November 2011

A new line of defense in cybersecurity, with help from the SEC

[Commentary] We have been in enough classified briefings over the years to know the details of the most significant threats to our national security and our way of life. One vulnerability in particular keeps us up at night: the state of our nation’s cybersecurity. The directors of national intelligence under President George W. Bush and President Obama have called cyberattack the greatest long-term threat to our nation. Adm. Mike Mullen, the former chairman of the Joint Chiefs of Staff, has put it even more starkly, saying that cyberattacks pose one of only two existential threats to the United States.

On Oct. 13, the Securities and Exchange Commission issued groundbreaking guidance to clarify companies’ disclosure obligations about material cybersecurity risks and events. Federal securities law has long required publicly traded companies to report “material” risks and events — that is, information that the average investor would want to know before making an investment decision. But before the SEC’s action, many companies were not aware how — or perhaps even if — this duty applied to cybersecurity information. In fact, a Senate Commerce Committee review of past corporate disclosures suggested that a significant number of companies have not reported these risks for years. Make no mistake: Our country is under cyberattack, and our national security and economic future are at severe risk. We believe that the SEC’s guidance — and the market-driven changes it will create in the way that the private sector considers risks — is a critical step toward improving U.S. cybersecurity.

'Nymwars' debate over online identity explodes

Who has the right to decide how you're known on the Internet -- you, or the online service you're using? That simmering question, which erupted with the launch of the new Google+ social network this summer, rolled into a boil this week with two high-profile developments.

First, Facebook decided to enforce its "real names only" policy against internationally known author Salman Rushdie, changing his page -- without his consent -- to the name on his passport, Ahmed. Next, the Justice Department told Congress that it needs the ability to prosecute people who provide false information to websites with the intent to harm others, stirring fears across cyberspace that people might be busted for lying about their weight and age on Match DOT com. The two unrelated events brought into full public view the "nymwars," the online debate known by its Twitter hashtag. The debate focuses on the notion that people online should have the freedom to choose how they want to identify themselves. Identity rights experts say the government is asking for too much power. The nymwars debate is even more important, they say, because Facebook, Google and Twitter are trying to become people's identity passports to the Internet, allowing people to use credentials from those services to sign on to hundreds of thousands of other sites and services. Twitter does allow people to use a pseudonym.

Facebook tracking now under federal investigation

Facebook tracking has become a perennial privacy issue, but this time, the Federal Trade Commission is involved. Last week, the FTC offered the social-network giant a settlement over a complaint that it had harmed users by changing privacy settings without warning. Under the settlement, Facebook would have to receive explicit permission from users before it shares any data collected under new terms – in essence, a repudiation of its hitherto standard of "opt-out" privacy changes. Now, users will need to "opt-in" to new changes.

Providing Internet Access to the Poor

Last June, Julius Genachowski, chairman of the Federal Communications Commission, issued a challenge to the audience at a cable industry conference in Chicago. “You’ve connected two-thirds of Americans to broadband, and I applaud you for that,” he said, “Now, let’s work together to connect the last third.” Later that night Chairman Genachowski had dinner with cable executives and, according to the FCC, asked them for help. They obliged.

On Nov. 9, the FCC announced “Connect to Compete,” a program designed to bring lower-income Americans online. In 2010, 31 percent of Americans lived in areas where broadband was available but chose not to pay for it. Of these, slightly more than a third cited cost of service and devices as the main reason. Now households with at least one child in the federal free school lunch program can buy broadband Internet access for $10 a month and relatively new, fast, refurbished computers for $150. (To qualify for free lunches, a family of four must have income below $29,055.) The commission estimates the program could reach between 15 million and 25 million Americans—and won’t cost taxpayers anything.

“We talked to every service provider under the sun,” says Josh Gottheimer, Genachowski’s senior counselor. “The cable industry decided to step up.” Given the reflexive intransigence the FCC often encounters with the companies it regulates, this was no mean feat. Fourteen cable providers, including Comcast, Cox Communications, and Time Warner Cable, will provide Internet access at well below market rates. There is a catch: That access is also well below market speeds. Typical introductory packages begin at 15 megabytes per second. The FCC has been reluctant to pin itself down to a definition of “broadband,” but in documents generally puts it at 4 mbps. For the discounted $10 rate, the cable companies offer 1 mbps, too slow for reliable video streaming or Internet telephone service, both of which compete with other cable industry products. “It’s not good for downloading movies, I give you that,” says Gottheimer, “but that’s not the ultimate goal of this program.” The FCC says it hopes people will use the Internet access to apply for jobs, do schoolwork, and use government Web sites. The speed is “not ideal,” he says but the program is “certainly a very important step and it’s going to help a lot of people.” The contracts will also waive installation, activation, and modem rental fees, which have been a significant barrier to entry for lower-income groups. The cable companies have committed to the offer through 2014.

Reps. Ask FCC to Make Web Site Info More Accessible ASAP

Rep. Cliff Stearns (R-FL), joined by Rep. Anna Eshoo (D-CA), both members of the House Communications Subcommittee (Rep Eshoo is ranking member), have asked the Federal Communications Commission not to wait for legislation before making changes to its Web site.

The Subcommittee passed a FCC reform bill that included a Stearns amendment requiring the FCC to provide direct access on its Web page to its annual budget, performance and accountability reports, appropriations and the number of employees. In a letter to the FCC Chairman Julius Genachowski the day after that vote, the pair said that they understood that the FCC already had that info on the Web site, by that it was difficult to locate. The FCC's redesigned Web site has drawn criticisms for being difficult to navigate by users inside and outside the FCC.

DHS Pushes D Block Legislation At House Hearing

The Department of Homeland Security had a message for House lawmakers: Give airwaves to public safety.

A DHS official testifying at a House hearing lobbied for the administration's stance on a public safety network for emergency responders, which has yet to win congressional approval. "The administration is fully committed to working with Congress to ensure the passage of legislation that meets the critical national need of establishing a public safety broadband network," Chris Essid, director of the emergency communications office at DHS, told a House Homeland Security subpanel. The push from DHS comes as spectrum legislation remains held up over this dispute. Legislation could still potentially move through the commerce committees or through the super committee if lawmakers manage to break through the D Block divide. That could be tough. Congressional Research Service telecom specialist Linda Moore, testifying at the hearing, pointed out the network dispute is rooted in disagreements on the role of government. "Bills that have been introduced in the 112th Congress show a great deal of cohesion about the need for a nationwide network and what type of support it should provide to public safety agencies, but little agreement about the roles that different federal agencies would play in the deployment and operation of the network," she said in written remarks.

House Judiciary To Mark Up Online Piracy Bill By Year's End

House Judiciary Chairman Lamar Smith (R-TX) said that he is planning to mark up controversial legislation before the end of the year that would crack down on piracy and counterfeiting on foreign websites.

During a hearing on Smith's Stop Online Piracy Act, Chairman Smith and other supporters of the legislation urged opponents of the bill to offer up concrete changes in writing instead of offering vague criticisms. A Google official testifying on behalf of coalition of tech firms including Facebook, eBay and Yahoo, said the bill as drafted is too broad and could snarl legitimate websites and stifle innovation and free speech. Chairman Smith wasn't overly optimistic that the committee would be getting much concrete input on changes that would address opponents' concerns. "They have too much self-interest," he said.

Self-Regulatory Group Taps FTC Official For Executive Director

The self-regulatory group Network Advertising Initiative has tapped Federal Trade Commission official Marc Groman to serve as executive director.

Groman replaces Charles Curran, who has held the position since April of 2009. Groman will start with the NAI in mid-December and will be based in Washington. Since launching 10 years ago, the NAI has operated a site for consumers who want to opt out of behavioral targeting by NAI members. But in the last year, the Digital Advertising Alliance -- a larger self-regulatory group that includes the major ad trade associations as well as the NAI -- started operating an opt-out page. The DAA has also drafted new self-regulatory principles and launched an enforcement program that has drawn praise from the FTC. Rob Gratchner, chairman of the NAI's Board, says Groman will help the organization develop a strategy for moving forward. Among other potential changes, Gratchner says the NAI under Groman's leadership could extend itself to privacy advocates to a greater extent than in the past.

Why One Click Has Turned Google’s News Strategy On Its Head

[Commentary] It’s the little things that catch your eye sometimes. To your average reader the almost microscopic adjustment to Google’s interface would barely register. It is literally a matter of an extra click. Where once you could move straight from the web search into a news search simply by selecting the different search function in the top bar, you now need to open the news channel and retype your search term. Well, you might argue, what is the harm in adding the extra three seconds it takes the average user to retype “Lady GaGa” and hit enter? My response would be: seconds matter. For a company that heralded the arrival of instant search with the news that they could shave two to five seconds of every search by bridging the gap between reading speed (30 milliseconds between glances at different areas of a page) and typing speed (300 milliseconds between keystrokes), this is a step backwards. Or at least a step forwards at a fractionally slower pace than usual.

Motorola Mobility Stockholders Approve Merger with Google

Motorola Mobility stockholders voted overwhelmingly to approve the proposed merger with Google. Approximately 99 percent of the shares voting at Nov 17’s Special Meeting of Stockholders voted in favor of the adoption of the merger agreement, which represented approximately 74 percent of Motorola Mobility’s total outstanding shares of common stock.