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February 2012

Oklahoma, Nevada Push for Public Safety Network Waivers

Officials from Oklahoma and Nevada asked the Federal Communications Commission to rule soon on their longstanding waiver requests to use 700 MHz broadband spectrum for public-safety LTE networks.

Funding for each system could be pulled if the FCC does not grant approval during the next month. In Oklahoma, the state is prepared to allocate $150 million for the deployment of a dedicated LTE network for first responders and has selected Alcatel-Lucent as its primary vendor for the project. However, this funding is “at risk” if the FCC does not confirm that Oklahoma can use the 700 MHz spectrum, according to Alex Pettit, the state's chief information officer. Nevada’s 700 MHz waiver request is in a similar situation — it was filed almost two years and also faces a funding deadline, according to state officials.

2012 Is the Year of the Virtual Protest

With the Susan G. Komen for the Cure Foundation backing off of its decision to rescind funding from Planned Parenthood and the halting of SOPA last month, 2012 is turning out to be the year of the virtual protester.

After Komen made its announcement, a bunch of blog posts, tweets, and hacks helped push the cancer awareness organization to revise its position. Before social media evangelists celebrate another victory, it's worth noting that this isn't just the result of the new Internet-empowered class, but also an indication that entrenched public relations pros are scrambling to manage a new medium and a news cycle that moves faster than ever before. The year of the virtual protest has only just begun. We can see the Internet push-back followed by corporate fumbling everywhere, from Verizon Wireless' and Bank of America's reversals on new fees to the Kayak and Lowe's All American Muslim controversy. As the year goes on, we're sure to see more examples emerge. And as the Internet landscape keeps changing every day, we don't expect the PR establishment to catch up anytime soon.

With 8.7% market share, Apple has 75% of cell phone profits

As the iPhone's share of the market in terms of units shipped has grown from 3% in second quarter of 2010 to 8.7% last quarter, Apple's share of the profits has swelled from 39% to 75%. Only five of the top eight cellphone manufacturers are seeing any kind of profit at all in mobile telephony. Samsung, with a 16% profit share, comes closest to Apple. Nokia, Research in Motion, and HTC are just scraping by. Motorola, LG and Sony, which bought out Ericsson last month, are still in the red.

Cox Communications hangs up its wireless biz

Atlanta-based Cox Communications will ax more than 100 jobs as it shutters its wireless unit next month, according to a source. The affected jobs included engineers, product development managers, and infrastructure designers. Cox announced plans to jettison its cell phone service about a year after launching it, bested by more entrenched and larger wireless companies.

US government, military to get secure Android phones

Some US officials this year are expected to get smartphones capable of handling classified government documents over cellular networks, according to people involved in the project.

The phones will run a modified version of Google's Android software, which is being developed as part of an initiative that spans multiple federal agencies and government contractors, these people said. The smartphones are first being deployed to U.S. soldiers, people familiar with the project said. Later, federal agencies are expected to get phones for sending and receiving government cables while away from their offices, sources said. Eventually, local governments and corporations could give workers phones with similar software. The Army has been testing touchscreen devices at U.S. bases for nearly two years, said Michael McCarthy, a director for the Army's Brigade Modernization Command, in a phone interview. About 40 phones were sent to fighters overseas a year ago, and the Army plans to ship 50 more phones and 75 tablets to soldiers abroad in March, he said.

Auction 901 Stakes are High for Rural Wireless Companies

[Commentary] Rural wireless carriers, it is time to dust off your auction strategy playbook (and maybe your chief auction strategist too) because Auction 901, the Federal Communications Commission’s very first reverse auction, is coming at you on September 27, 2012.

Though that seems like a long way away, any wireless carriers interested in grabbing a slice of the $300m Mobility Fund Phase I support would be wise to start planning now, as the FCC is proposing a variety of rules and procedures for these auctions that will require considerable scrutiny. Although winning Mobility Fund Phase I support could be a tremendous benefit for some small wireless carriers, the proposed rules appear chock-full of restrictions, requirements, and various pitfalls. The stakes are indeed high. By winning, rural wireless carriers could expand their footprint, obtain a competitive advantage in a new or existing service area, and gain valuable insight and experience to utilize in future reverse auctions. However, in order to play, small carriers quite literally have to “bet the farm,” have access to sufficient spectrum, and comply with a host of not-yet solidified rules, requirements and obligations. Finally, losing the auction could mean a competitor will gain the advantages mentioned above and potentially get USF support for an area you may have planned to deploy service.

Who really benefits from putting high-tech gadgets in classrooms?

[Commentary] Something sounded familiar last week when I heard U.S. Education Secretary Arne Duncan and FCC Chairman Julius Genachowski make a huge pitch for infusing digital technology into America's classrooms. Every schoolchild should have a laptop, they said. Because in the near future, textbooks will be a thing of the past. Where had I heard that before? So I did a bit of research, and found it. The quote I recalled was, "Books will soon be obsolete in the schools.... Our school system will be completely changed in 10 years." The revolutionary technology being heralded in that statement wasn't the Internet or the laptop, but the motion picture. The year was 1913, and the speaker, Thomas Edison, was referring to the prospect of replacing book learning with instruction via the moving image.

He was talking through his hat then, every bit as much as Sec Duncan and Chairman Genachowski are talking through theirs now. There's certainly an important role for technology in the classroom. And the U.S. won't benefit if students in poor neighborhoods fall further behind their middle-class or affluent peers in access to broadband Internet connectivity or computers. But mindless servility to technology for its own sake, which is what Duncan and Genachowski are promoting on behalf of self-interested companies like Apple, will make things worse, not better. That's because it distracts from and sucks money away from the most important goal, which is maintaining good teaching practices and employing good teachers in the classroom. What's scary about the recent presentation by Duncan and Genachowski is that it shows that for all their supposed experience and expertise, they've bought snake oil. They're simply trying to rebottle it for us as the elixir of the gods.

AT&T & Dish fight over spectrum, but will either build a network?

Report after report points to AT&T marrying Dish Network after Ma Bell’s forced breakup with T-Mobile, but given the companies’ increasing belligerence, you wouldn’t think that was the case.

AT&T is petitioning the Federal Communications Commission to impose network buildout conditions on Dish’s satellite spectrum –- requirements that would be passed onto AT&T if it acquired the satellite TV provider. Meanwhile, Dish insists it plans to use that spectrum to build a commercial LTE network to challenge the reigning nationwide mobile operators, including AT&T. These are hardly the actions of two companies about to tie the knot. What we’re witnessing here is some very cynical pre-nuptial gamesmanship. According to TMF Associates satellite communications analyst Tim Farrar, Dish is playing AT&T off its competitors by threatening to partner with MetroPCS to build a nationwide LTE network over its satellite broadband and 700 MHz spectrum. To muck up Dish’s plans, AT&T is insisting to the FCC that the satellite TV provider face the same strict rollout requirements the commission imposed on fellow satellite spectrum holder LightSquared: An LTE rollout covering 100 million people in 33 months and 260 million in less than 6 years.

Commerce Spectrum Management Advisory Committee Meeting

National Telecommunications and Information Administration
March 1, 2012
9 a.m. to 12 p.m. Pacific Standard Time
Stanford Institute for Economic Policy Research
http://www.gpo.gov/fdsys/pkg/FR-2012-02-03/pdf/2012-2468.pdf

The Committee will deliberate on the findings and recommendations from its four subcommittees (Search for 500 MHz, Spectrum Sharing, Spectrum Management Improvements, and Unlicensed), and identify future requirements for assessments. NTIA will post a detailed agenda on its Web site, http://www.ntia.doc.gov, prior to the meeting. There also will be an opportunity for public comment at the meeting.


February 3, 2012 (Google's Privacy meeting)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for FEBRUARY 3, 2012

Two events today -- Tribal Telecom 2012 and 550 Challenge: World Borderless by February 3, 2018 http://benton.org/calendar/2012-02-03/


PRIVACY
   Google isn't being 'forthcoming' with Congress on privacy
   Facebook shows how privacy is passé - analysis
   Post-IPO, Facebook will have to make privacy investigations public - analysis
   Who Does Google Think You Are?

CONTENT
   SOPA 2.0? Progressive Group Targets Data Retention Bill
   Beyond ACTA: next secret copyright agreement negotiated this week -- in Hollywood
   Megaupload data safe for now
   EFF ready to sue if "innocent customers" can't get Megaupload data back [links to web]
   Michigan man charged with illegally streaming sports games

MORE ON FACEBOOK
   Six interesting technology law issues raised in the Facebook IPO - analysis
   Soon Facebook Growth Will Be About Users Clocking In More Time
   What Is Facebook's Business? - analysis
   3 Things That Will Change After Facebook's IPO, And 2 Things That Won't - analysis
   Facebook Fascination on Social Media - research
   What a Facebook IPO means for Silicon Valley - analysis [links to web]
   Facebook and Zynga’s co-dependent relationship - analysis [links to web]
   Silicon Valley Rep congratulates Facebook, promises to keep pressure up on privacy [links to web]
   Zuckerberg Remains the Undisputed Boss at Facebook
   Facebook's $100 Billion Question
   Advertisers' Free Ride May End On Facebook
   Facebook filing flags privacy risks
   Facebook ought to ditch its public offering - editorial

WIRELESS/SPECTRUM
   FCC Working on Device Interoperability Rules, Girding for Another Battle With Verizon, AT&T
   Spectrum Auctions and Lessons Learned - press release
   AT&T Takes Top Spot as Sprint, T-Mobile Fall in Mobile Phone Customer Service Survey - press release [links to web]
   4G phones mean more customer service calls, says JD Power [links to web]
   Convention city wants OK for safety network
   Google Beefs Up Security on Its Android Market
   Mobility Fund Auction
   Verizon’s cable spectrum mash up: Evil genius or simply genius? - analysis

TELEVISION
   FCC Clears Time Warner Cable Takeover of Insight [links to web]
   Comcast CEO looking to expand global reach [links to web]
   Super Bowl Ad Rates Can Double Within Ten Years [links to web]
   A Super Bowl ad to rile abortion politics

MEDIA & ELECTIONS
   Media execs, companies gave more than $350,000 to conservative super PACs
   Gingrich Campaign Continues Media Bashing to Solicit Bucks [links to web]

TELECOM
   FCC Inquires and Complaints Rise More than 10% in 3Q [links to web]

CYBERSECURITY
   Is Cybersecurity as Important as Border Security?
   Commerce Department agency’s network may have been hacked [links to web]

FCC REFORM
   Telecom group backs FCC reform bills
   NAB, NCTA Back FCC Reform Bills

GOVERNMENT & COMMUNICATIONS
   House to live-stream committee proceedings

POLICYMAKERS
   Gurin Leaving FCC - press release
   South Carolina PSC’s Randy Mitchell Added to Federal-State Joint Board on Universal Service [links to web]

COMPANY NEWS
   The trials of Uber [links to web]
   Soros-backed wireless startup faces big test at Super Bowl [links to web]

MORE ONLINE
   BT set to launch ‘ultrafast’ internet [links to web]
   Rethinking the soul as the ’Net becomes more lifelike - analysis [links to web]
   Jeff Tedford admits Cal needs to step up in social media era of recruiting [links to web]

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PRIVACY

GOOGLE’S PRIVACY MEETING
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
House lawmakers grilled Google officials for two hours about the company's recent privacy changes, but Rep. Mary Bono Mack (R-CA) said she wasn't satisfied with their answers. Pablo Chavez, Google's director of public policy, and Michael Yang, a Google senior counsel, answered questions from House Commerce Committee lawmakers, including Reps. Henry Waxman (D-CA), Joe Barton (R-TX), G.K. Butterfield (D-NC) and Marsha Blackburn (R-TN). "At the end of the day, I don't think their answers to us were very forthcoming necessarily in what this really means for the safety of our families and our children," Rep Bono Mack told reporters after the closed-door briefing.
"By being more simple, [the privacy policy] is actually more complicated," Rep Bono Mack said. She said the Google officials gave lawmakers a "thorough walkthrough of the technology that exists" to control privacy settings, but that she remains concerned about users' ability to control the information they share with Google. "The concern of Congress is how much active participation does a user have to do to protect their own privacy," she said. Rep Butterfield emphasized he wants Google to provide a "one-stop" site where users can opt out of tracking across the company's platforms. Google's officials did not fully explain whether users can delete data that the company has collected about them and how long the company keeps the data, Rep Bono Mack said. When asked what she thinks lawmakers should do, she said Congress might not be the answer. But she suggested users might switch to new services "if Google goes too far." Rep Bono Mack said she plans to hold more hearings on privacy issues this year, some of which could focus specifically on Google's changes. "There's a growing angst in the Congress about privacy — there's no question," she said.
benton.org/node/112278 | Hill, The | National Journal | Washington Post
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PRIVACY IS PASSE
[SOURCE: Los Angeles Times, AUTHOR: David Lazarus]
[Commentary] Welcome to the post-privacy era. What's most striking about Facebook's initial public offering isn't that it values the 8-year-old company at up to $100 billion, or that this will be the biggest-ever IPO for an Internet firm. What's most striking is that Facebook is serving up to investors the prospect of 845 million users (read: consumers) worldwide being a captive market for businesses looking to sell them stuff. And in a twist that would have been unimaginable before social media took the Net by storm, we've become willing partners in the devaluing of our privacy. It's not just that we no longer feel outraged by repeated incursions on our virtual personal space. We now welcome the scrutiny of strangers by freely sharing the most intimate details of our lives on Facebook, Twitter and other sites. While many of us (myself included) still take our privacy seriously, it's clear that an ever-growing number of Net users either don't fret too much about safeguarding their personal info or see the abandonment of privacy as the price of admission to a bright, shiny theme park of online attractions. Facebook is counting on that — as are those who will end up investing in the company. Because without our complacency and complicity, social media have little to offer and little chance of making a buck. No worries. Privacy is so 20th century. Get over it. Better yet, post something online. What could be the harm?
benton.org/node/112276 | Los Angeles Times
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FACEBOOK AND PRIVACY
[SOURCE: ars technica, AUTHOR: Jon Brodkin]
When it comes to information privacy concerns, Facebook already has a bullseye on its back. That won't change now that Facebook is going public in its highly anticipated Initial Public Offering (IPO). But disclosure rules affecting publicly traded companies may force Facebook to reveal privacy-related investigations that it otherwise might have kept secret. Facebook won't face any new regulations or government oversight specifically related to privacy, according to the experts who spoke to Ars. But in the cases of inquiries from the Federal Trade Commission or attorneys general, investigations that might otherwise remain private would become public because Facebook will be forced to disclose events that could have a material impact on earnings. Facebook settled a case with the FTC only last November, but it was known beforehand that privacy rights groups were asking the FTC to investigate Facebook, and details of the settlement were leaked shortly before the official FTC announcement. Still, it is possible for private companies to keep investigations secret in cases where public companies cannot, because the FTC does not announce investigations before they are concluded, and may not announce them at all, said Jules Polonetsky, director of the Future of Privacy Forum and former Chief Privacy Officer for both AOL and DoubleClick. Various quarterly and annual filings with the Securities and Exchange Commission must inform the public about risks potentially affecting earnings, which may include investigations into privacy practices.
benton.org/node/112215 | Ars Technica
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WHO DOES GOOGLE THINK YOU ARE?
[SOURCE: Bloomberg, AUTHOR: Karen Weise]
According to Google, the author of this article isn’t Karen Weise, 30-year-old woman and Bloomberg Businessweek reporter. Instead it sees a 55-to-64-year-old man interested in credit cards, finance, Los Angeles, politics, and “table games,” whatever those are. That’s the information provided by a Google tool that’s been available since 2009 but which few people know about. It lets users see what the search giant has inferred about them based on the websites they visit. (The URL is cumbersome, but try searching “ad preferences manager.” It should be the first link.) The results can be spot on—or wildly off the mark. They’re based on a “cookie,” a file placed by Google (and many other companies) on each computer browser to track how its users surf the Web. Google actually knows far more than browsing histories, though. It knows what people write in Gmail messages, what YouTube videos they prefer, and where they go with an Android phone. Historically, Google’s privacy policies forced it to cordon off some of its most important data sources from each other, so the profile of a given YouTube user was totally separate from her Gmail profile. It was a schizophrenic view of the world. Starting in March, Google will be able to pull together everything it knows from its disparate products.
benton.org/node/112296 | Bloomberg
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CONTENT

PROTECTING CHILDREN FROM INTERNET PORNOGRAPHERS
[SOURCE: National Journal, AUTHOR: Josh Smith]
The controversial advocacy group Demand Progress can't get enough of House Judiciary Committee Chairman Lamar Smith (R-TX). After working to torpedo his Stop Online Piracy Act, Demand Progress is taking aim at another of Smith's bills. The Protecting Children from Internet Pornographers Act (HR 1981), which cleared Smith's House Judiciary Committee 19-10 last year after a hotly contested markup, would require Internet service providers to keep some user information on file to help track pedophiles and child pornographers. The bill's supporters say it does not require the collection of content and most ISPs already retain the data. Still, the measure drew attention from critics who see a potential to undermine privacy and civil liberties. House aides say the bill is effectively dead for now, but that hasn't stopped opponents from reigniting the debate after SOPA and its Senate companion bill were shelved. The issue also resurfaced on the link-sharing website Reddit, where users organized opposition to SOPA. Demand Progress, which claims a following of more than one million, is asking supporters to send letters to Congress opposing the bill.
benton.org/node/112270 | National Journal
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NEXT COPYRIGHT AGREEMENT
[SOURCE: ars technica, AUTHOR: Nate Anderson]
One of the worst parts of the Anti-Counterfeiting Trade Agreement (ACTA) was its ridiculous secrecy, under which it was easy for negotiators and industry reps to see draft text, but impossible for the public to do so except through leaks. Thankfully, those leaks showed just how bad ACTA was going to be for the Internet, and public pressure helped remove the worst provisions. But the basic approach to doing deals didn't die, and it's back again this week as negotiators meet in Hollywood to discuss a new, totally secret intellectual property chapter for the Trans-Pacific Partnership (TPP), a regional trade agreement. Civil society and digital rights groups would dearly love to be part of the process; barring that, they'd like to know simply what the process is so that they can at least mount press conferences of their own. But even that is difficult. According to Sean Flynn, an American University professor who has worked on these issues for several years, the cloud of secrecy is again in force. "Although there has been no official announcement about the planned meeting, public interest advocacy organizations have determined that intellectual property negotiations will be held January 31-Feb 4th at a hotel in West Hollywood," he wrote.
benton.org/node/112211 | Ars Technica
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MEGAUPLOAD DATA SAFE
[SOURCE: The Hill, AUTHOR: Brendan Sasso]
The company that stored data for file-sharing site Megaupload.com said it has no plans to delete users' files. Prosecutors shut down Megaupload earlier this month and charged its operators with copyright infringement, money laundering and other charges. In a letter to Megaupload's attorneys last week, prosecutors said they had completed their search of the site's servers, which are operated by two data companies, Carpathia and Cogent. With their search complete, prosecutors said the companies could begin deleting Megaupload's data soon. Although the site is charged with hosting illegal copies of movies and TV shows, many people used Megaupload to store legitimate files, such as family photos.
benton.org/node/112221 | Hill, The
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SUPER BOWL ENFORCEMENT
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
Immigration and Customs Enforcement seized 16 websites and arrested a Michigan man as part of an operation to crack down on pirated streams of sports games and counterfeit sportswear ahead of the Super Bowl. Yonjo Quiroa, 28, of Comstock Park (MI) was arrested and charged with operating nine of the 16 websites seized as part of Operation Fake Sweep, which was announced at the Super Bowl Media Center in Indianapolis. "Sports fans may be tempted by illegal streaming websites, but in the end, it is they who pay the price," said U.S. Attorney for the Southern District of New York Preet Bharara.
benton.org/node/112220 | Hill, The | Politico | National Journal
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MORE ON FACEBOOK

FACEBOOK AND TECH LAW
[SOURCE: Internet Cases, AUTHOR: Evan Brown]
The securities laws require that companies going public identify risk factors that could adversely affect the company’s stock. Facebook’s S-1 filing identified almost 40 such factors. A number of these risks are examples of technology law issues that almost any internet company would face, particularly companies whose product is the users: 1) Advertising regulation, 2) Data security, 3) Changing laws in user privacy, rights of publicity, data protection, intellectual property, electronic contracts, competition, protection of minors, consumer protection, taxation, and online payment services. 4) Intellectual property protection, 5) Patent troll lawsuits, and 6) Tort liability for user-generated content.
benton.org/node/112196 | Internet cases
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SPENDING MORE TIME WITH FACEBOOK
[SOURCE: National Public Radio, AUTHOR: Laura Sydell]
The number of new American Facebook users is going down, and eventually the same will happen in every other market. Soon, Facebook's growth is going to depend on each user spending more time logged in, playing games, watching movies, planning trips and so on. If you do the math and divide Facebook's value ($100 billion) by its number of users (845 million), that makes every Facebook account worth about $125 — money the company will get from eyeballs on ads. So the longer you're on Facebook, the more ads you look at and the more money the company makes.
benton.org/node/112261 | National Public Radio
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WHAT IS FACEBOOK’S BUSINESS?
[SOURCE: Fast Company, AUTHOR: EB Boyd]
Facebook makes money by placing ads next to your status updates and photos. How hard could their business be? As its S-1 filing reflects, that answer is more challenging than you think. Facebook is going to have to balance a number of competing interests. It's going to have to figure out how to get people to share more of their lives on the social network, while figuring out how to display only the most interesting stuff to each individual person, and simultaneously developing ever more innovative ad products that Facebookers deem useful and relevant rather than intrusive. It's not a simple proposition. Which is partly why, as the S-1 reports, that the company has tacked up signs on the walls of its new Menlo Park campus that say "this journey is 1% finished."
benton.org/node/112207 | Fast Company
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WHAT WILL CHANGE AT FACEBOOK
[SOURCE: Fast Company, AUTHOR: EB Boyd]
Once Facebook goes public, the party's over, right? Less innovation and more kowtowing to Wall Street, no? Maybe. Then again, maybe not. Three things that will change:
1) More (Innovative) Ads: Are you a marketer who wants more access to Facebook’s 800 million users? Start thinking about information about your product that could be something a user would want to share.
2) Shopping Spree!: Think you’re a potential Facebook acquisition target? Start polishing your pitch.
3) More Lobbying: Are you an old Washington hand looking for a new and exciting career? Start friending Facebook’s DC team.
Two things that wouldn’t change:
1) The Relentless Pace of Innovation: Hoping that going public means Facebook will stop messing with your Wall? Fuhgeddaboudit.
2) Zuckerberg The Product Guy/Sandberg The Suit: If you’re a New Yorker hoping to catch sight of Zuckerberg spending more time wining and dining Wall Street types, better bone up on what Sandberg looks like instead.
benton.org/node/112206 | Fast Company
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THE FACEBOOK FASCINATION ON SOCIAL MEDIA
[SOURCE: Project for Excellence in Journalism, AUTHOR: Mark Jurkowitz]
If the past is any guide, it is almost certain that Facebook's February 1 filing of an IPO, which could value the company at as much as $100 billion, will generate major attention online. In the realm of social media, Facebook is a major and enduring topic. Since PEJ began tracking the conversation on blogs in January 2009 and Twitter in June 2009, Facebook has been among the top five topics on one of those platforms in 39 different weeks. And that interest seems to have grown over the past year. In 2011, Facebook was among the most popular subjects on either blogs or Twitter 18 weeks compared to eleven weeks in 2010 and 10 weeks in 2009. These are some findings of a special edition of the New Media Index from the Pew Research Center's Project for Excellence in Journalism, which examined how often and over what issues Facebook has risen to the top of the conversation.
benton.org/node/112265 | Project for Excellence in Journalism
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ZUCKERBERG REMAINS THE BOSS
[SOURCE: New York Times, AUTHOR: Somini Sengupta]
Since the moment he dropped out of Harvard University, Mark Zuckerberg has stayed remarkably focused on two things: Facebook, and being the boss of Facebook. Early on he was persuaded of the vast potential of the social network he built in his dorm room, say friends, investors and detractors. He pushed his team to be fast and take risks. He resisted efforts to change the way Facebook looked and worked, even if, in the beginning, it meant giving up revenue. Most important, he arranged the ownership of Facebook so as to give himself extraordinary power to steer the company. By the time Facebook filed for a $5 billion public offering, Zuckerberg had managed to hold on to more than one-fourth of the shares in the company, and his agreements with other investors enhanced his voting power to almost 60 percent of total shares. That’s a greater measure of control than Bill Gates had at Microsoft when it went public in 1986 (49 percent), and far greater than what the co-founders of Google had in 2004 (16 percent each). Typically, say Silicon Valley veterans, a first-time entrepreneur gets to the public market with a far smaller stake in his or her creation. Mr. Zuckerberg’s arrangement leaves little room for investors to have much input on the company’s direction.
benton.org/node/112304 | New York Times
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FACEBOOK’S $100 BILLION QUESTION
[SOURCE: Wall Street Journal, AUTHOR: Randall Smith]
As investors dug into the company's freshly released financials, analysts and investors began circulating a range of values -- from as little as $50 billion to as much as $125 billion -- for the social-networking website. It will be months before the market sets a final price, but already the valuation question has become a tug of war over two essential questions: Just how fast can the company continue to grow? And can it extract value from advertising in the way it plans? The company views itself through a relatively conservative lens, pegging its value for employee stock grants at $29.73 per share, giving it a total valuation of $74 billion based on the company's share count of 2.5 billion. The calculation was performed in a period when the stock market had just suffered a downturn and some Internet stocks were struggling. Since then, Facebook shares have rebounded a bit in private marketplaces to trade at $32 to $33 a share, according to securities traders, which would imply a valuation of about $81 billion. That is around the low end of an expected range for the company's offering, according to people familiar with the matter. The high end is $100 billion.
benton.org/node/112302 | Wall Street Journal | Reuters | Slate
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NO FREE RIDE FOR ADVERTISERS
[SOURCE: Wall Street Journal, AUTHOR: Geoffrey Fowler, Shayndi Raice]
For advertisers on Facebook, the free ride may be coming to an end. When the social network filed for its initial public offering, the spotlight shifted from the site's exponential user growth to a metric that may have more bearing on its market value: ad sales. For years, many advertisers simply set up shop for free on Facebook, displaying their brands to users who "liked" them. But to see how Facebook now hopes to turn many of those advertisers into paying customers, look at how it convinced Omaha, Neb.-based retailer Gordmans Inc. to stop relying on free Facebook marketing and to start spending on a new kind of Facebook ad called "Sponsored Stories." According to a new study by Portland, Ore., marketing firm BlitzLocal LLC, between June 1 and Dec. 31 of last year, unpaid displays of marketing posts to users, which the industry calls "organic," decreased 33% among its more than 300 clients. "Content that used to live for a day may now live minutes in a user's News Feed," said Dennis Yu, chief executive of BlitzLocal, which analyzed some 5.7 million posts. Amid this shift, Facebook last year unveiled a new ad format, dubbed Sponsored Stories, which requires marketers to pay for exposure for their posts—including some they might once have gotten for free.
benton.org/node/112301 | Wall Street Journal
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FACEBOOK AND PRIVACY
[SOURCE: Financial Times, AUTHOR: Maija Palmer]
One thing Facebook’s IPO filing documents make clear is that the company is taking privacy risks seriously. Privacy is mentioned 35 times, mainly as a risk factor. The company acknowledges that media coverage of privacy lapses, for example, could affect profits.
“Unfavorable publicity regarding, for example, our privacy practices, product changes, product quality, litigation or regulatory activity, or the actions of our Platform developers or our users, could adversely affect our reputation. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of our user base and result in decreased revenue, which could adversely affect our business and financial results.”
The public and media scrutiny will only increase, because as a listed company, Facebook will be obliged to reveal any privacy-related investigations into its business. Facebook’s filing documents also mention, several times, the risks from changes in privacy laws both in the US and Europe.
benton.org/node/112300 | Financial Times
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FACEBOOK’S IPO
[SOURCE: Financial Times, AUTHOR: John Gapper]
[Commentary] At long last Facebook has filed for its initial public offering, the most eagerly awaited event in Silicon Valley since Google went public in 2004. Having read the prospectus, with its details of how profitable and cash-rich the social networking enterprise is, may I suggest it calls the whole thing off. There is still time to cancel its IPO and the filing provides plenty of reasons why it ought to, and why Mark Zuckerberg, its founder and chief executive, would probably be happier if it did. He could carry on running Facebook as a private company and would not have to justify himself to outsiders. So what are its plans for the additional $5bn it may raise from an IPO? It intends to put the cash into US government bonds and savings accounts, and perhaps use some to pay the tax due on converting into shares the “restricted stock units” it has given to its 3,200 staff. Its sole tangible purpose for the IPO proceeds is to meet a tax obligation that will be triggered by going public. Welcome to the Catch-22 world of the venture capital liquidity event.
benton.org/node/112299 | Financial Times
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WIRELESS/SPECTRUM

FCC GIRDING FOR NEW FIGHT WITH AT&T AND VERIZON
[SOURCE: Bloomberg, AUTHOR: Paul Barbagallo]
The Federal Communications Commission is laying the groundwork for yet another battle with Verizon Wireless and AT&T over competition policy. According to agency and industry sources, the FCC is expected to begin a formal rulemaking process by midyear that could result in manufacturers of handsets, chipsets, and network equipment being required to make their products compatible with all frequencies across the entire 700 megahertz band of radio spectrum -- not just particular slices under the control of Verizon and AT&T. “If you're a carrier that has only 1 million subscribers, you can't buy a handset that's uniquely designed for your 700 MHz band spectrum that's anywhere near cost-competitive to that of a Verizon or AT&T,” said Steven Berry, president and chief executive officer of the Rural Cellular Association. “This world is all about scale.” “Once my customer leaves my network and tries to go to another, they can't roam because it's technologically impossible.” Ben Moncrief C Spire Wireless Some manufacturers have declined requests to build phones and network equipment for C Spire Wireless, Cavalier Telephone, and U.S. Cellular, among others, for precisely this reason. If a manufacturer cannot sell 65 million to 80 million units globally, Berry noted, “they're just not making money.” At the same time, many of the smaller, more regional carriers have stalled in their efforts to roll out the next generation of wireless coverage—4G—using the airwaves they purchased at the FCC's 700 MHz band auction in 2008.
benton.org/node/112217 | Bloomberg
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AT&T AND SPECTRUM AUCTIONS
[SOURCE: AT&T, AUTHOR: Jim Cicconi]
Former Federal Communications Commission Chairman Reed Hundt concedes FCC mistakes in the spectrum auction that involved NextWave, yet he is still pushing for FCC discretion in future spectrum auctions. As Reed admits, Congress gave the FCC discretion in the PCS C Block auction, and it used that discretion in a way that resulted in an auction that was a disaster for the industry and for the Treasury. And the flaw, in our view, was not simply a function of installment payments. It was the decision to have a closed versus an open auction. Our point is that an auction should be open to all competitors, not just to those handpicked by the FCC. Reed was a good and diligent chairman, and it’s characteristic of him that he’d acknowledge a mistake. But Congress has every right to learn from those mistakes, and to insist the FCC not repeat them. That’s what the House spectrum bill does. The FCC should get behind it and put the interests of the country first so that we can quickly move forward to address the looming spectrum crisis that we all agree is the biggest threat to innovation, job creation and growth for the wireless industry.
benton.org/node/112193 | AT&T
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CHARLOTTE’S SAFETY NET
[SOURCE: Politico, AUTHOR: Brooks Boliek]
Charlotte (NC) is pushing the Federal Communications Commission to approve the city’s advanced wireless public safety network, arguing that it needs to be in place before thousands of high-profile targets like President Barack Obama arrive for the Democratic Convention. In a filing at the commission made public Wednesday, Charlotte and Mecklenburg County contend that they meet all the interoperability requirements needed for an FCC waiver that will let public safety officials there light up their network — code named CHARMECK — before the convention starts Sept. 3. “Since the president of the United States and other key dignitaries will be in attendance, the 700 MHz public safety wireless broadband network is anticipated to be used by thousands of federal agents, state and local first responders to ensure the security of thousands of participants to this worldwide event,” the city wrote in an FCC filing.
benton.org/node/112229 | Politico
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ANDROID MARKET
[SOURCE: Wall Street Journal, AUTHOR: Amir Efrati]
Google said it has beefed up security on its Android mobile-device software to better prevent "malicious" software from residing in its app store. Hiroshi Lockheimer, Android's vice president of engineering, said that Google last year began automatically scanning Android Market apps for malicious software, including "spyware" and "trojans." The comments follow pronouncements by companies such as Juniper Networks Inc. and Lookout -- both of which sell online-security services -- that claimed last year that a growing number of malicious apps were appearing on the Android Market, where hundreds of thousands of apps are available for download. Google's comments also come after several instances where Google said it removed malicious apps from the Android Market after they had been downloaded to thousands of devices.
benton.org/node/112297 | Wall Street Journal
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MOBILITY FUND AUCTION
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Wireless Telecommunications and Wireline Competition Bureaus announced a reverse auction to award $300 million in one-time Mobility Fund Phase I support and seek comment on auction procedures and certain related programmatic issues. This auction is scheduled to begin on September 27, 2012, and is designated as Auction 901. Auction 901 will be the first auction to award high-cost universal service support through reverse competitive bidding. (AU Docket No. 12-25)
benton.org/node/112294 | Federal Communications Commission
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VERIZON PLAN
[SOURCE: GigaOm, AUTHOR: Stacey Higginbotham]
Congress is eyeing the competitive implications of Verizon’s $4 billion deals to buy spectrum from the cable companies, hoping to understand how the deals could affect both wireless and wireline markets. Much like those of us at GigaOM, some in the Senate are wondering if this is a ceasefire in terms of broadband competition, both in the air and on the ground. Under a pessimistic view the deal could lead to consumers getting stuck five or ten years out with slower broadband than the rest of the world, with no competitive impetus to move the U.S. forward. On the wireless side, it potentially eliminates the threat or the existence of a new player that could lower prices and keep Verizon and AT&T “honest.” That’s why Congress, the FCC and perhaps the Department of Justice should ask a lot of questions about this deal and its attendant marketing agreements between the cable companies and Verizon.
benton.org/node/112290 | GigaOm | New York Times
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TELEVISION

SUPER BOWL AD
[SOURCE: Politico, AUTHOR: Brooks Boliek]
Anti-abortion crusader and would-be Democratic candidate for president Randall Terry expects the Federal Communications Commission to decide as soon as Feb 3 if television stations must run his graphic ads — featuring aborted fetuses — during Sunday’s Super Bowl. “I think we’re going to win,” said Terry. Terry, founder of the anti-abortion group Operation Rescue in the 1980s, has been fighting to get NBC’s WMAQ station in Chicago to air the commercial during the game under rules that require broadcasters to give access to legitimate candidates. The TV station turned Terry down, after the Democratic Party disavowed him, but now Terry is asking federal regulators to intervene. Terry said that a half-dozen other stations across the country will run the ads as they are already “bought and paid for.” While the ads contain what many would consider objectionable images, Terry contends that TV stations are legally barred from denying a “bona fide” federal candidate reasonable access to the airwaves.
benton.org/node/112288 | Politico
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MEDIA & ELECTIONS

MEDIA AND SUPER PACs
[SOURCE: Center for Public Integrity, AUTHOR: Corbin Hiar]
Conservative complaints about a liberal bias in the media do not hold up, at least not when it comes to the free-spending groups known as “super PACs.” News companies and their executives donated more than $350,000 to conservative super PACs in 2011, according to financial disclosure forms filed with the Federal Election Commission. The donations included $100,000 from St. Paul-based Hubbard Broadcasting to the American Crossroads super PAC, which was created by Bush White House strategist Karl Rove. Hubbard is a family-owned media company with a dozen local TV stations, 21 radio stations — including D.C.’s leading news channel WTOP — and a national cable channel.
benton.org/node/112262 | Center for Public Integrity
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CYBERSECURITY

IS CYBERSECURITY AS IMPORTANT AS BORDER SECURITY
[SOURCE: Government Technology, AUTHOR: ]
Forty-five percent of legislators and cybersecurity experts representing 27 countries think cybersecurity is just as important as border security, according to a report by McAfee and the Security Defense Agenda that was released this week. The organizations surveyed 80 professionals from business, academia and government to gauge worldwide opinions of cybersecurity issues and revealed the findings in a report called Cyber-Security: The Vexed Question of Global Rules. Researchers found differing views on what cybersecurity means and how to approach it. They also analyzed the steps countries are taking to handle national cybersecurity.
benton.org/node/112268 | Government Technology
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FCC REFORM

USTELECOM BACKS FCC REFORM
[SOURCE: The Hill, AUTHOR: Gautham Nagesh]
A major telecom trade group threw its support behind legislation to overhaul the Federal Communications Commission ahead of next week's markup in the House Commerce Committee. U.S. Telecom, which represents both large and small telecom providers, sent a letter to panel Chairman Fred Upton (R-MI) applauding the scheduled markup Feb 8 of two bills from Telecom subpanel Chairman Greg Walden (R-OR) that would reform the way the FCC does business. "As Communications subcommittee Chairman Greg Walden has indicated, the bills being scheduled for markup Tuesday will ensure that best practices become a part of statute, that transparency will not depend upon who is serving as chairman, and that there will be consistency of application and predictability among administrations," wrote U.S. Telecom President Walter McCormick Jr. The process reform bills would consolidate some reporting requirements, codify the unofficial shot clock for merger reviews and limit the types of conditions the agency can place on transactions. Other provisions would likely make it more difficult for the FCC to pass new regulations.
benton.org/node/112225 | Hill, The
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MORE SUPPORT FOR FCC REFORM
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The National Association of Broadcasters and the National Cable & Telecommunications Association both supported full House Commerce Committee consideration of Federal Communications Commission reform bills that have already passed out of the Communications Subcommittee. H.R. 3309, the Federal Communications Commission Process Reform Act of 2011, would among other things, require the commission to 1) survey the marketplace via a Notice of Inquiry before initiating any new rulemakings; 2) identify a market failure, consumer harm, or regulatory investment barrier before adopting any "economically significant" regulations; demonstrate that the benefits of any regulation outweigh the costs, 3) requiring any conditions imposed on transactions to be within the Commission's existing authority and not tailored to remedy any transaction-specific harms.
H.R.3310, the Federal Communications Commission Consolidated Reporting Act of 2011, would require the FCC to conduct a biennial survey of the state of competition in the marketplace that it publishes online and submits to Congress. The FCC already conducts a quadrennial (originally biennial) regulations review. But unlike that process, in this review, the FCC would be required to take into account competition from the Internet.
benton.org/node/112293 | Broadcasting&Cable
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GOVERNMENT & COMMUNICATIONS

LIVE-STREAMING HEARINGS
[SOURCE: The Hill, AUTHOR: Debbie Siegelbaum]
The House is now offering live video streaming of committee proceedings online through the Library of Congress. The Library of Congress also will archive previous committee proceedings, which the panel said would create the first “one-stop shop for House committee video content.” “These videos, now available to the public in one centralized location, will allow constituents to quickly access House committee proceedings,” wrote Administration Committee Chairman Dan Lungren (R-CA). “Our democracy is strengthened through transparency and an open congressional process,” he added. “I want to thank each of our committees, the House Recording Studio, and especially the Library of Congress for working collaboratively to achieve this important milestone, and I look forward to working with each entity to further increase legislative transparency.”
benton.org/node/112219 | Hill, The | Thomas
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POLICYMAKERS

GURIN LEAVING FCC
[SOURCE: Federal Communications Commission, AUTHOR: Press release]
Joel Gurin, Chief of the Federal Communications Commission’s Consumer and Governmental Affairs Bureau (CGB) will step down from his position as of February 17. Kris Monteith, currently a Deputy Chief in the Media Bureau, will serve as Acting Bureau Chief. Joel Gurin has been Chief of the Consumer and Governmental Affairs Bureau since joining the Commission in December 2009. Under his leadership, the bureau tackled such issues as bill shock, cramming and robocalls; launched the Office of Native Affairs and Policy; and led the agency effort to implement the 21st Century Communications and Video Accessibility Act – the most significant legislation for people with disabilities since the Americans with Disabilities Act two decades ago. Gurin has a diverse background combining nonprofit leadership, print and Web publishing, and expertise in consumer issues. He most recently served as Acting President of NARSAD; as Acting Editor-in-Chief for State of the USA; and as Senior Vice President of Rodale Interactive. Prior to that, Gurin was Executive Vice President of Consumers Union, the nonprofit publisher of Consumer Reports, for almost a decade. He launched and grew Consumer Reports’ Web site, the world’s largest information-based paid subscription site.
benton.org/node/112230 | Federal Communications Commission |
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