April 2012

The cable industry isn’t stupid, right?

[Commentary] We’re rapidly moving to a future where cable broadband service will be the predominant choice for consumers who want fast access to the Internet, but in light of a study that predicts $200 bills by 2020 for the pay TV portion of cable, I have to wonder: Are the cable guys the idiots, or is it the consumer?

The NPD Group credits rising content licensing fees and the average 6 percent rate increase that cable companies jam down users’ throats each year. But the idea of paying $200 in eight years, or even $123 in 3 years seems like an insanity for most consumers. It also seems like an insanity for the cable companies to attempt given how rising cable costs amid grim economic times leads folks to cut the cord. But is demand for cable inelastic? The NPD report notes that 16 percent of U.S. households don’t have pay TV service. This means 84 percent do — a huge success for the industry. But can it last?

There's An App for That - But At What Cost?

[Commentary] The App Store has over 500,000 apps for work, play and everything in between. There are apps for news, finance, travel, social networking, games and everything else you can imagine. There is even a turkey call app for those who enjoy turkey hunting. But at what cost are all these apps? For consumers, it is the loss of privacy. For members of the app industry, it is the constant scrutiny of their privacy and data collection practices on both the state and federal level. Given the astounding rate of growth of mobile apps, it is not surprising that regulators and lawmakers are focusing on the privacy issues raised by such apps. In light of current scrutiny on both the state and federal level, the mobile app industry must pay special attention to developments in this area.

White House to establish chief technology officers' council

The White House is in the process of launching a new council of government technology officers tasked with sharing insights and solving problems across government, Veterans Affairs Department Chief Technology Officer Peter Levin said.

The new council doesn't yet have an official name, but it will function something like a chief technology officers' council, Levin said. It will augment the President's Innovation Cohort, a group formed early in the Obama Administration for politically-appointed chief technology and chief innovation officers, he said, by bringing in career staff. "I would guess . . . it will be more on the informal side," Levin said. "What will be formal is regular meetings, maybe monthly meetings, and a specific agenda. What will be informal about it is who actually has to be there and what are your roles and responsibilities."

Feds work out the bugs in top secret telework

After a federal employee allegedly leaked a trove of confidential documents to anti-secrets website WikiLeaks, the government responded with tighter controls on information sharing. But hunkering down on unauthorized access to official data hasn't necessarily disconnected teleworkers, say current and former federal security officials.

If information sharing and information protection can coexist then so can telework and data security, as evidenced by the actions of the Office of the National Counterintelligence Executive, or ONCIX, as well as the Defense Department and the Office of Management and Budget. In October 2011, President Obama issued an executive order directing agencies to retrofit classified networks with safeguards to stop intrusions and unauthorized downloads. An interagency insider threat task force, managed by ONCIX, was created to instruct departments on controlling employee access, even at off-site locations. Task force members are looking at how to apply protections so that they don't conflict with telework laws.

Woman sues Verizon for lying about Internet speed

A California woman claims that Verizon talked her into buying a faster internet plan even though it didn’t have the technological capability to deliver what it promised.

In a complaint filed in Los Angeles state court, Patricia Allen of Santa Monica says that a Verizon sales rep talked her into switching from a $24.99 to a $34.99 DSL plan that was supposed to deliver internet at the speed of 1.5 Mb per second. Allen claims, however, that her connection only ever reached half that speed and that when she complained to Verizon, a technician told her faster speeds were impossible because she lived two miles from a Verizon service center. She adds that a rep told her to downgrade because her line could only accept speeds of up to 768k per second. The way DSL service works, customers who live too far away from the central office of the telco face diminishing speeds as the noise on the copper lines that provide the service increases with distance. Thus, customers who live closer can get the top speeds advertised, while those a few streets away will find themselves surfing along at speeds reminiscent of the late 90s. Allen also says the company refused to issue a refund.

California Legislation Would Eliminate Consumer Protection for Internet Services

Sometimes states operate against stereotype, and this legislative session is no exception. In contrast to a forward-thinking bill put forward in West Virginia earlier this year, which would have explicitly granted authority over high speed broadband Internet services, it seems the typically consumer-friendly and technologically savvy California legislature is considering moving in the opposite direction, taking up a policy that was endorsed by the ultra-right wing American Legislative Exchange Council (ALEC) when it was under consideration in New York State. The aim of the legislation is simple: to prohibit any state agency from regulating any Internet Protocol service. In other words, just as most Americans are moving to new technologies, the state might pull out the rug on any rules to protect consumers who use it.

Proposed Bill Would Create New Broadband Grant Program

Sen Kirsten Gillibrand (D-NY) has introduced a bill that would give the Department of Agriculture the ability to issue grants for up to 50% of construction costs for broadband networks in rural areas where market conditions would not otherwise support such a network. The Broadband Connections for Rural Opportunities Program Act of 2012 (S.2275 and also known as the B-CROP Act of 2012) would amend the Rural Electrification Act of 1936 to establish the grant program.

Some highlights:

Applications would be made to the Secretary of Agriculture and the bill leaves it to the Secretary to determine application details
In making awards, the bill specifies that priority be given to projects that provide service to the highest proportion of rural residents that do not have access to broadband service or that will use broadband services to stimulate rural economic development. The bill notes that this could include projects that would connect business incubators in rural communities or that would be integrated with county and regional organization plans.
The bill talks about giving the Secretary the discretion to use a certain percentage of budget authority to hire administrative personnel and for a national competition to create and maintain a “comprehensive and interactive rural broadband clearinghouse accessible on the Internet at no cost.” This clearinghouse would have information about “options, opportunities, resources, successful public-private partnerships, comprehensive funding sources and technology tutorials for rural broadband.”
The U.S. Comptroller General would be required to evaluate and report on the effectiveness of all federal broadband assistance programs.

Increasingly, Reporters Must First Answer Some Questions

How many people would bother to impersonate a reporter? Enough, apparently, to cause some government officials to do preliminary background checks on people to whom they grant interviews.

'Do Not Track' Web Browser Option Gains Steam

Government regulators in the U.S. and Europe are putting pressure on the online advertising industry to adopt a new Web browser option called "do not track."

The option is designed to let people request more privacy from the websites they visit. But there's no consensus yet on how much privacy users should expect. An Internet industry task force convenes April 10 in Washington to try to hash that out. Some browsers, like Internet Explorer, Safari and Firefox, already come with a "do not track" button. Other browsers are expected to add the feature soon.

Are landlines doomed?

It's clear that landlines' best days are behind them. Nearly 32% of American homes are now cell phone-only households -- double the rate from 2008 and nearly triple that of 2007, according to a recent government study. Sales are plunging.

Verizon's landline revenue has fallen 19% since 2007, and AT&T's is down 16.5% over same period. Still, it's unlikely that the nation's two biggest telecom giants will ditch their landline businesses entirely. Even as consumers' usage drops, both companies have growing cable TV and broadband Internet businesses that make use of the wireline infrastructure. Also, a large number of corporate clients rely on landline service. Cellular communications actually are mostly transmitted over wires, with just the cell phone-to-tower communication taking place over airwaves. Landlines also make up a surprisingly large chunk of the telecom giants' sales, even as their overall volume declines. Last year, landline services accounted for 47% of AT&T's revenue and 37% of Verizon's sales. That's not to say the telecom giants are bullish on landlines' future. Both companies are exploring the possibility of shedding much of their landline business.

Benton

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