April 2011

Sprint would be ‘marginalised’ by AT&T deal

The chief executive of Sprint Nextel warned that the third-largest US mobile-phone carrier by revenues and subscribers could be “marginalised” if the proposed AT&T $39 billion acquisition of T-Mobile USA is allowed to proceed causing competition and innovation in the US mobile industry to suffer. Dan Hesse, who has emerged as the most vocal opponent of the AT&T/T-Mobile deal, added that without Sprint, the US would have lagged behind other countries in the global mobile industry.

Study questions federal spending on broadband

More coverage of a study commissioned by the National Cable & Telecommunications Association, an industry trade group, which concludes that the federal government, through the broadband stimulus program at the Department of Agriculture, is subsidizing some companies to compete against others that didn't receive subsidies.

The study evaluated projects in Kansas, Minnesota and Montana. "They were successful in getting Uncle Sam to subsidize them and make it cheaper to compete against their cable company competitors," said Jeffrey Eisenach, an author of the study who is an adjunct professor at George Mason University School of Law. One project is in Lake County, Minn., a remote county that borders Canada. Sponsored by the county government, the Lake County Fiber-Optic Telecommunications Project got $66.4 million in loans and grants. Initially, the project didn't receive funding because it didn't have enough customers. So officials expanded the project area to include two towns, Ely and Babbitt, in neighboring St. Louis County, according to project manager Jeff Roiland.
Midcontinent Communications already services the two towns, and officials at the company were surprised when the Lake County project entered their service area.

"Are customers getting a better deal?" asked Tom Simmons, the senior vice president of public policy at Midcontinent. "Is their ability to have a choice of providers worth the money the government spent?"

Jonathan Adelstein, the administrator for Rural Utilities Service, said the stimulus awards were fair and open, and they were for projects that lacked broadband for rural economic development.

House Republicans have questioned the program, noting that all of the awards had to be issued by Sept. 1, 2010, while the National Broadband Map, which charts broadband availability, wasn't published until this past February.

But Larry Sevier, CEO of Rural Telephone Service in Kansas, says the federal government was smart in allowing award recipients to create networks in some more-populated areas that already have service. The law allows the Rural Utilities Service to fund projects as long as 75% of the area lacks sufficient access to high-speed broadband to support rural economic development. His company received more than $100 million in grants and loans to bring broadband to unserved communities in northwestern Kansas. The company used some of the money to expand in Hays, which already had service providers. By establishing a presence in Hays, Sevier says, the company had access to a customer pool that will enable it to pay back its loans and reach communities without service. Ultimately, he added, broadband will enable young people to stay in rural areas.

Trying to Stir Up a Popular Protest in China, From a Bedroom in Manhattan

From a pair of computer screens in a lime green bedroom in Upper Manhattan, a 27-year-old man from China is working to bring about a popular uprising. Two months after calls shot across the Web for a Tunisian- and Egyptian-style “Jasmine Revolution” in China, he is among the few online dissidents still trying to promote a popular protest movement inside the country. The effort has failed to provoke any major street demonstrations, but it has led to a fierce crackdown by the authorities. Yet despite the widespread arrests of activists, including the well-known artist Ai Weiwei, many of those who began the grass-roots push for change remain active. They guard their anonymity closely, especially inside China, where they communicate using Gmail and Skype and broadcast messages to supporters beyond the country’s so-called Great Firewall of censorship.

Consultant to NY City Schools Stole Millions

Aided by lax oversight and by corporations that profited from his scheme, a former technology consultant stole $3.6 million over six years from the Department of Education to finance flashy cars and real estate speculation, federal authorities said.

The investigation revealed another embarrassing lack of supervision in one of New York City’s technology projects, just four months after federal authorities charged seven people in what they called an $80 million scheme to steal from CityTime, an automated payroll system that ballooned in cost to more than $700 million, nearly 10 times over budget. It also comes as the Education Department plans to invest more than half a billion dollars next year to upgrade Internet access in every school. As in the CityTime case, the charges revealed the enormous responsibilities and power given to technology consultants working on city projects. The former consultant, Willard Lanham, 58, surrendered to federal authorities on charges of mail fraud and theft from a billion-dollar school-wiring and Internet-access project financed partly by the federal government. Lanham, who was being paid $200,000 a year by the city, used layers of contractors and subcontractors to hide his scheme, and each of them profited a little from it, according to the federal complaint. He hired several people, including a brother, to work on the city contract, then billed another company for those hires, marking up the invoices. The company, for its part, charged Verizon or I.B.M., the two major vendors, more than what it had paid Mr. Lanham. According to a report by Richard J. Condon, a special investigator for the city schools, Verizon and IBM, in turn, billed the Education Department, also marking up the amounts. Verizon marked up the bills by $800,000, and I.B.M. by $400,000, said Condon’s report, which he had forwarded to the federal authorities. “IBM and Verizon, by their silence, facilitated this fraud,” the report said.

What 44 Billion Mobile App Downloads by 2016 Means

[Commentary] Think the mobile app economy is a passing fad? You might want to think again. ABI Research reported that an estimated 44 billion mobile applications will be downloaded within the next five years. By that time, the global population will be around 7 billion people, and while most of them won't have a smartphone, the math works out to more than six mobile app downloads for every man, woman and child on the planet!

We’re in the midst of migrating many activities from desktop to mobile computing and also from heavy, full-featured software to task-based computing. This task-based approach, and the large demand for apps that support it, underscore the challenge that new devices faces when entering the market. Specifically, I'm thinking of Research In Motion’s PlayBook, which has much to like in terms of interface, usability and design, but has few apps. HP will face the same challenge with its TouchPad when it arrives in the next few months, as will any MeeGo devices, if they arrive at all. Building a great device that’s easy to use isn't enough these days, nor will it be for the next several years. And although web apps can suffice in some cases, the promise of app-like features from HTML5 is still off in the distance.

Cable Company iPad Apps Are Killing It

Time Warner Cable's earnings call revealed that its iPad app was downloaded 360,000 times during its first month of availability. Cablevision revealed that it saw 50,000 downloads in the first five days of app availability, and Comcast shared that its Xfinity TV app has been downloaded more than 1.5 million times since its launch in November.

What’s the message? Cable subscribers are highly amenable to the idea of accessing content on their iPads. It’s also worth noting that Time Warner Cable lost only 65,000 subscribers this past quarter (and even gained subscribers in March, according to the Time Warner Cable CFO Robert Marcus), while it lost 155,000 during the quarter before that, and 141,000 two quarters ago. It’s probably too early to infer that the iPad app is the reason behind the decrease in subscriber bleed. But it’s worth considering that the iPad is a significant variable that’s been introduced only recently, and if these download numbers are any indication, it definitely seems to be a hit among cable subscribers.

Sources: Federal Trade Commission likely to lead any Google probe

The next antitrust probe of search giant Google — if there is one — would most likely be conducted by the Federal Trade Commission, knowledgeable sources told POLITICO.

Under a long-standing practice between the federal government’s two antitrust authorities, the FTC and the Department of Justice’s Antitrust Division alternate reviewing cases against Google. The FTC is next in line, the sources said. The DOJ earlier this month concluded a lengthy antitrust review of Google’s acquisition of travel software maker ITA, approving the deal with numerous conditions that will require ongoing review by the agency. The merger approval is still awaiting a green light from the courts. Meanwhile, some of Google’s business rivals, in addition to some public interest advocates, have been calling for a broader antitrust probe of Google. The Mountain View, Calif., company is under fire from Microsoft and other competitors — including smaller businesses — which accuse Google of leveraging its dominance in search and search advertising to favor its own products.

In tough economy, Hollywood stars make novel arguments for arts funding

Faced with proposed cuts to federal arts funding nationwide, some of Hollywood's biggest stars are adopting novel strategies for lobbying on behalf of the arts. “It’s not enough anymore, in this economy, for actors to just argue why arts funding benefits people,” actress Patricia Arquette said. “I came here to talk to Republicans about how the arts drive huge sectors of this country’s economy." Arquette is one of a handful of actors lobbying policymakers ahead of Saturday's White House Correspondents' Association Dinner, and her trip is part of a joint outreach by The Creative Coalition, one of the entertainment industry’s premiere advocacy groups.

Pleading Cycle Set for Review of AT&T's Acquisition of T-Mobile

On April 28, the Federal Communications Commission released a schedule for the public to comment on AT&T's proposed acquisition of T-Mobile. Petitions to Deny the merger are due Tuesday, May 31, 2011. Oppositions to those petitions are due Friday, June 10. Replies to those filings are due Monday, June 20.

To allow the FCC to consider fully all substantive issues regarding the Applications in as timely and efficient a manner as possible, petitioners and commenters should raise all issues in their initial filings. New issues may not be raised in responses or replies. A party or interested person seeking to raise a new issue after the pleading cycle has closed must show good cause why it was not possible for it to have raised the issue previously. Submissions after the pleading cycle has closed that seek to raise new issues based on new facts or newly discovered facts should be filed within 15 days after such facts are discovered. Absent such a showing of good cause, any issues not timely raised may be disregarded by the FCC.

FCC Probes Industry on USF Modernization

The Federal Communications Commission gathered key industry experts on April 27 to explore the different ways that the Universal Service Fund can be modernized to effectively deploy high speed broadband to rural America.

“The Universal Service Fund is at the heart of the Commission’s core mission,” said FCC Chairman Julius Genachowski at the start of the event. “The current system was largely successful in meeting the challenges of the 20th century challenges but cannot handle the needs of the 21st century; it does not work for broadband deployment.” Chairman Genachowski said that the current system disperses broadband funds inefficiently and wastefully. He went on to say that, the current system cannot provide long-term sustainable broadband deployment and reform is necessary.

“This is an issue with bipartisan support,” said Commissioner Robert McDowell. “It’s my hope that one day we won't need the USF because technology can bring affordable broadband to all Americans, but until then we need to work together to provide the necessary access.” Andrew Newell, General Counsel at Viaero Wireless, called wireless networks the best solution for bringing high-speed broadband to rural areas with minimal cost. David Russell, Solutions Marketing Director at Calix, agreed that wireless is a solution, but to support the wireless network, a fiber backbone needs to be deployed and consumers should be able to access this fiber when it comes close to their homes. Consumer Federation of America Research Director Mark Cooper and Park Region Mutual Telephone CEO Dave Bickett both echoed Russell’s statements on providing users with access to fiber where possible. “There is no doubt that mobile computing is more valuable than fixed computing,” said Cooper, “but there needs to be a shared infrastructure between wired and wireless to provide better access to consumers.”

Benton

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