September 2011

By taking on AT&T merger, regulators take a stand for common sense

[Commentary] AT&T said its proposed acquisition of T-Mobile would be a boon for consumers. Government regulators aren't buying that line. That's a good thing, because the deal was bound to be a raw one for you and me. The Justice Department charged that the deal would illegally narrow competition in the wireless phone market. Of course, that's not how AT&T, T-Mobile and their allies have been pitching this deal.

They say the deal would help AT&T improve its service, a persistent complaint among its customers. It would allow the company to expand its next-generation data network so that it covered 97 percent of all Americans, instead of just 80 percent as it previously planned. That investment would lead to thousands of new jobs and even allow AT&T to bring call center jobs that had been offshored back to America. The acquisition would eliminate a competitor, AT&T and its allies acknowledged. But, they argued, many American consumers have a choice of five or more carriers in their local markets, so the change would barely be noticeable. Although it's true that there are plenty of small wireless carriers around, the four big wireless companies -- AT&T, Verizon, T-Mobile and Sprint -- control more than 90 percent of the national market. And should the deal go through, AT&T and Verizon combined would control nearly 80 percent of that market.

Amazon offers to build facilities in bid to end sales tax fight

Amazon is offering to build at least two distribution centers and hire as many as 7,000 workers if lawmakers back away — at least temporarily — from trying to force the Internet giant to collect sales taxes on purchases made by California customers.

The proposal, along with promises to invest as much as $500 million in the new facilities, was made in the form of draft legislation at a meeting between Amazon lobbyists and representatives of companies that belong to the California Retailers Association. The retailers trade group and other supporters of California's effort to collect more than $300 million a year in unpaid taxes on Internet sales dismissed the Amazon compromise as a ploy. "The so-called deal that Amazon has proposed is not serious," said Bill Dombrowski, president of the retailers group. Lenny Goldberg of the California Tax Reform Assn. called it "a totally cynical maneuver that's part of the game that they try to play in every state."

Google falters in its ad screening

[Commentary] In an agreement with the Justice Department, Google admits it knowingly allowed ads for prescription drugs from Canada to be targeted at US consumers. This slip of integrity – costing it $500 million in fines – raises questions about Google's culture.

For any business that carries ads, it’s easy to cross the fine line into illegal or unethical activity. A number of activists, for example, are trying to force Google to remove a smart phone app that is a virtual dogfighting game. Does the company want to promote cruelty to animals? For a company so astute in computer programs that it can locate information anywhere for consumers, Google needs to make sure it doesn't again cross that fine line. And for a company that is virtually everywhere, it’s too big to fail the integrity test.

Buying, Not Renting: Apple's Future TV Model

You used to be able to rent a single episode of some of your favorite TV shows via iTunes, and access them for a short period for your viewing pleasure. No longer: Apple, in what might seem like a surprising move, sliced the service, which it used to tout as one of iTunes' gems.

Now you have to actually buy an episode for $1.99, though you then own it forever on any device and can watch it over and over wherever. There's some evidence the TV networks themselves were uneasy with the $0.99 rental price but are happier with the $1.99 purchase price (implying users weren't watching many shows more than once--resulting in lower than expected revenues). But really this is all about the cloud, and how Apple's future in content providing will play out. The company just updated its Apple TV code so you can stream purchased TV content directly from Apple's server farms instead of having to download to your iPhone a show you've bought recently on your PC--it frees up your storage space lets you avoid having iTunes constantly open on your home PC.

Online push fails to reach 8.7 million Britons

The number of adults in the UK using the Internet has increased by just 500,000 in the past year, despite concerted government efforts to get more people online.

Some 8.73m Britons have never used the Internet, according to figures from the Office for National Statistics, a reduction from the 9.2m reported a year ago. Martha Lane Fox, co-founder of Lastminute.com, was named the government’s “digital champion” last year and has launched a campaign – Race Online 2012 – to get another 4m people using the Internet by next year. The government last year announced a £30m cash injection for the scheme, which will be distributed to UK online centers – a network of 3,500 community-based IT facilities.

Lane Fox said the figures showed how important it was for the network of 100,000 volunteers who have been recruited for the Race Online project to push forward Internet education. Meanwhile, Age UK has been running campaigns to get older people to go online. The charity said it had introduced 200,000 to the technology over the past few years. However, according to ONS figures, there are still about 5.7m people over the age of 65 who have never used the Internet.

Ofcom plans superfast wireless service

Ofcom, the UK telecoms regulator, is to announce plans for the first superfast wireless communication in Europe employing unused parts of the airwaves that had been reserved for television.

“White space” gaps in the spectrum will allow businesses and consumers to tap into the powerful signals normally used by broadcasters. The effect will be similar to a faster and more powerful version of the WiFi service common in many parts of the UK, leading to new applications and improved connections as well as the potential to extend broadband services to remote rural areas. Ed Richards, Ofcom chief executive, said: “We are hoping that white space develops in the same way as WiFi has in the UK. We have reached a point where companies can start developing services and applications. It offers much more capacity than WiFi in homes and offices, as well as significant use in extending broadband to rural areas.” Devices using this “white space” will not need a licence as long as there is no interference with existing users of the spectrum. Ofcom will also create a central database to help those devices find the right space to operate.

It is right to curtail web anonymity

[Commentary] One of the founding principles of the web – not only the technology but the culture that has grown up with it – is that, as the New Yorker cartoon once put it: “On the Internet, nobody knows you’re a dog.” The policy that people are free to interact online anonymously – or at least using pseudonyms – is now under attack from social networking companies. Both Faceboook and Google have cracked down on people trying to use pseudonyms rather than full identities. Anonymity should not be banned in every corner of the Internet any more than it is in the physical world in democracies – it would breach civil liberties. But there are good reasons to discourage it. Most users would gain if anonymity were the exception rather than the rule.