February 2012

A Juggling Act for Obama in the Land of Big Wallets

Election years always bring with them tough balancing efforts for presidential candidates trying to stay on the good side of powerful constituencies. But few can come close to the high-wire act that President Obama must perform in the next two days as he seeks to soothe Hollywood, that longtime bastion of fund-raising dollars for Democrats, while not alienating the high-tech industry that has itself surged to the top of the Obama money list.

First, the soothing. President Obama is flying to Los Angeles to attend three fund-raisers, including one hosted by the actor Will Ferrell and Bradley Bell, a soap opera executive (“The Bold and the Beautiful”). The Foo Fighters will be on hand to perform; expect to see a number of other glitterati. Problem: President Obama is in the doghouse with the show-business people, who are mad because the White House didn’t support them on the antipiracy bill that got squashed in Congress in January after Google and other Internet high fliers descended on Washington to pressure the White House and Congress to oppose it in a standoff that left Hollywood reeling. But the president has also come to rely on cash from Hollywood, which contributed $9.2 million to his 2008 campaign coffers, according to the Center for Responsive Politics.

Apple's Size Clouds Market

In analyzing US corporate earnings and stock-market trends, apples-to-apples comparisons may now require tossing out the Apple.

Apple's success selling consumer gadgets has pushed its share price above $500, cementing its place as the U.S.'s largest company, with a market capitalization of $475 billion. But its gargantuan size is making it difficult for Wall Street to get a big-picture view of the earnings and margins for other American corporations. As a result, some equity analysts are cutting Apple out of the frame—and finding a dimmer outlook for the broader market.

Twitter stores full iPhone contact list for 18 months, after scan

Twitter has acknowledged that after mobile users tap the "Find friends" feature on its smartphone app, the company downloads users' entire address book, including names, email addresses and phone numbers, and keeps the data on its servers for 18 months.

The company also said it plans to update its apps to clarify that user contacts are being transmitted and stored. The company's current privacy policy does not explicitly disclose that Twitter downloads and stores user address books. It does say that Twitter users "may customize your account with information such as a cellphone number for the delivery of SMS messages or your address book so that we can help you find Twitter users you know." As with many online social services, Twitter allows users to look for friends that are also registered users. In the case of Twitter's iPhone app, users see a screen noting that the service will "Scan your Contacts for people you already know on Twitter." The short description of the feature does not mention that it also downloads every entry in the address book and stores it. Twitter's current privacy policy notes that some categories of "Log Data" are stored for up to 18 months.

FCC to get tougher on robocalls

The Federal Communications Commission is set to approve tougher rules giving consumers additional protection against unwanted autodialed or prerecorded calls to home phone lines.

"We have gotten thousands of complaints," says FCC Chairman Julius Genachowski. "Consumers were still getting robocalls they don't want and shouldn't get." He expects the commission to approve new rules that will require telemarketers to get written consent before making such calls. Even though Congress in 2008 passed legislation making Do Not Call permanent, some telemarketers have continued to make unsolicited calls because of loopholes in the law. Under the new FCC rules, telemarketers must get consent before calling home phones, even if the consumer hasn't included their number on the Do Not Call registry. Current rules already prohibit such calls to cellphones without consent.

Over-the-Top TV Numbers Rising

A new report suggests that TV watching via broadband is on the rise, while devices facilitating over-the-top viewing are gaining more traction.

Parks Associates found that 31% of homes with broadband regularly watch TV online. Meanwhile, nearly 13% of U.S. broadband homes have a device facilitating OTT, viewing such an Apple TV or Roku box. The research firm said holiday-season sales were robust, and it predicts 14 million units will be sold this year. Parks Associates reported during the 2011 holiday period that 4% of households bought "one of these inexpensive, single-function devices" that enable OTT consumption from "Internet-based services, such as Amazon Prime Instant Video and Netflix." And it's not just younger viewers who may engage in cord-cutting. Kurt Scherf, a vice president at Parks, stated: "Nearly 20% of these holiday-season buyers are over 45 years of age, so these devices have achieved relatively broad appeal among multiple consumer segments." He added: "While this trend does not yet frequently equate to canceling pay-TV services, it can mean shaving some premium channels for a set of households."

Google’s ‘antenna farm’ plans hint at TV service

If Google plans to draw customers to its ultrafast Internet service, it would help to bundle it with a cable-style TV package. And to get the necessary TV programming, it would likely need an “antenna farm” of commercial-sized satellite dishes to capture “The O’Reilly Factor,” “SportsCenter,” “Boardwalk Empire” and the rest of what people come to expect on their channel selections. To do that, Google would need a license from the Federal Communications Commission to set up a satellite receiving station. So news that Google applied to the FCC in December for such a license is now fueling speculation that the search king might bundle Internet and TV services in Kansas City.

Google vs. the World

[Commentary] Google is battling law enforcement in the U.S. and around the world on three different legal battlefronts: antitrust, privacy and property. Why is it only Google that is under serious law enforcement investigation for so many different serious infractions in so many countries around the world? According to a top Google lawyer, “Google’s leadership does not care terribly much about precedent or law” per Stephen Levy’s book In The Plex. That very rare scofflaw attitude, combined with the vast amount of evidence cataloged below, strongly suggests Google is not the innocent victim it claims to be, but a dominant perpetrator of systematic violations of law around the globe.

Only Google is battling law enforcement around the globe with the defiant stance that:

Google is not a search advertising monopoly and has no special obligations under antitrust law;
Google’s new privacy policy consolidation with no opt-out choice is not a monopoly “take-it-or-leave-it” ultimatum to users; and
Google’s not-so-subtle public threats to use Motorola’s essential standards patents to defend Android from non-standardized property rights claims of competitors is not anti-competitive.

Is Data Throttling a Necessary Evil for Cellphone Carriers?

Data throttling — slowing down the Internet connection of a customer who uses too much data — has become a common practice for cellphone carriers. Verizon, AT&T and T-Mobile all say they do it to some customers to keep their networks usable for everyone. But that does not mean throttling is the only and best solution.

Carriers could potentially create separate types of data plans for customers with specific types of use patterns. They could charge extra for these special plans, and in exchange give these customers priority in gaining access to the higher network speeds so they would get a consistently good connection when playing games or watching video. The rest of the customers on normal data plans would still be able to enjoy fast Internet speeds, stream the occasional video or play a game, and not be throttled either. This is just one potential alternative to data throttling proposed by Volubill, a London-based company that advises wireless companies on charging policies.

AT&T Must Give Shareholders a Vote on Network Neutrality, SEC Decides

The Securities and Exchange Commission told AT&T and other telecommunications companies they must include a resolution supporting wireless network neutrality in annual shareholder votes.

In a letter posted on the SEC website, the agency asserted that network neutrality -- the idea that Internet service providers must treat traffic equally -- has become a “significant policy consideration” and can no longer be excluded from shareholder ballots. AT&T, Verizon Communications and Sprint Nextel must now grant shareholder requests for votes this year on resolutions that would support network neutrality. The shareholder resolution would recommend each company “publicly commit to operate its wireless broadband network consistent with network neutrality principles,” the letter said. The companies should not discriminate based on the “source, ownership or destination” of data sent over their wireless infrastructure.

Flaw Found in an Online Encryption Method

A team of European and American mathematicians and cryptographers have discovered an unexpected weakness in the encryption system widely used worldwide for online shopping, banking, e-mail and other Internet services intended to remain private and secure.

The flaw — which involves a small but measurable number of cases — has to do with the way the system generates random numbers, which are used to make it practically impossible for an attacker to unscramble digital messages. While it can affect the transactions of individual Internet users, there is nothing an individual can do about it. The operators of large Web sites will need to make changes to ensure the security of their systems, the researchers said. The potential danger of the flaw is that despite the fact that the number of users affected by the flaw may be small, confidence in the security algorithm is reduced, the authors said.

Benton

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