August 2012

[Commentary] The Federal Trade Commission made a giant move toward heavy-handed antitrust regulation by changing the rules on when it would seek disgorgement of profits as a remedy for alleged violations.

It rescinded a unanimous, bipartisan 2003 decision that the agency would rarely if ever seek disgorgement. One reason for the earlier rule was that commissioners realized that their test for seeking disgorgement was overly vague. Last month's change could be timed to the agency's high-profile investigation of Google for potential anticompetitive practices. FTC Commissioner Maureen Ohlhausen dissented from the FTC's change in the rules, saying, “"In essence, we are moving from clear guidance on disgorgement to virtually no guidance on this important policy issue." If the FTC accuses Google of violating antitrust in its approach to search and then seeks disgorgement of profits, the damages could be huge. This FTC change got little attention (other than from Washington law firms that rushed out the news), which will further encourage companies to lobby regulators to go after competitors by raising the stakes. As government becomes more intrusive, crony capitalism follows. For the technology companies that are supposed to be the drivers of our economy, this kind of regulatory uncertainty is a growing burden. The response to innovation by one company should be more innovation by others, not competitors calling in lawyers and lobbyists.

When the Food and Drug Administration started spying on a group of agency scientists, it installed monitoring software on their laptop computers to capture their communications. The software, sold by SpectorSoft of Vero Beach (FL), could do more than vacuum up the scientists’ e-mails as they complained to lawmakers and others about medical devices they thought were dangerous. It could be programmed to intercept a tweet or Facebook post. It could snap screen shots of their computers. It could even track an employee’s keystrokes, retrieve files from hard drives or search for keywords. Government workers have long known their bosses can look over their shoulder to monitor their computer activity. But now, prompted by the WikiLeaks scandal and concerns over unauthorized disclosures, the government is secretly capturing a far richer, more granular picture of their communications, in real time. Federal workers’ personal computers are also increasingly seen as fair game, experts said.

Howie Mandel wore black high-top shoes — and nothing else — during a remote shoot for NBC's "America's Got Talent." Krysten Ritter strolled around in the altogether, casually snacking and chatting on ABC's "Don't Trust the B— in Apartment 23." And Ashton Kutcher greeted visitors on CBS' "Two and a Half Men" in shaggy shoulder-length hair and his birthday suit. These aren't clips from "Networks Gone Wild," but scenes from the recent broadcast season where instances of "full nudity" have skyrocketed. The trick, of course, is that the actors just appear to be naked — the censor-offending, federally banned body parts blurred beyond recognition by the wonders of modern editing.

Known as pixelization, the post-production technique, which displays a certain area of a photo or footage at a much lower resolution, came into wider use years ago largely in TV news, documentaries and reality programs. There, the practice obscured product placements, and distorted everything from a license plate number to a human face to protect privacy rights. But now television writers are using the tactic as a sight gag and a way to attract attention, in much the same way that scripted programming commonly bleeps out censored language. The stars themselves are almost always not in their birthday suits anyway. Instead, they are outfitted with body suits or swimsuits that are later erased or covered up with special effects, according to producers and industry insiders. In the 2010-11 television season, there was one instance of pixelized "full frontal nudity" on the major networks. This season, there were 64, according to new research by the Parents Television Council, a nonprofit Los Angeles-based media watchdog group. Though the nudity is usually phony, this use of pixelization pokes at the standards of what is considered decent and underscores a larger debate about what should be allowed on television.

[Commentary] Beware of bills that claim to solve no problems. One of those is in the Legislature right now, waiting patiently for the Assembly to pass it along to Gov. Jerry Brown. The text of the bill, SB1161, says that its intent is to "reaffirm California's current policy" on Internet phone services like Skype and Google Voice by preventing the California Public Utilities Commission (CPUC) from regulating them. Certainly Internet phone services deserve a light touch when it comes to governmental regulation. A rapidly growing number of Californians have come to depend on them, particularly for international communications. Given these numbers, we grew suspicious when we learned that some of SB1161's biggest supporters were traditional telephone companies like AT&T and Comcast Communications. Why would these companies go out of their way to support the competition? And given the way the CPUC has treated Internet phone companies thus far - there's been very little regulation of these services, and commission members have indicated that they aren't keen on regulating them - where's the burning need for this bill? If there's no reason for a bill like this, and so much confusion about how it's going to affect the commission's basic regulatory jurisdiction, then there's no need for this bill. A bill about Internet phone service should be about Internet phone service - not about the commission's basic right to protect the public. The Legislature needs to vote down SB1161, and it needs to do so quickly. The bill passed the Senate after legislators added a long list of amendments that still aren't enough. The Assembly is scheduled to vote on it next week. The Assembly needs to shoot this bill down in order to send a strong message to the telecommunications industry that they can't use a backdoor "status quo" bill to deregulate the basic services of the future.