August 2012

Defenseless against cyberattacks

[Commentary] In the final weeks before Congress left for its August break, Sens. Joseph I. Lieberman (I-CT) and Susan Collins (R-Maine), took a gamble. They watered down their own cybersecurity legislation in hopes of winning passage. But last week on the Senate floor, their compromise died.

The sponsors could muster only 52 votes, short of the 60 needed. Sens Lieberman and Collins went a long way. Their original legislation would have set mandatory cybersecurity standards for companies that run critical infrastructure, such as electricity, water, nuclear, communications and financial networks. Ripping the heart out of their bill, they made the standards voluntary but still found no takers. The influential U.S. Chamber of Commerce opposed it, saying the legislation took an “adversarial” approach to the private sector. The group has endorsed other bills with less rigorous requirements. This was a moment when the business lobby put its head in the sand. The threat posed to the private sector in cyberspace cannot be wished away — it is large and growing. Most companies realize this from their own experience. They are being battered by cyber-exploitations and theft, losing customer records and intellectual property. Instead of torpedoing legislation, they ought to be leading the way, pressing Congress to act.

Does Maryland really want to be a pioneer on Internet gambling?

[Commentary] Before July 31 no one in Maryland had seriously considered allowing online gambling in a state that is having a hard enough time establishing the five casinos that were authorized by voters four years ago and is at odds over whether to permit a sixth. Then, seemingly out of nowhere, one of the existing slots casino owners — Cordish Cos., proprietor of Maryland Live! — said it would tolerate new competition only if Maryland lawmakers granted it a lavish menu of tax breaks, budget giveaways, special considerations (like permitting casinos to operate 24 hours a day) and — why not? — the right to offer round-the-clock Internet gambling at the hardly-worth-mentioning tax rate of 10 percent.

We don’t know why Cordish officials didn’t also ask for multi-million dollar annual cash transfers from taxpayers while they were at it; one can only speculate. Nonetheless, the firm’s brazen ask immediately seemed to pay off: No less a personage than Michael E. Busch, Democratic Speaker of the House of Delegates, took up the Internet gambling idea and suggested it was worth serious consideration. It isn’t.

Facebook ventures into online gambling

Facebook is venturing into the world of online gambling with the launch of its first application where punters can stake real money. Facebook will offer users in the UK aged 18 and over the opportunity to play online bingo and slots for cash prizes.

“Gambling is very popular and well regulated in the UK . . . for millions of bingo users it’s already a social experience [so] it makes sense [for us] to offer that as well,” said Julien Codorniou, Facebook’s head of gaming for Europe, Middle East and Africa. There has long been speculation among investors as to whether Facebook and other social networking sites would introduce gambling products to boost revenues. Zynga, Facebook’s largest gaming partner, is hoping to introduce real-money gambling versions of its poker, bingo and slot machine games in 2013.

Bruised Mobile Carriers Fight Back at Apple

The iPhone revolutionized the smartphone industry and made Apple the world's most valuable company. But it hasn't been all good news for the mobile carriers.

The biggest benefit of the iPhone, and the touch-screen devices that followed, has been a rise in average revenue generated from each mobile user. Data-hungry customers using the new generation of devices moved to more costly plans. In the second quarter of 2007, when AT&T T became the first carrier to offer the iPhone, its average monthly revenue per postpaid user was $56.88. In the latest quarter, it was $64.93, a 14% increase. But there is a cost, and not just in the extra capital spending required to stop networks becoming jammed by the extra data usage. As more consumers have smartphones—65% of postpaid customers for AT&T and 50% for Verizon Wireless—there is less incremental revenue to be gained from selling more of them. The carriers are fighting back. AT&T's first move was to change its upgrade policy. In March 2011, it lengthened the amount of time before a customer was eligible for an upgrade to 20 months from 12 to 18 months, depending on the plan. Verizon already had a 20-month policy in place.

Apple expert faces tough questions after saying Samsung infringed patents

An Apple design expert told a federal jury that Samsung's smartphones and tablets violated the patents on the iPhone and iPad but encountered rough sledding as relentless grilling by Samsung's lawyers challenged his conclusions.

With the Apple vs. Samsung trial moving into its second week, Peter Bressler, a professional design expert, testified throughout the day on his evaluation of a range of Samsung products he determined infringed Apple's patents. Apple's bid for $2.5 billion in damages is relying on such expert testimony to prove that Samsung "slavishly copied" the iPhone and iPad. "It is my opinion there are a number of Samsung phones and two Samsung tablets that are substantially the same as the designs in (the iPhone and iPad) patents," Bressler testified. But Charles Verhoeven, Samsung's understated lead attorney, spent hours trying to take apart Bressler's findings, repeatedly showing diagrams of distinctions in Apple and Samsung smartphones and tablets to undercut the expert's position.

Apple Ties To Samsung In Sharp Contrast To Courtroom Clash

Whatever the jury decides at the end of Apple-Samsung trial, Apple’s deep ties to Samsung are becoming more apparent even as the two companies clash in court.

Apple’s reliance on Samsung chips for its best-selling phones and tablets will be worth as much as $7.5 billion to Samsung this year, a 60 percent jump from 2011, Gartner estimates. Because Apple would struggle to find an alternate supplier for the main processor in its mobile devices, the computer maker can’t quit buying from its competitor anytime soon, whatever the trial’s outcome. “As much as these companies go head to head, there’s a definite intertwining there that makes it a real ugly divorce if it were to take place,” said Len Jelinek, an analyst at market researcher IHS Inc. “Apple cannot, under any circumstances, be caught in a capacity-crunch situation.”

IOC Says NBC Can Delay Whatever It Wants

If NBC wants to show Usain Bolt's 100-meter victory on tape delay, the International Olympic Committee says that's up to the network.

IOC spokesman Mark Adams deflected criticism aimed at NBC, which is the biggest financial backer of the Olympic body. "It's certainly not for us to tell them how to reach their audience," Adams said, adding that NBC live-streamed the race for online viewers. "If you wanted live, you could get it live." NBC has exclusive U.S. rights for the London Games. It struck a $2.2 billion deal with the IOC in 2003, which included rights to the 2010 Vancouver Winter Olympics. "Obviously, NBC are a good partner of ours," Adams said. "Clearly they know their audience best. They have got absolutely record figures for these games. They tried to get the moment where it would reach the biggest possible audience, which they did." NBC has experience built on broadcasting every Summer Olympics since 1988. It also has shown every Winter Games since 2002 in Salt Lake City. The network will extend that run through 2020 after signing a package last year for four games. NBC will pay $4.38 billion to the IOC for those exclusive rights. The deal includes all broadcast platforms, including Internet, cell phones and handheld devices.

Council for Research Excellence to Study The Impact of Social Media On TV Viewing

In a sign that advertisers and TV programmers would like better data on how social media is impacting the TV industry, the Council for Research Excellence (CRE) has announced that it will be conducting a three-pronged study on the relationship between social media and TV viewing.

CRE, which focused on improving audience measurement methodology and is funded by Nielsen, plans to complete the study in the fourth quarter of 2012. "We will gain insights about new consumer behaviors that have evolved as social media has become more connected to television viewing," said Beth Rockwood, senior VP, market resources, Discovery Communications, and chair of the CRE's Social Media Committee, in a statement. "This learning will allow us to better understand how viewing patterns are changing and how measurement of those behaviors can be improved. Since no single approach is likely to provide the full picture, we felt it best to study behaviors simultaneously from three different perspectives. In addition to learning about social media and television, we will also gain more insight about the research methods employed."

Nielsen Uses TV and Web Data in New Targeting Effort

Nielsen’s been fairly busy attempting to connect the dots between TV and online advertising.

The research firm is announcing Nielsen Online Audience Segments—TV Viewing, a program that’s designed to let a brand target online consumers based on their television and Web-viewing habits. Interestingly, Jonathan Carson, Nielsen’s general manager of digital, said the program was meant to attract “advertisers that are looking to reach consumers who don’t watch a lot of TV.” Indeed, if brands—a Trader Joe’s or a Zappos, perhaps—want to target cord-cutters with online ads, Carson said his system could suss out that audience segment. More generally though, he said, “It will enable our [online] publisher and network partners to organize their audiences according to what those individuals watched on television.”

AT&T Reaches Deal For Contract Covering 22,000 Employees

AT&T reached a tentative agreement with the Communications Workers of America in contract negotiations for more than 22,000 land-line employees in the southeastern US.

The company forged a deal with workers in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee, according to statement from the carrier. The three contracts will be submitted to the CWA’s membership for a ratification vote. The new three-year agreement, which replaces a contract that was set to expire on Aug. 9, includes wage increases in each year and “modest” pension increases, AT&T said. The company reached an agreement with Midwest employees last month and is still negotiating with the CWA on the East and West Coast, where contracts expired April 7.