February 2012

How Europe is dealing with online privacy

[Commentary] In Europe, the protection of personal data is a fundamental right. This right is clearly stated in the European Union Treaty and legislation. To make this right effective, people need to be in control of their own data. So, what will Europe’s proposed rules do?

First of all, people need to be informed about how their data will be used in clear and simple language: what data are collected, for what purposes and for how long they will be stored. People need to be able to make an informed decision about what to disclose, when and to whom.
Second, people have to give explicit consent before their personal data -- contact lists, photos or e-mails -- are used. Companies cannot use it for purposes other than what was agreed upon.
Third, people will have better control over their own data. They need to be able to access their own data, to easily take them to another provider or have them deleted if they no longer want them to be used. This is what I call the right to be forgotten. We want to clarify that people shall have the right -- and not only the "possibility" -- to withdraw their consent.
Finally, individuals must be swiftly informed when their personal data are lost, stolen or hacked. Online security breaches affect millions of people around the world. Companies must inform the data protection authorities and the people affected right away, preferably within 24 hours.

Web Deals Cheer Hollywood, Despite Drop in Moviegoers

Movie attendance hit a 16-year low in 2011. Star wattage continues to dim. DVD sales keep plunging. Almost none of the films honored at the Academy Awards have struck a mainstream nerve. Yet Hollywood has a noticeable spring in its step. After all, it’s not the music business.

Instead of Hollywood suffering its own Napster moment — the kind of digital death trap that decimated music labels first through the illegal downloading of files and then by a migration to legal downloads almost solely through iTunes — several deals announced this month have it feeling more in control. While studios still consider piracy a huge problem and feel stymied by Silicon Valley (and Washington politics), they nevertheless control their content. And now the Web is coming to them.

Blurred Line Between Espionage and Truth

Jake Tapper, the White House correspondent for ABC News, pointed out that the Administration had lauded brave reporting in distant lands more than once and then asked, “How does that square with the fact that this Administration has been so aggressively trying to stop aggressive journalism in the United States by using the Espionage Act to take whistle-blowers to court?”

He then suggested that the Administration seemed to believe that “the truth should come out abroad; it shouldn’t come out here.” Fair point. The Obama Administration, which promised during its transition to power that it would enhance “whistle-blower laws to protect federal workers,” has been more prone than any administration in history in trying to silence and prosecute federal workers. The Espionage Act, enacted back in 1917 to punish those who gave aid to our enemies, was used three times in all the prior administrations to bring cases against government officials accused of providing classified information to the media. It has been used six times since the current president took office.

NSA Chief Seeks Bigger Cybersecurity Role

The National Security Agency director and other intelligence officials have been making the case within the Obama Administration that the NSA should play a bigger role in protecting computer networks in the US, according to current and former US officials.

The proposals from Army Gen. Keith Alexander and others would expand the NSA's authority to allow it to block or pre-empt cyberattacks targeting entities within the US and to scan for cyberthreats but not monitor the content of communications, these officials said. Gen. Alexander and other intelligence officials have raised these proposals with top military and intelligence officials, as well as the White House, current and former US officials said. Gen. Alexander also commands the US Cyber Command. The proposals are controversial because they would expand NSA's power to monitor networks domestically, potentially raising concerns about protecting civil liberties. The warrantless surveillance program established by the NSA under President George W. Bush eventually was put under court supervision. In addition, pre-empting a cyberattack raises questions about whether that could be considered an act of war in cyberspace.

German Court Blocks Motorola’s iPhone Injunction

Motorola Mobility suffered a nasty setback for its ongoing patent battle with Apple when a German appeals court ruling temporarily blocked it from enforcing an injunction it won in December.

The Karlsruhe Higher Regional Court ruled that a standards-essential patent injunction that would have forced Apple to remove its iPhones and iPads from store shelves in Germany cannot be enforced during an appeal. The ruling was issued after the court reviewed the licensing terms Apple offered Motorola Mobility for the standards-essential patents at issue in the case. Those patents are governed by FRAND (fair, reasonable and nondiscriminatory) licensing terms and evidently the court felt Apple’s proposal to be reasonable. “At the current state of the proceedings … Motorola Mobility would violate its duties under antitrust rules if it continues to ask Apple to stop [iPhone and iPad] sales” the court said in a statement. In other words, that “maximum per-unit royalty of 2.25 percent” that Motorola has been seeking on every iPhone sale isn’t going to fly in Germany. And if Motorola continues to press for it, the company may invite antitrust scrutiny.

Online-Retail Spending at $200 Billion Annually and Growing

Americans spent more than $200 billion on online shopping in 2011 and are expected to spend $327 billion through Internet stores by 2016.

That’s the estimate from a report by Forrester Research analyst Sucharita Mulpuru, who also predicts that online sales will make up almost 9% of overall retail sales by 2016, up from 7% today. Driving much of that growth are the usual suspects: new Web-shopping converts and current online shoppers spending more. A majority of the U.S. population, 53%, bought something online in 2011. That figure should grow to 58% by 2016, Forrester said. Relatively recent innovations are also contributing to the rise of online retailing, Forrester said. Flash-sale sites such as Gilt Groupe, which sells heavily discounted luxury goods during sales that typically last for only a few days, have appealed to the frugal. Online-loyalty programs such as Amazon’s Prime shipping service have risen in popularity, with 12% of Web shoppers now belonging to one, up from 9% during the 2010 holiday season. And the rise of tablet computers such as Apple’s iPad have also helped, in part because the layout of tablet-optimized retailing websites spurs impulse purchases, Forrester said.

AT&T Plan Would Let App Makers Pay for Subscribers' Data Use

AT&T is preparing a service that would let content providers and developers of mobile applications pay the wireless carrier for the mobile data its customers use, the carrier's network and technology head John Donovan said. Donovan likened the service to toll-free calling for the mobile-broadband world. The move comes as carriers are hunting for new ways to make money on the rising data traffic on their networks, while mindful of limits on what consumers are willing to spend.

Here’s What’s Next for the Spectrum Auction

A Q&A with John Hane, a Washington communications attorney with the firm of Pillsbury Winthrop Shaw Pittman. As Hane sees it, the Federal Communications Commission's big job is to induce enough stations in the most densely populated areas to give up their spectrum for auction with the guarantee of a definite payoff — a payoff established by a preliminary reverse auction.

He also says that broadcasters who choose to hang on to their spectrum are protected to a certain extent by the safeguards that National Association of Broadcasters lobbyists had built into the authorizing language, especially a provision that says the FCC has only one shot at the TV spectrum. It will take years for a motivated FCC to conduct the necessary rulemakings and implement the auctions, he says. But each broadcaster needs to pay attention to what's going on as the auctions and attendant repacking will shake up the entire TV band. "If I can't outrun the bear, then I want to outrun the other guy. I want to get the best new assignment in my market," Hane says.

Waiting for the 'Twitter Election?' Keep Waiting

Barack Obama's much-hyped "youth quake," the young social-media army often credited with carrying him into the White House, the 2008 election was won by galvanizing an older population of Democrats and independents, many of whom had never used social media.

Even more recently, the wild inconsistency between Republican primary wins and social-media prowess has made the relative unimportance of social media in political campaigns all the more obvious (i.e. Internet heavyweight Ron Paul hasn't won a single primary). Ultimately, Facebook, Twitter and YouTube fans consist of reliable supporters, the growing demographic of nonvoting 20-somethings or opposition spectators. Despite the increasing importance of social media in business, there is no solid evidence that it matters in politics.

Comments, Questions, Concerns: RIAA CEO Reflects On Responses To His New York Times Op-Ed

I’d like to thank everyone who took the time to write comments in response to my op-ed in the New York Times on February 8th. I read them all (yes, really) and, not only were there many thoughtful and constructive comments, but the totality provided a diverse array of opinions that were interesting to consider and understand.

I obviously cannot respond to each of the many comments, but a number of common themes seemed to emerge from them, so I thought it might be useful to convey some thoughts in response.

Some comments reflect out-of-date criticisms about the entertainment industry’s transition to digital.
Some comments reflect a misunderstanding of the current marketplace.
A lot of comments focused on copyright itself, and the term of protection in particular.
Civic engagement online is wonderful.
A number of comments reiterated many of the complaints about the flaws in SOPA and PROTECT IP, as if the legislation were still viable.

Benton

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