July 2012

Pity the poor car dealer in Norfolk (VA). Advertising his business has become a lot more expensive in recent months, thanks to presidential campaigns and outside political groups that have poured millions into television advertising there -- and in dozens of other ad markets around the country.

The cost of running a single television advertisement has jumped in key markets across the country as candidates, party committees, and independent groups race to get their advertisements on the airwaves. Because the television market is finite and supply does not increase along with demand, prices spike as inventory shrinks. And that's starting to happen: In Norfolk earlier this year, a single gross ratings point -- the measure of how much of the population sees an advertisement -- cost $95; now, it's spiked to $250, according to some estimates. That's because presidential contenders and outside groups have spent more than $7.2 million in that market alone -- a market that reaches just 21 percent of the state's voters. Prices in Richmond, Va., have more than doubled; costs in Tampa, Las Vegas, Cleveland, and elsewhere have jumped 30 percent or more. At the height of a campaign's advertising blitz, running 1,000 to 2,000 points is considered sufficient to reach everyone in a district enough to allow a message to sink in. President Obama, Mitt Romney and, in some cases, even Senate campaigns are already hitting those marks.

Skype, the online phone service long favored by political dissidents, criminals and others eager to communicate beyond the reach of governments, has expanded its cooperation with law enforcement authorities to make online chats and other user information available to police, said industry and government officials familiar with the changes.

Surveillance of the audio and video feeds remains impractical — even when courts issue warrants, say industry officials with direct knowledge of the matter. But that barrier could eventually vanish as Skype becomes one of the world’s most popular forms of telecommunication. The changes to online chats, which are written messages conveyed almost instantaneously between users, result in part from technical upgrades to Skype that were instituted to address outages and other stability issues since Microsoft bought the company last year. Officials of the United States and other countries have long pushed to expand their access to newer forms of communications to resolve an issue that the FBI calls the “going dark” problem.

News Corp. is taking a stake in Internet video streaming set-top box maker Roku and putting one of its senior executives on Roku's board of directors as it seeks a greater role in distributing video over the Web. The media giant's investment, along with that of its part-owned subsidiary British Sky Broadcasting, is part of a fifth round of funding for Roku of $45 million. It brings total funding in Roku to $77 million since it was founded in 2002. The capital injection puts off the need for Roku to make an initial public offering of stock.

While physical access to broadband connections remains a major concern for adoption, a Broadband Breakfast Club panel focused most of its attention on the other prongs of adoption which involve cost education and relevance. Efforts to subsidize cost of service cost of hardware along with digital literacy efforts were the primary concern of the panelists. Amina Fazullah, Policy Counsel of The Benton Foundation, Cheryl Leanza, President of A Learned Hand, Sonja Murray, Executive VP and Chief Program Officer at Connect2Compete, Bret Perkins, Vice President of External and Government Affairs at Comcast, Rick Schadelbauer, Economist at the National Telecommunications Cooperative Association (NTCA) and Jason Whittet, Deputy Director of the Massachusetts broadband Institute made up the panel of experts for the discussion.

Fazullah began the discussion with an update of some of the most recent changes made to the Lifeline program at the FCC, including a number of proposed cost saving measures, updates to the eligibility and verification processes and changes to the way low income consumers can participate. She specifically cited the clarification of the one subsidy per household with the same address issue which had previously prevented those living in group homes, homeless shelters and senior facilities from participating in the program. The FCC has launched their Lifeline and Link Up Pilot projects for broadband which propose to change the program from a voice subsidy to a broadband subsidy. Fazullah said that all the applications for the Pilot Project were received by the Commission as of last Monday and over half the country is represented in the applications. She references a mix of rural and urban applications that all seem to have a combination of support for providing broadband service, as well as partnering with community organizations to provide equipment and digital literacy training.