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  2. March 2013

March 2013

EU Reding: Apple Still Not Informing Customers Correctly About Warranty Rights in EU

A senior European Union official said that Apple still isn't informing consumers correctly about their legal warranty rights in many EU member states, as she called for Brussels to take a greater role in shaping a common approach to consumer protection rules.

The EU's Justice Commissioner Viviane Reding honed in on the Apple case as an example of weak and diverse enforcement of consumer rules within the EU. Reding wrote to national governments last September encouraging them to take action over the way Apple advertises their commercial warranties and to ensure Apple was respecting the legal guarantee of a two-year warranty that consumers are entitled to under EU law. "This case and the responses I received since I sent my letter have highlighted rather clearly just why the Commission cannot sit on the side-lines on enforcement issues," she said. "The approaches to enforcement in these types of cases turn out to be very diversified and inconsistent at a national level. In at least 21 EU Member States Apple is not informing consumers correctly about the legal warranty rights they have. This is simply not good enough."

March 19, 2013 (Unwanted Electronic Gear Rising in Toxic Piles)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, MARCH 19, 2013

Today’s agenda http://benton.org/calendar/2013-03-19/


CYBERSECURITY
   Internet Providers Persuade FCC Panel Against Cybersecurity Recommendations

INTERNET/BROADBAND
   Supporters of Internet sales tax battle headwinds

OWNERSHIP
   Hesse, Masayoshi Son Met With FCC to Pitch SoftBank-Sprint Deal
   FTC OKs Charter $1.625M Purchase of Optimum West [links to web]
   Liberty Said Close to Buying Charter Communications Stake [links to web]

WIRELESS/SPECTRUM
   Cell Phone Unlocking Debate Highlights Trade Negotiation Process Problems - analysis
   Loyalty Low Among Wireless Carriers
   White spaces networks are not “super” nor even Wi-Fi - op-ed
   NAB’s Kaplan: FCC Needs to Get More Comment on Band Plan [links to web]
   More than half a billion Internet-connected devices in U.S. homes [links to web]
   Smartphones do too much: convergence is giving way to divergence - op-ed [links to web]
   Six Steps to Mobile Success in Government [links to web]
   Why Your Car Is Now A Giant Smartphone On Wheels [links to web]
   The Very First Cell Phone Calls [links to web]

PRIVACY
   The Internet is a surveillance state - op-ed

TELEVISION
   Supreme Court Refuses to Hear Ivi's Case
   Facebook quickly fixes privacy leak in new timeline, group says [links to web]

ELECTIONSAND MEDIA
   RNC calls for Republicans to beef up data and digital operations [links to web]

ENVIRONMENT
   Unwanted Electronic Gear Rising in Toxic Piles

LABOR
   Apple, Google, HP and other tech giants again refuse to release workplace diversity data

POLICYMAKERS
   White House narrowing field for FCC chairman
   Commerce Secretary Rebecca Blank named UW-Madison chancellor [links to web]

STORIES FROM ABROAD
   Press regulation deal struck by parties in UK
   UK media cautious over press regulation plan [links to web]
   China’s new leadership is ratcheting up pressure on Western tech and media companies
   Chinese legal dissident Chen Guangcheng calls on Apple and other Silicon Valley companies to advocate for human rights in China [links to web]
   European carriers are moving away from handset subsidies, analysts find
   Austria to Hold Its Biggest Ever Spectrum Auction This Fall [links to web]
   Free Mobile founder defends low-cost model [links to web]
   Opt-in Internet porn filter across 4 major UK ISPs humming along nicely [links to web]

MORE ONLINE
   The Battle for the Living Room Is Over — The War for the Consumer Is On - op-ed [links to web]
   Companies slow to use Twitter, Facebook for customer service, study says [links to web]
   MPAA Backs Authors Guild Against Universities [links to web]
   Pushing Editorial Into World of Apps [links to web]
   Even the professors behind massive online classes aren’t sure they should count for credit [links to web]
   CyberPatriot competition preps young cyberdefenders [links to web]

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CYBERSECURITY

CYBERSECURITY RECOMMENDATIONS
[SOURCE: Wall Street Journal, AUTHOR: Danny Yadron]
Big Internet providers seem to have talked their way out of unwelcome new recommendations on cybersecurity. An original draft of a report by a Federal Communications Commission panel, viewed by The Wall Street Journal, endorsed a list of concrete suggestions for major telecommunications and cable companies to tackle the cybersecurity problem. Those measures—which included steps such as controlling which employees have administrative privileges on company networks—weren't backed in the final report. The early draft of the FCC panel's report called for adoption of a specific list of cybersecurity fixes, known as the 20 critical security controls, which were developed by cyber experts in concert with the National Security Agency and others. The FCC panel also initially wanted federal regulators to push for a telecom industry group that would create a new set of cybersecurity guidelines, according to the draft of the report. The industry, however, viewed another organization for cybersecurity issues as a superfluous layer of bureaucracy, a telecom official said. The United States Telecom Association, whose members include AT&T, Verizon Communications and CentruyLink , along with other industry representatives blocked a full endorsement of the list, according to advisers on the FCC panel. In their final report, members of the advisory panel agreed that they lacked consensus on how to protect U.S. telecom networks. The development may be indicative of the tensions to come as the government looks at tougher oversight of the private sector's cybersecurity defenses. The FCC panel, officially known as "working group 11" of the FCC's Communications Security, Reliability and Interoperability Council III, lacks regulatory authority. The group of industry representatives and outside security experts was tasked with advising the agency on future action.
benton.org/node/148200 | Wall Street Journal
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INTERNET/BROADBAND

INTERNET SALES TAX BILL
[SOURCE: Politico, AUTHOR: Lauren French, Tony Romm]
The longtime backers of a state Internet tax fix think they can overcome strong congressional currents in a year dominated by debates over how much the feds raise and spend. But a few key players remain lukewarm at best about the legislation — and the politics of the moment suggest the bill is barely keeping its head above water. Even after multiple rewrites, it’s likely to be a tough battle for the Marketplace Fairness Act, a bipartisan proposal that could help states ensure they’re receiving their sales-tax dues when residents purchase products from out-of-state online retailers. House Judiciary Committee Chairman Bob Goodlatte (R-VA) isn’t supporting the measure in its current form, while the leader of the Senate Finance Committee, Sen. Max Baucus (D-MT), is focused almost exclusively on the more intractable fights to come over the federal Tax Code.
benton.org/node/148210 | Politico
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OWNERSHIP

SOFTBANK-SPRINT PITCH AT FCC
[SOURCE: Wall Street Journal, AUTHOR: Ina Fried]
Sprint CEO Dan Hesse, SoftBank chief Masayoshi Son and Clearwire CEO Erik Prusch met last week with members of the Federal Communications Commission to pitch the benefits of their proposed deal. During the meeting, Son explained what he had done in creating one of Japan’s largest wireless providers after entering as an upstart in 2006 by purchasing Vodafone’s Japanese wireless interests. “Through innovative products, pricing, and marketing, SoftBank is now poised to become the second largest wireless provider in Japan,” Sprint said in the filing. “Mr. Son explained that through SoftBank’s investment in Sprint, he hopes to bring a similar competitive spark to the U.S. wireless marketplace.”
benton.org/node/148198 | Wall Street Journal
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WIRELESS/SPECTRUM

CELL PHONE UNLOCKING AND TRADE AGREEMENTS
[SOURCE: Public Knowledge, AUTHOR: Chris Lewis]
[Commentary] The issue of cell phone unlocking has been hot for the past month. The White House response to the over 100,000 person petition to allow for the unlocking of cell phones has led to a flurry of legislative proposals in Congress and broad interest in a quick solution to the issue. Public Knowledge has argued that this is an opportunity for Congress to do two things: First, make the exemption for cell phone unlocking permanent by including it the current statute; and second, begin a broader conversation about what other reforms to the Digital Millennium Copyright Act (DMCA) should be considered. Public Knowledge has also made the strong argument that the concerns raised about free trade agreements should not stop Congress from doing its job: to set the policy of the United States. [more at the URL below]
benton.org/node/148196 | Public Knowledge
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LOYALTY AND WIRELESS
[SOURCE: MediaPost, AUTHOR: Aaron Baar]
Despite what U.S. wireless carriers might think about customer loyalty, there’s a good chance they’re underestimating how committed those people are to their brands. According to a study from WDS (a division of Xerox that provides customer experience management), 36% of wireless customers in the U.S. said they are considering leaving their mobile carrier within the next year. Meanwhile, only 13% of customers would be considered loyal enough to remain with a carrier despite better offers from others or service disruptions.
benton.org/node/148141 | MediaPost
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WHITE SPACES AND WI-FI
[SOURCE: GigaOm, AUTHOR: Peter Rysavy]
[Commentary] Recently there has been a push to make a significant amount of unlicensed white-space spectrum available in the 600 MHz band. The Federal Communications Commission is considering making an additional 30 MHz of spectrum available for unlicensed use, augmenting existing white-space spectrum. Proponents of this unlicensed band are using the term “Super Wi-Fi” to describe the technology that would use this spectrum. The only problem is that it’s not super for multiple reasons, and it’s definitely not “Wi-Fi.” I believe applying that spectrum to technologies that will use it the most fully will provide the greatest societal and economic benefit. Right now, those technologies include LTE and LTE-Advanced. We should continue to foster innovation and experimentation with white space spectrum and Wi-Fi, but not at the expense of also expanding the base and capabilities of our best-in-class, commercial wireless broadband networks that depend on licensed, exclusive use spectrum for their core operations.
[Rysavy is President of Rysavy Research, a wireless network engineering firm]
benton.org/node/148146 | GigaOm
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PRIVACY

THE INTERNET IS A SURVEILLANCE STATE
[SOURCE: CNN, AUTHOR: Bruce Schneier]
[Commentary] The Internet is a surveillance state. Whether we admit it to ourselves or not, and whether we like it or not, we're being tracked all the time. Google tracks us, both on its pages and on other pages it has access to. Facebook does the same; it even tracks non-Facebook users. Apple tracks us on our iPhones and iPads. One reporter used a tool called Collusion to track who was tracking him; 105 companies tracked his Internet use during one 36-hour period. Everything we do now involves computers, and computers produce data as a natural by-product. Everything is now being saved and correlated, and many big-data companies make money by building up intimate profiles of our lives from a variety of sources. [Schneier is a security technologist]
benton.org/node/148134 | CNN
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TELEVISION

SCOTUS REFUSES IVI CASE
[SOURCE: AdWeek, AUTHOR: Katy Bachman]
Ivi, a pay TV service that was streaming over-the-air TV signals on the Internet without permission, has finally reached the end of the road in court. The Supreme Court denied the company's petition for certiorari and refused to hear the case, letting stand the Second Circuit decision upholding an injunction against the service. The decision hands a satisfying victory and perhaps hopeful one to broadcast networks ABC, CBS, NBC, Fox and other station owners that sued ivi in 2010 for copyright infringement and are faced with a similar legal challenge to Aereo, another streaming service in New York backed by Barry Diller.
benton.org/node/148148 | AdWeek
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ENVIRONMENT

UNWANTED ELECTRONIC GEAR
[SOURCE: New York Times, AUTHOR: Ian Urbina]
As recently as a few years ago, broken monitors and televisions were being recycled profitably. The big, glassy funnels inside these machines — known as cathode ray tubes, or CRTs — were melted down and turned into new ones. But flat-screen technology has made those monitors and televisions obsolete, decimating the demand for the recycled tube glass used in them and creating what industry experts call a “glass tsunami” as stockpiles of the useless material accumulate across the country. The predicament has highlighted how small changes in the marketplace can suddenly transform a product into a liability and demonstrates the difficulties that federal and state environmental regulators face in keeping up with these rapid shifts. “Lots of smaller recyclers are in over their heads, and the risk that they might abandon their stockpiles is very real,” said Jason Linnell of the Electronics Recycling Coordination Clearinghouse, an organization that represents state environmental regulators, electronics manufacturers and recyclers. In February, the group sent a letter to the Environmental Protection Agency asking for immediate help dealing with the rapidly growing stockpiles of the glass, much of which contains lead. With so few buyers of the leaded glass from the old monitors and televisions, recyclers have collected payments from states and electronics companies to get rid of the old machines. A small number of recyclers have developed new technology for cleaning the lead from the tube glass, but the bulk of this waste is being stored, sent to landfills or smelters, or disposed of in other ways that experts say are environmentally destructive.
benton.org/node/148216 | New York Times
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LABOR

SILICON VALLEY DIVERSITY
[SOURCE: San Jose Mercury News, AUTHOR: Jeremy Owens]
Google, Apple and other tech titans continue to stonewall questions on the diversity of their workforce, five years after the San Jose Mercury News kicked off a quest to find out the racial makeup of the workforce at the country's most important technology companies. CNN Money, which began its own investigation in 2011, reported that its attempts to obtain the data -- which companies with more than 100 employees must provide to the federal government annually -- from 20 prominent tech firms in the U.S. have hit the same roadblocks. Of the 20, only Intel, Dell and Ingram Micro voluntarily released the data. Ten companies were able to block the release of the data from the U.S. Department of Labor because they are not federal contractors: Facebook, LinkedIn, Netflix, Twitter, Yelp, Zynga, Amazon, Groupon, Hulu and LivingSocial. Apple, Google, Hewlett-Packard (HPQ), IBM and Microsoft successfully appealed to the Labor Department to keep their information private, claiming that public release of the data would cause "competitive harm." Cisco and eBay data was released through the Freedom of Information Act, or FOIA, filing, providing the news organization with information from five of the 20 companies it originally contacted.
benton.org/node/148211 | San Jose Mercury News
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POLICYMAKERS

THE NEXT FCC CHAIR
[SOURCE: Washington Post, AUTHOR: Emily Heil]
When last we checked in on the Federal Communications Commission chairmanship, it seemed that the White House was in no rush to replace Julius Genachowski, the current head of the agency. But now it appears that Chairman Genachowski is eyeing the exits, and administration officials are busily lining up a successor. The White House has interviewed several candidates whose names have been much discussed by those who closely track these things: venture capitalist Tom Wheeler; assistant Commerce secretary Larry Strickling; and Karen Kornbluh, ambassador to the Organization for Economic Cooperation and Development. One under-the-radar candidate they’ve also talked to is former FCC official Cathy Sandoval, now a utilities commissioner in California. But whoever Obama settles on, it’s looking like it will happen sooner rather than later — the game is afoot.
benton.org/node/148155 | Washington Post
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STORIES FROM ABROAD

UK PRESS REGULATION
[SOURCE: BBC, AUTHOR: Chris Mason]
A deal has been struck between the three main political parties on a new press regulation regime in the wake of the phone-hacking scandal. An independent regulator will be set up by royal charter with powers to impose million pound fines on, and demand upfront apologies from, publishers. The prime minister has outlined to MPs the scope of the formal document, which will set out the regulator's powers. Press reform campaign group Hacked Off has welcomed the deal. But the major newspapers have yet to respond to the details.
benton.org/node/148133 | BBC
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CHINA VS WESTERN TECH AND MEDIA
[SOURCE: Quartz, AUTHOR: Naomi Rovnick]
It may get increasingly difficult for Western media and technology firms to operate in China. That is because of a two-pronged campaign against Western media and the tech companies that make the devices on which the Chinese consume their news and entertainment. On March 15, Chinese state-run broadcaster CCTV aired a critical documentary about Apple’s customer service. At around 8:20 p.m., just after the broadcast, Chinese celebrities started bashing Apple on Twitter-like microblogging site Weibo. This began looking orchestrated when Taiwanese American actor Peter Ho seemed to accidentally leave the instruction “post around 8.20″ on his Weibo comment. China’s just-installed president Xi Jinping and his cabinet seem to be becoming hostile to US tech companies as a way of championing their domestic rivals. Separately, the nation’s new leaders also want Western media to quit reporting on China’s inequality and official corruption. Having not been chosen by the public, they are paranoid about coverage that may affect their credibility.
benton.org/node/148131 | Quartz
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EUROPEAN CARRIERS MOVING AWAY FROM HANDSET SUBSIDIES
[SOURCE: GigaOm, AUTHOR: David Meyer]
One by one, the signs point to the decline and perhaps demise of the mobile handset subsidy. Whether it’s Vodafone paying newfound attention to the high-end pay-as-you-go market or regulators threatening to let contract customers walk out in the event of a price hike, there are frequent signs that carriers won’t be subsidizing the smartphones they sell you forever. In the U.S., this is a new thing. It was only in December that T-Mobile USA announced its abandonment of smartphone subsidies, much to the interest of other players such as Verizon, but in Western Europe things have moved on quite a bit further. In fact, according to new research from Informa Telecoms & Media, almost 30 operators there have already dropped handset subsidies for some or most customers.
benton.org/node/148169 | GigaOm
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Unwanted Electronic Gear Rising in Toxic Piles

As recently as a few years ago, broken monitors and televisions were being recycled profitably. The big, glassy funnels inside these machines — known as cathode ray tubes, or CRTs — were melted down and turned into new ones. But flat-screen technology has made those monitors and televisions obsolete, decimating the demand for the recycled tube glass used in them and creating what industry experts call a “glass tsunami” as stockpiles of the useless material accumulate across the country.

The predicament has highlighted how small changes in the marketplace can suddenly transform a product into a liability and demonstrates the difficulties that federal and state environmental regulators face in keeping up with these rapid shifts. “Lots of smaller recyclers are in over their heads, and the risk that they might abandon their stockpiles is very real,” said Jason Linnell of the Electronics Recycling Coordination Clearinghouse, an organization that represents state environmental regulators, electronics manufacturers and recyclers. In February, the group sent a letter to the Environmental Protection Agency asking for immediate help dealing with the rapidly growing stockpiles of the glass, much of which contains lead. With so few buyers of the leaded glass from the old monitors and televisions, recyclers have collected payments from states and electronics companies to get rid of the old machines. A small number of recyclers have developed new technology for cleaning the lead from the tube glass, but the bulk of this waste is being stored, sent to landfills or smelters, or disposed of in other ways that experts say are environmentally destructive.

More than half a billion Internet-connected devices in U.S. homes

Thanks to the increasing popularity of tablets and smartphones, the number of Internet-connected devices in U.S. homes has surpassed half a billion. The number of connected devices per U.S. household with Internet access has grown to 5.7, up from 5.3 devices three months ago, according to a report released by market research firm NPD Group. During that period, the “installed base” of tablets grew by nearly 18 million units, and smartphone users increased by nearly 9 million. Apple Inc. and Samsung Electronics Co. remained the top two smartphone brands that consumers own, and Apple dominates the tablet market with its iPad.

Companies slow to use Twitter, Facebook for customer service, study says

More people are using Twitter and Facebook to contact businesses instead of dialing the 1-800 customer service number, but companies are slow to respond on social media, leaving concerns unanswered and even deleting questions, according to a study.

The findings, released by LiveOps, which sells cloud-based customer service technology, and marketing research firm Harris Interactive underscore what many consumers already know -- customer service can be lackluster on social network sites. More than half of companies don't respond to questions posted on Facebook and Twitter, the study said, even though social networks are quickly becoming one of the most popular ways to connect with businesses. "You're destroying your brand by not responding," said Natalie Petouhoff, a business consultant and lecturer at the UCLA Anderson School of Management, who conducted research for the study. "Companies are going to wonder where they went wrong and went down the drain." The study, paid for by LiveOps, surveyed 1,255 consumers age 18 and older and researched customer service centers at retail, financial and telecommunications companies and other businesses over four months. About 70 percent of complaints on Twitter and Facebook are ignored, according to LiveOps' findings. Most customers wait more than two days for a response on Facebook, when an appropriate waiting period is less than an hour, researchers said. More than one-third of retailers have erased a customer's question from their Facebook page, according to the research.

Apple, Google, HP and other tech giants again refuse to release workplace diversity data

Google, Apple and other tech titans continue to stonewall questions on the diversity of their workforce, five years after the San Jose Mercury News kicked off a quest to find out the racial makeup of the workforce at the country's most important technology companies.

CNN Money, which began its own investigation in 2011, reported that its attempts to obtain the data -- which companies with more than 100 employees must provide to the federal government annually -- from 20 prominent tech firms in the U.S. have hit the same roadblocks. Of the 20, only Intel, Dell and Ingram Micro voluntarily released the data. Ten companies were able to block the release of the data from the U.S. Department of Labor because they are not federal contractors: Facebook, LinkedIn, Netflix, Twitter, Yelp, Zynga, Amazon, Groupon, Hulu and LivingSocial. Apple, Google, Hewlett-Packard (HPQ), IBM and Microsoft successfully appealed to the Labor Department to keep their information private, claiming that public release of the data would cause "competitive harm." Cisco and eBay data was released through the Freedom of Information Act, or FOIA, filing, providing the news organization with information from five of the 20 companies it originally contacted.

Supporters of Internet sales tax battle headwinds

The longtime backers of a state Internet tax fix think they can overcome strong congressional currents in a year dominated by debates over how much the feds raise and spend. But a few key players remain lukewarm at best about the legislation — and the politics of the moment suggest the bill is barely keeping its head above water.

Even after multiple rewrites, it’s likely to be a tough battle for the Marketplace Fairness Act, a bipartisan proposal that could help states ensure they’re receiving their sales-tax dues when residents purchase products from out-of-state online retailers. House Judiciary Committee Chairman Bob Goodlatte (R-VA) isn’t supporting the measure in its current form, while the leader of the Senate Finance Committee, Sen. Max Baucus (D-MT), is focused almost exclusively on the more intractable fights to come over the federal Tax Code.

UK media cautious over press regulation plan

Newspaper groups gave a cautious reaction to the UK government’s plans for press regulation, with some warning that “deeply contentious” issues remained unresolved.

Executives from some of the UK’s biggest newspapers groups are understood to be furious that the government failed to consult them on the Royal Charter plans as they were finalized on march 17 – even though members of Hacked Off, the lobby group pressing for tougher press regulation, were present in the negotiating room. Daily Mail Group, Telegraph Media Group and News International said in a joint statement: “We would like to make it clear that, contrary to reports broadcast by the BBC, no representative of the newspaper and magazine industry had any involvement in, or indeed any knowledge of, the cross-party talks on press regulation that took place on Sunday night.” The groups said they would need time to study the proposals, “early drafts of which contained several deeply contentious issues which have not yet been resolved with the industry”. The groups are concerned about the statute that would be introduced to back the Royal Charter, as well as the regulator’s broad powers to launch investigations and force newspapers to place apologies and corrections in positions of equal prominence to the original article.

Austria to Hold Its Biggest Ever Spectrum Auction This Fall

Austria’s telecommunications regulator will hold the biggest sale of radio frequencies in the nation’s history this year in an auction that mobile operators say is too complex.

The auction of 28 frequency blocks of 800 MHz, 900 MHz and 1,800 MHz spectrum will take place in September, the regulator, TKK, said. Minimum bids will be 526 million euros ($680 million) in total, it said. “The maximization of revenue is not a goal of the frequency auction,” Vienna-based TKK said a document posted on its website. It will be designed as a “combinatory clock auction,” which has been used in similar sales in the Netherlands, Switzerland, Denmark, Ireland and Great Britain, TKK said. The auction design has drawn criticism from operators, who say it can lead to irrationally high prices.

Free Mobile founder defends low-cost model

Xavier Niel, the French telecoms billionaire, said he had invested €950 million in France last year and created a thousand jobs as he sought to counter criticism that his launch of an ultra-low cost mobile phone operator had seriously damaged the country’s industry. Niel has come under attack from French ministers and rivals such as Vivendi’s SFR and Bouygues Telecom after he was allowed to launch a fourth mobile operator, Free Mobile, by the previous center-right government – even though he only had limited network coverage. His listed holding company, Iliad, said that it had invested 30 percent of its 2012 revenues as it increased its network coverage in France to 40 percent as defined by Arcep, the country’s telecoms regulator.

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