October 2012

E-books: Developments and Policy Considerations

The essential distinction between permanent and effective ownership of a physical book, and conditional rights of access to the e-book, has, so far, been somewhat obscured by marketing strategies and use of visual images, which tend to present e-books as a superior, but also substitutable, version of the print book product.

Given the virtual reality of “traditional books” presented by e-Book platforms, buyers of e-books are likely to confuse their rights (i.e. after purchase) with the property rights model for print books. Users may be surprised to find that they are prevented from doing certain things with their e-book, within their private/ personal sphere. It has been suggested that, with digital rights management (DRM), the consumer’s relationship with their selected e-books, even those stored on their own devices8, may be better described as a “rental”, or a “license to access”, rather than a “purchase”. It would also be in the consumer interest to ensure that information explaining what the DRM is, what it restricts, and why, be highlighted for the buyer, prior to his/her purchase of the e-book. The policy concern worthy of greatest consideration is arguably consumer protection: transparency, product information, and the risk of misleading consumers. Any material limitations of use rights must be clearly and conspicuously disclosed before the sale of the content.

Users who buy e-books are often locking the purchase into a platform or hardware system and this could lead to interoperability issues across platforms and problems with consumer lock-in. The choice of reading device will, to varying degrees, affect the range of e-books available to the reader. The degree of vertical integration which has developed across the supply chain for e-books has created commercial incentives to tie the customer’s long term investment in the reading hardware to the content of a particular e-book seller. The risks of customer lock-in and market fragmentation should be considered in this context.

How private are your phone calls?

[Commentary] In the aftermath of the 9/11 attacks, the Bush administration monitored the international phone calls and emails of hundreds, perhaps thousands, of people within the U.S. without a court order. Seven years after the New York Times broke that story, it is apparent that privacy safeguards legislated in response are inadequate — a deficiency Congress needs to rectify. Congress must strike a new and better balance between national security and the privacy rights of Americans.

By ignoring tech in the campaign, both candidates squander big opportunity

[Commentary] Silicon Valley has served as a huge source of cash for both presidential candidates -- but not as much of a source of ideas for their campaigns. That means both men are missing the chance to use technology to paint an optimistic, big-picture vision of where they want to take the country.

Roosevelt had the New Deal; Reagan had "morning in America." Obama and Romney have what, exactly? "It really should be a part of the national discussion because it's so much a part of the national economy," said Rep. Anna Eshoo, D-Palo Alto. "There are extraordinary opportunities ahead. I'm disappointed that there's not, out of either camp, the kind of discussion of technology issues that are so important to this country.” Both President Barack Obama and Mitt Romney have tech-related positions in their platforms. And I wouldn't expect either candidate to be spending time on the stump talking about patent reform or spectrum licensing, topics vital to Silicon Valley that put the rest of the country into a coma. But what happened to the tech-savvy Obama of 2008 (remember his BlackBerry)? And while Romney's campaign is far more adept at technology than Sen. John McCain's, he also hasn't made technology issues a centerpiece.

Political Ad Market: From Feast to Famine

In this year of record political advertising spending, Little Rock (DMA 56) has been mostly bypassed and forgotten by candidates and their supporters. The presidential candidates are ignoring Arkansas because Republican challenger Mitt Romney has a lock on its six electoral votes, and there are no major state offices up for grabs. Even the open seat of retiring Rep. Mike Ross (D) in the southern part of the state hasn’t produced much ad spending, with the GOP candidate seen as having an insurmountable lead and the Democrat unable to raise much money. The state’s three other Republican incumbents in the House are breezing to re-election. But that’s how it goes with political advertising every even-numbered year. Some markets — like Little Rock — are virtually shut out, and some in presidential swing states with closely contested gubernatorial or U.S. Senate races and possibly local elections — like Roanoke-Lynchburg (VA) (DMA 68) — have trouble coping with the enormous demand for time.

Anti-Obama text ads cause a stir

Hundreds of people reported receiving strident, unsolicited anti-Obama text messages in an unusual spamming incident that had Twitter and Facebook users in an uproar.

“Voting for Obama means voting for same-sex marriage,” one message read. Others included “Obama stole $716 Billion in Medicare. We cant [sic] trust Obama to protect our seniors,” “Obama is using your tax dollars to fund Planned Parenthood and abortions. Is that right” and “VP Biden mocks a fallen Navy Seal during memorial. Our military deserves better.” While several people on social media sites angrily posted that the messages were coming from Republican Mitt Romney, there is no indication that the messages were sanctioned or produced by his campaign. The messages do not carry the customary notations of who approved or paid for political ads. The messages did not appear to be sent to particularly strategic targets — several hardcore Democrats were among the known recipients, as were children and people in non-battleground regions — but they came from several email addresses, including republicanett.com, votegopett.com, aiccomett.com and informedett.com. That suggests they were sent from the Internet rather than from other phones. Every domain checked by POLITICO was masked so Internet users could not trace their origins. It’s not known how many people received these messages.

Sec Napolitano: US financial institutions 'actively under attack' by hackers

Homeland Security Secretary Janet Napolitano warned that some of the largest U.S. financial institutions "are actively under attack" from cyber hackers.

While Sec Napolitano sounded the alarm about the attacks at a cybersecurity event hosted by The Washington Post, she declined to provide any details about them. "Right now, financial institutions are actively under attack. We know that. I'm not giving you any classified information," she said. "I will say this has involved some of our nation's largest institutions. We've also had our stock exchanges attacked over the last [few] years, so we know ... there are vulnerabilities. We're working with them on that." When asked by Post editor Mary Jordan about whether hackers are stealing information or money from banks, Sec Napolitano answered "yes" and then quickly added, "I really don't want to go into that per se." "All I want to say is that there are active matters going on with financial institutions," she said.

Fox Message to Advertisers: World Series Still Has Lots of Value Despite Softer Viewership

Baseball fans may choose to argue the relative thrills of the recent World Series between the San Francisco Giants and the Detroit Tigers. What can't be argued are the numbers for the telecasts on Fox: This year's Fall Classic proved to be the least viewed World Series in history, according to Nielsen data, averaging 12.7 million viewers per game.

But despite the ratings, Fox execs strongly believe the Series is still a highly valuable marketing event for advertisers. Mike Mulvihill, senior VP of programming and research, Fox Sports Media Group, says Fox's message to advertisers is that despite the drop, the World Series will continue to be a top 10 show among viewers and do even better among adults 18-49 and among men 18-49. "If you look at the World Series ratings, and compared them to all primetime programming season to date, it would rank sixth among adults 18-49 and second among men 18-49," he says. "There is still a lot of value there even though viewership is not what it was 30 or 40 years ago."

FCC Sets Comment Deadline on Program Access Questions

The Federal Communications Commission has set a for comments on various proposals related to its revision of program access rules, including key proposals backed by the American Cable Association.

On Oct. 5, the FCC voted to sunset its ban on exclusive contracts between MVPDs and co-owned programming networks, complaints about which will now be handled under the existing prohibition on unfair practices. At the same time, and as a way to address the concerns of small cable operators, the commission issued a Further Notice of Proposed Rulemaking seeking comment on various other possible changes, including a proposal to change the FCC's definition of "buying group" to allow the National Cable Television Cooperative (NCTC) to file program access complaints without assuming collective liability for all of its members, and a variety of rebuttable presumptions related to exclusive contracts, both proposals backed by the American Cable Association. Initial comments are due Nov. 30, with replies due Dec. 17.

Rosetta Stone Agrees to Drop Google Trademark Suit

Rosetta Stone, a maker of language-learning software, agreed to drop a lawsuit it brought against Google for selling its trademarks to other companies for search-engine advertising.

The companies agreed that all claims in the infringement case will be dismissed, according to a filing in federal court in Alexandria, Virginia. No terms were given with the stipulation of voluntary dismissal. Rosetta Stone had claimed the keywords were being sold to competitors and counterfeiters. U.S. District Judge Gerald Bruce Lee ruled in 2010 that the sale of Rosetta’s trademarked phrases as keywords wouldn’t confuse consumers. The U.S. Court of Appeals for the Fourth Circuit in April overturned part of that ruling and sent the case back to the lower court.

States Look to Better Regulate Online Universities

Many U.S. states regulate who provides online education to their residents to ensure consumers aren't getting stiffed — and now a group of states is brainstorming how to make the process of regulating these online universities smoother and more cost-effective.

Benton

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