February 2012

[Commentary] The Federal Communications Commission’s (FCC) new cybersecurity initiative is so important and FCC Chairman Julius Genachowski’s speech is such a radical and welcome addition to the cybersecurity discussion.

The approach outlined by Chairman Genachowski, if followed, promises to address three key security weaknesses in the Internet in a way that actually works with the underlying principles that have made the Internet such a widespread success for everyone from the most unsophisticated end user to the most sophisticated tech giant: voluntary consensus, openness, and ease of use. By leveraging the strengths of the network to help overcome the vulnerabilities of the network, the FCC can do a lot to improve cybersecurity while simultaneously fulfilling its statutory mandates to protect consumers and promote broadband adoption and use. Chairman Genachowski radically departs from the usual Cybersecurity Establishment.

Here’s the money quote:
“It’s important to pause and note the relationship between the Internet’s success and these new threats. The potential harm of cyber attacks is so great because the Internet has become such a key platform for innovation, economic growth, and opportunity — delivering more and more value to people everywhere, every day.

So as stakeholders address the challenge of cybersecurity, it’s vital that we preserve the ingredients that have and will fuel the Internet’s growth and success. Specifically, it’s critical that we preserve Internet freedom and the open architecture of the Internet, which have been essential to the Internet’s success as an engine of innovation and economic growth.
Preserving the openness of the Internet is not a concern to be balanced with security risks, it is a guiding principle to be honored as we seek to address security challenges.

Privacy is a similarly important principle. There are some who suggest that we should compromise privacy to enhance online security. This too is a false choice. Privacy and security are complementary – both are essential to consumer confidence and adoption of broadband. We can and must improve online security while protecting individuals’ privacy.”

Despite globalization's deleterious effect on the U.S. textile, automotive, computer industries, for movies it's still very much America's world.

That's especially true in America itself, where a resistance to foreign film has been helped by Americans' dislike of subtitles and lack of familiarity with dubbing. Because investors don't expect foreign films to play well in the United States, still by far the world's largest and most important film market (China and Japan are vying for second place, but each brings in about one-tenth the combined U.S. and Canada box office), they don't get the same production and advertising budgets that Americans do. At the same time, broadcast television networks refuse to buy foreign-language products, leaving a crucial player in film financing absent when it comes to assembling the kind of multi-source deals that get most non-studio pictures made these days. Production values for American films are vastly superior to foreign ones, helped by budgets that can exceed $200 million (100 times the price of many foreign films, and at least 30 times the estimated $6 million-plus budget of Where Do We Go Now?) And the marketing costs of movies have swollen so that even if a foreign film is less expensive than an American one, it is almost impossible to find a wide audience for it in the United States without spending millions of dollars. There's a strange paradox at play here: While Hollywood films are losing audiences at home, where they're increasingly being siphoned away by social media, games, and the Internet, they're building them abroad. Revenues from American films outside North America constitute more than 60 percent of each year's take by the Hollywood studios, a number that's risen from under 40 percent several decades ago. Paramount Pictures, for instance, made $3.21 billion of its total $5.17 billion earnings in movie theaters for 2011 abroad. This is despite the fact that foreign-made films are gaining an increasing share of their own industries: Japanese are seeing more Japanese films than ever; so are Russians, Chinese, and Koreans. Box office is simply growing across the board in those countries.

[Commentary] Since state legislatures around the country have started their sessions in 2012, legislators and governors alike have been recognizing the importance of broadband (or high speed Internet) to growing state economies.

Governors in states as diverse as Hawaii, Maryland, Missouri, and Wyoming highlighted broadband initiatives in their state of the state speeches, as more and more of our leaders are realizing that without broadband, the U.S. economy is not going to produce jobs or the highly-skilled workers needed to compete in a global marketplace. Expanding broadband access is a serious challenge which will require all sectors to contribute — the private sector, the public sector, and the philanthropic sector. No player should be told to sit on the sidelines as we work toward adequate infrastructure for the 21st century. State legislatures can promote strong state economies by making sure that small businesses, school children and households — regardless of income, race, or rural location — have access to high speed broadband Internet.

USTelecom filed a Petition for Forbearance from Legacy Telecom Regulations, essentially telling the Federal Communications Commission that it’s time to wake up and smell the coffee—“many rules were adopted in a different era, long before the advent of broadband networks or the creation of the public Internet.” USTelecom’s petition reflects murmurings in the economic, academic and Big Telecom circles over the past few months that it might be time for a new regulatory regime as even the 96 Act is becoming less and less relevant with each new cord cutter and cross-platform conglomerate. The petition is also in line with the White House and Congress’ push to get the FCC to clean house, and “the Commission’s commitment to eliminate unnecessary regulatory requirements.”