facebook, Apple, Microsoft

Federal Trade Commission member J. Thomas Rosch said that he's concerned that four major Web platforms — Google, Facebook, Apple and Microsoft — could skew the Internet advertising market to the detriment of competitors and potential upstarts.

"We have to be careful about letting the current players manipulate the market in such a way that it does tip prematurely [in their favor] and that it hurts rivals," Rosch said after his talk at an antitrust conference held by the American Bar Association. Commissioner Rosch declined to say specifically what activities or potential activities worry him. But he singled out the four Web giants that he has his eye on, all trying to monetize their large audiences through advertising, albeit in different ways. "For example, Google is trying to do it though its search methods. Facebook is trying to do it though its huge population of friends," Commissioner Rosch said. "Apple's trying to do it though its app stores. Microsoft is trying to do it through its alliance with Facebook." "This is a pretty highly concentrated market, as far as I'm concerned," Commissioner Rosch added.

CBO Score Resolution to Disallow Network Neutrality Rules

The Congressional Budget Office has scored H.J. 37 which would disapprove the rule adopted by the Federal Communications Commission (FCC) on December 21, 2010, that is intended to preserve the Internet as an open network. Report and Order FCC 10-201 establishes rules that would bar broadband providers from blocking lawful content and discriminating in transmitting lawful traffic on the network. The rule also would require broadband providers to disclose to the public information about network management practices, performance, and terms of service.

H.J. Res. 37 would invoke a legislative process established by the Congressional Review Act (Public Law 104-121) to disapprove the open Internet rule. If H.J. Res. 37 is enacted, the published rule would have no force or effect. Based on information from the FCC, CBO estimates that voiding this rule would have no effect on the budget. Enacting H.J. Res. 37 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. H.J. Res. 37 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.

Benton

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