February 2012

Cybersecurity 2.0

[Commentary] Give Washington some credit: It looks as if politicians have learned it's not a good idea to destroy the Internet in order to save it.

Congress and the White House have considered dozens of bills over the past few years to address cybersecurity, chiefly how countries such as China and Russia are using the Web to access confidential information from companies and U.S. agencies. The original approach was to create a "kill switch" empowering regulators to turn off access to the Web. New legislation would instead break down silos between U.S. companies and intelligence agencies so that cyber attacks can be tracked and reported, raising prospects for identifying cyber spies. The Web has transformed many areas of life, now including a new cyber cold war. America's enemies need to be discovered and deterred. Making it possible for companies and intelligence agencies to share information more freely is a good first step, increasing transparency as a way of using the strength of the open Web as a tool in its own defense.

iPhone's Crutch of Subsidies

For Google, Europe's economic turmoil has had a silver lining: Smartphones that use the Internet giant's software are crushing the iPhone in countries hard hit by the continent's debt crisis.

Last year, despite Apple's high-profile launch of the new iPhone 4S, only 5% of the smartphones sold in Greece and 9% of those sold in Portugal were iPhones, according to research firm IDC. Most of the rest were phones running Google's Android operating system, which the company is promoting heavily as it seeks a firmer foothold in the wireless industry. The results point to a rare weak spot for Apple—its heavy reliance on subsidies from wireless carriers to make its iPhones affordable to a wider range of consumers. The practice has proved to be a big advantage for Apple, which posted a 73% jump in revenue in its latest quarter, at the expense of carriers such as Sprint Nextel, which started carrying the iPhone last fall but doesn't expect to make a profit on the device until 2015. In countries like the U.S. and the U.K., carrier subsidies helped the iPhone win more than 20% of the smartphone market last year. But its performance in parts of southern Europe where most consumers don't sign contracts and have to pay full freight for phones suggests Apple's position could suffer if carriers tire of underwriting most of the cost of the devices, as some are in countries such as Denmark and Spain.

Valley must join effort to stop UN from governing the Internet

[Commentary] It's Silicon Valley's worst nightmare: China and Russia want to turn control of the Internet over to the United Nations, according to Federal Communications Commission member Robert McDowell and other tech experts.

"It's a potential catastrophe," San Jose Rep. Zoe Lofgren proclaimed. "I've raised alarms about it, but nobody seems to be paying any attention. We're going to need the kind of outcry that occurred in SOPA (the Stop Online Piracy Act) and more to turn this around." The State Department's coordinator for international communications policy, Philip Verveer, downplayed the risk, calling it a "low-probability, high-consequence circumstance." "High consequence" gets our attention. Silicon Valley needs to pull out all of the stops to block a diplomatic disaster that could give despots and dictators power over the greatest open communication tool the world has ever known. The first task is to help the State Department apply the kind of pressure that spelled SOPA's demise. The proposed U.S. law to rein in copyright infringement would have harmed the Internet as a business and communication tool. The Internet now has 2 billion users and is adding millions more every week. Some tech experts believe that it will be next to impossible to maintain the status quo, given the extent of the issues. The goal of the Dubai conference should be to tweak the current regulations to alleviate legitimate international concerns while maintaining independence of the Internet. The United States won't be able to veto whatever emerges from Dubai, so it needs to be fully engaged in the game. Valley industry needs to speak up.

Support democracy in Hungary with new Radio Free Europe broadcasts

[Commentary] There are serious reasons for bringing back Radio Free Europe’s Hungarian broadcasts, which ended in 1993.

The first is the current demise of Hungarian media freedom, both the root and the finest fruit of all other liberties.
Second, one of the lessons of Europe’s last century is that broadcast monopolies by nationalist governments lead to international tensions and conflicts. Indeed, Orban’s anti-democratic measures could encourage politicians in nearby Slovakia and Romania to imitate his combination of anti-foreign sentiments and denial of free debate on public airwaves.
Third, given the similarities in recent Russian and Hungarian attacks on the United States, Hungary may well be the first ideological outpost of Putin’s constitutional dictatorship. Supporting the European Union’s repeated warnings about Hungary’s democracy deficit, Washington should take steps to counter emerging authoritarianism in Central Europe before it becomes a trend.

When it seemed that pluralistic democracy and a free market had taken root in Hungary, Radio Free Europe appeared to have fulfilled its mission. Now those values are officially deposed, and a legal system has been built to prevent their comeback even after the next elections. Restoring the Hungarian service could be a crucial step in promoting fair and decent values in Hungary, and in protecting democratic achievements elsewhere in Central and Eastern Europe.

[Mark Palmer was the U.S. ambassador to Hungary from 1986 to 1990. Miklos Haraszti, a Hungarian author, was the representative on freedom of the media for the Organization for Security and Cooperation in Europe from 2004 to 2010. Charles Gati is a professorial lecturer in Russian & Eurasian studies at Johns Hopkins University’s Nitze School of Advanced International Studies.]

Onward online privacy

[Commentary] Responding to a steady drumbeat of privacy violations online, the White House proposed a privacy bill of rights for Internet users that could give them more say over how personal information is collected and used. The initiative is a good starting point, as is a new effort by California Atty. Gen. Kamala Harris to require companies developing applications for smartphones and tablet computers to disclose their privacy policies. But they also highlight how tricky it is to set rules that guard sensitive personal information without hindering innovation or quickly becoming obsolete. Ultimately, however, a disclosure-based approach may strike the best balance. Federal law already provides safeguards for sensitive personal information, such as health and credit data. The Federal Trade Commission and California prosecutors have the power to crack down on companies that make misleading statements about their privacy policies. And pressure from users has forced companies such as Facebook and Google to be more protective of other types of personal information they collect. Like Harris' move, the White House initiative will not only give consumers a bit more control over their information, but also shine more light on what companies are doing with it so users can make better choices.

Obama's 'bill of rights' good start on Web privacy

[Commentary] The White House and California's attorney general are taking aim at a troubling topic: how to ensure consumer privacy on the Web while keeping an innovative industry thriving.

The first steps are partial but promising efforts to strike the right balance. One key issue worth watching in the privacy debate is the "Do Not Track" option. Tech firms such as Google, Mozilla and Microsoft favor giving users the opportunity to keep their online habits private via a Web page button. But the exact definition of tracking - and the lucrative ad revenues at stake - make it an elusive area to control completely. As President Obama noted in announcing his new policy, "We must reject the conclusion that privacy is an outmoded value." That's the right sentiment to voice at the start of a long process that aims to find firm answers.

Social media age shocker? On politics, newspapers get more respect.

A new survey of likely voters in the 2012 election confirms what many media watchers have been tracking for some time: trust in national media, particularly newer forms such as blogs and social media, is extremely low, hovering between six and 13 percent.

The most reliable source of election news, as gauged in this January survey of 1,000 cell and land-line phone respondents – are print newspapers, with 22 percent of respondents saying they are trustworthy. Broadcast and cable TV came in a close second, nestled right at 21 percent, while talk radio and Internet news sites ranked much lower. According to the report released and sponsored by the man behind craigslist, Craig Newmark himself, fewer than a quarter of those who took the time to answer questions felt that election news coverage was reliable.

Wireless Giants Converge on Barcelona

While all roads don't lead to Barcelona, Spain, ones that do are clogged with wireless-telecommunications executives.

Revenue-building strategies for mobile-phone operators, financial services in a mobile world and how to capture more of the connected consumer's time and money—these are just some of the topics likely to be front and center as 60,000 delegates from the telecom industry meet this week for the annual Mobile World Congress. The agenda-setting event—which kicks off in the Catalan city Monday and runs through Thursday—is where operators, cellphone manufacturers, content providers, advertising gurus and, increasingly, Internet players and other assorted members of the nearly $2 trillion wireless industry gather to assess the most-coveted devices, software, services and brands. Most companies at Mobile World Congress will be looking to explain one of two things—"why they haven't done as well as they thought, or what they will be doing differently in order to do better," says Neil Mawston, a telecom analyst at Strategy Analytics.

Mobile Operators Turn to Merger Lite as Watchdogs Stop Deals

Phone-company executives gathering at the Mobile World Congress in Barcelona this week will be looking for network-sharing deals to divvy up the costs of high- speed systems for bandwidth-hogging video and gaming services.

As data-hungry devices are unveiled at the industry’s biggest annual event, France Telecom SA, Vodafone Group Plc and Deutsche Telekom AG are among operators pushing agreements in markets hurt by the European debt crisis -- and increasingly in emerging economies -- to cut costs by sharing parts of their networks. The move is also one way to stem falling revenue and meet state-imposed coverage requirements. The unraveling of takeovers and mergers in the past two months, including a sale of T-Mobile USA and a combination of Vodafone’s Greek assets with a rival, highlight the need for European carriers to find ways to boost profitability as regulators from Washington to Brussels balk at consolidation. Spending by the region’s operators will shrink by a percentage point this year and next, falling to 14 percent of average sales in 2013, according to Fitch Ratings estimates.

Are you getting throttled into paying more for your wireless coverage?

The mobile intelligence company Validas recently looked into what kind of speeds people are getting on all these plans, specifically customers who use a lot of data. “So we took a look at the data usage of those top 5 percent for both tiered and unlimited plans on Verizon and AT&T,” says Dylan Breslin-Barnhart of Validas, “and interestingly what we found is for, especially for Verizon it was most remarkable that, ultimately, it doesn't matter if you're on tiered or unlimited, if you're in the top 5 percent bracket, you're using about the same amount of data.” But your experiences could be pretty different.

Validas found that customers on the unlimited plans were getting throttled, their data was moving slower than customers using the same amount of data on tiered plans. The tiered customers were enjoying a streaming episode of "Mad Men," everything’s great. The unlimited customers were getting buffering messages, hiccups, delays, they had no idea what Don Draper was up to. Why are the wireless carriers doing such a thing? “The argument that they're making is that the people on unlimited plans are data hogs,” says Mike Masnick, editor of Techdirt, “and are using way too much data and are causing congestion for everyone else.” But why is the network slow for some customers and not others? Masnick thinks the networks don’t want customers on unlimited plans at lower rates, they want everyone to be tiered. “Well, it appears that they have plenty of bandwidth,” he says, “and what they're really trying to do is push you into paying more money for the same thing.”

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