May 2012

Google, Wi-Fi snooping and the ever-shifting “creepy” line

While there has been much public outrage about Google’s snooping of wireless networks via its Street View cars, it’s interesting to note that even the Federal Communications Commission said the company’s data capturing wasn’t illegal, since the networks in question were effectively public (the Federal Trade Commission also dropped a similar case). Is this a sign of how broken the laws around privacy are, or is the Street View furor an over-reaction?

Privacy advocate Chris Soghoian says that the FCC should be hauled before a congressional committee for failing to reveal this information sooner, and some commenters on Twitter and elsewhere have suggested that Google should be fined millions of dollars for what it did. Some are even declaring that the engineer involved, who invoked the Fifth Amendment during the FCC investigation and refused to testify, should be sent to prison for his involvement in the project.

How and why you should do data journalism

One of the big areas of focus for technology companies over the past year has been “big data” — in other words, the idea that there can be a lot of value in finding patterns in the massive quantities of user data and other information that a business generates. This has a corollary in journalism too: namely, the growing realization that there is a lot of value in finding patterns in news-related information. This weekend saw the launch of an e-book that could be a useful resource for anyone planning to explore that field: The Data Journalism Handbook. Released at the 2012 International Journalism Festival in Italy, the handbook is a collection of testimonials, tips and in-depth case studies about data-oriented journalism — and fittingly enough, the information was crowdsourced from dozens of leading practitioners of the craft, from the BBC and the Financial Times to the Chicago Tribune and the New York Times (both of whom have teams of developer/journalists who work on data-related projects). The book is being made available free of charge online under a Creative Commons license, although a printed version is also in the works from O’Reilly Media.

Silly cord cutter, you will pay for cable. Oh yes.

[Commentary] The rumors that Hulu may soon require subscribers to have a cable TV subscription is the perfect cautionary tale for why the companies that make and distribute content shouldn’t own the pipes that deliver that content.

And if the rumors are true, it’s not just a cautionary tale, it’s the new playbook by which pay TV providers will force consumers to buy a special pipe for “the Internet” and a second pipe for TV, despite the fact that technically they are becoming the same thing. There is no denying that as the future of television unfolds it’s disrupting the traditional broadcast, cable TV and content creation models. And while the Senate held a hearing last week to discuss this shift, it felt like they were arriving late to the party, unaware of just how much things were changing as broadband and television converged. Instead of understanding what that convergence meant for the economics of old and new industries and what regulations might be needed to avoid protectionist behavior by pay TV providers and broadcasters, the hearing dealt more with discussions around reworking the Telecommunications Act of 1996 for the current era. That’s not going to happen anytime soon, but I did wonder at the lack of Hulu in the conversation occurring last week at the Capitol.

How Apple will become a mobile carrier

[Commentary] What’s next for Apple? Apple will provide wireless service directly to its iPad and iPhone customers.

First, Apple will sell data packages bundled with iPads. Then it will sell data and international roaming plans to iPhone customers through the iTunes Store. And in time — sooner than many think — Apple will strike wholesale deals with several mobile operators so that Apple can provide wireless service directly to its customers, as Apple Mobile. Will domestic and global mobile operators like AT&T, Vodafone, Telefónica and others “play ball” with Apple? Many in the U.S. were surprised six years ago when AT&T capitulated to Apple’s terms to become the first carrier to offer the iPhone six years ago. Conventional wisdom is that the struggling operators compromises, not a leading operator like AT&T. But Apple makes everyone “think different.” Apple has all of the pieces necessary to offer wireless service directly to customers. They have the world’s leading brand, a loyal following who will pay a premium for Apple’s products and services, and 363 retail stores around the world, growing to 400 by the end of the year. And with iTunes, it has the digital content and billing platform to offer service with one-click simplicity. The infrastructure is in place today, with the patented architecture ready for Apple’s next big move.

[Bluestein, a 25-year telecom veteran, is a strategic advisor and corporate development specialist focused on prepaid, applications, payments and services.]

Silicon Valley is Motown and the Web is a hit factory

The debate over whether or not Silicon Valley is in a bubble might not be the right question. Instead, we may want to ask whether the fundamental principles of tech investing are shifting, as technology becomes more of a consumer phenomenon.

For all the talk of the long tail, the big money is in sites and services that capture a large user base. So how does venture capital and angel investing change to support this model? And should it? Success in this realm isn’t like success in the old-school Silicon Valley world of building chips or enterprise software. The product still matters, but the audience isn’t the few technically or business-savvy experts at a large company that is evaluating your wares for a multimillion-dollar deal. Today it’s selling to the billion people on Facebook, hoping they will give you a click, a tweet or five minutes of their time to be monetized in the form of ads.

Upfront Forecasts: Cable Surpasses Broadcast

More optimistic than other recent media analysts' estimations, Anthony DiClemente of Barclays Capital expects upfront revenue for the major four broadcast and cable networks to climb 4.3% and 6.3%, respectively. Much like other estimates, DiClemente expects cable to be higher than broadcast overall -- getting to $9.88 billion and the broadcast networks $9.5 billion. A recent estimate from Morgan Stanley said broadcast networks could gain 1% to $9.2 billion, and 4.3% to $9.7 billion for cable. There are some 60-plus advertising-supported cable networks.

Billions in Stimulus Funding Hasn’t Made Power Grids Safer

A majority of energy security practitioners do not believe economic stimulus-funded smart grid projects sufficiently protect the nation against cyberattacks, according to findings reported by an Energy Department-funded public-private partnership.

The 2009 American Recovery and Reinvestment Act has paid out $2.5 billion to modernize the U.S. electric system by digitizing the way power is distributed to consumers, according to Energy financial submissions. Program plans from June 2009 stated that one goal of the initiative, which will disburse $4.5 billion, was to “enhance security and reliability of the energy infrastructure.” When asked if smart grid projects adequately addressed security, 67 percent of participants surveyed by the public-private group, EnergySec, said, no. The March 2012 survey questioned 104 energy security professionals.

Digital circulation up 63% for US newspapers

The semi-annual numbers are out from the Audit Bureau of Circulations, marking the first time we have year-over-year comparables since the ABC changed its digital reporting guidelines.

This used to be a fairly easy affair — you looked at the charts and you could see winners and losers at a glance. It’s not that easy now, however, since the agency’s efforts to measure total circulation in these complicated times altered the field. The ABC even includes a warning “against drawing too many direct comparisons of the data in today’s FAS-FAX report.” The ABC rule changes make it easier for newspapers to break their circulation into recognizable, meaningful categories that can be audited, for instance, counting all digital circulation instead of limiting it to replica editions. They recognize that the same information can be delivered in different ways but still needs to be verified for marketers. Some top-line numbers for the six-month period ending March 31, 2012:
Digital circulation now accounts for 14.2 percent of newspapers’ total circulation mix; up 63 percent from 8.66 percent in March 2011. That includes tablet or smartphone apps, replica editions, metered or restricted-access websites, and e-reader editions.

That’s the same percent increase as the report covering the reporting period that ended in September.

Average daily circulation was up .68 percent; that covers 628 papers.
Average Sunday circulation was up 5 percent; that covers 532 papers.

28 hours of political ads and a few minutes of news

In the weeks before the April 24 primary, folks in Northeastern Pennsylvania saw and heard a lot on local television stations about the battle between longtime incumbent Democrat Rep. Tim Holden (D) and challenger-turned-primary-winner attorney Matt Cartwright (D). The visibility on the airwaves came through a deluge of paid political ads—not, unfortunately, from actual news reports (which were comparatively scarce and, when offered, not particularly substantive).

According to my recent review of the public inspection files (where broadcasters are required to log, among other things, political ad buys) at six area television stations, candidates Cartwright and Holden and assorted interest groups together spent more than $1.1 million in March and April on 30-second ads in the race for the 17th district, a jagged new area capturing big D cities of Scranton, Wilkes-Barre, and Easton. (Note: These and all figures in this post come from my review of the stations’ files and have not been independently confirmed with the candidates or outside groups.) This translated into more than 3,300 spots. Most of the money and the lion’s share of ads —1,673 spots costing $728,100—ran on WNEP (ABC), the region’s dominant local news source, and its second-feed station, WNEP2.

The Wireless Industry: The Essential Engine of US Economic Growth

Recon Analytics undertook a comprehensive review of data related to the economic impact of the US wireless broadband industry on the US economy. We have concluded that the impact is broad and deep.

In 2011, the economic impact includes the following highlights:

The US wireless industry is responsible for 3.8 million jobs, directly and indirectly, an increase of more than 200,000 over the past six years; this accounts for 2.6% of all US employment.
The wireless industry retained $146.2 billion in GDP in the US (and generated $195.5 billion in economic activity globally) in the 12 months from July 2010 to June 2011.1
At $195.5 billion, the wireless broadband industry would rank as the 46th largest economy in the world, as measured by GDP.2
The wireless industry is now larger than the publishing, agriculture, hotels and lodging, air transportation, motion picture and recording, and motor vehicle manufacturing industry segments and rivals the computer systems design services and oil and gas extraction industries.3
The wireless industry and its direct and indirect employees paid $88.6 billion in taxes, including federal, state and local fees and taxes.4
The consumer surplus, the difference between what end users are willing to pay and what they have to pay for services, was $502.7 billion in 2010.5
According to Kantar Media, telecom has been the second largest advertising category in the United States for the last several years running and has two of the four largest advertisers in the country.
The EU wireless penetration continues to outpace the US, with the EU reaching 126.2% at the end of 2009 and the US reaching 102.4% penetration in June 2011.
After accounting for the higher EU subscriber penetration rates, the level of outbound and inbound minutes of use in the US is more than double the level seen in the EU (875 minutes versus 418 minutes).
Average prices per minute of use in the US ($0.049 per minute) are a quarter of the EU price level ($0.167 per minute).

Benton

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