March 2013

Verizon Seeks to Shake Up Fees for TV Channels

Verizon is proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.

Verizon, whose FiOS TV is the nation's sixth-biggest pay-TV provider, with 4.7 million subscribers, has begun talks with several "midtier and smaller" media companies about paying for their channels based on audience size, according to Terry Denson, the phone company's chief programming negotiator. He declined to identify any of the media companies. Under existing arrangements, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels. Verizon would like to offer broad distribution of a "significant number of channels," including independent networks and smaller outlets. But each channel would be paid solely according to how many subscribers tuned in each month for a "unique view," or a minimum of five minutes, Mr. Denson said. Viewership would be measured by Verizon's set-top box data, not Nielsen ratings.

'Catastrophic' cyberattack could hit utilities

Hackers are increasingly targeting electric, natural gas and other vital utilities, threatening a disaster of epic proportions that experts say firms are doing too little to guard against.

"We will see catastrophic outages," PG&E Chief Information Security Officer James Sample warned state regulators at a recent forum, though not specifically referring to his company. "We are dealing with a very intelligent adversary." The threat is regarded by U.S. officials and others as among the most worrisome the nation faces. A cyberattack could so severely damage a utility that millions of people might be left without power for months, experts say, shutting down water and transportation systems, threatening the sick and elderly, and causing billions of dollars in damage.

Texting, handheld phones: Distracted-driving crackdown coming in April

Next month, thousands of cops will fan out across California in a massive crackdown on drivers texting or talking on handheld phones.

And oh, will they be busy, as so many drivers just don't seem to care that these growing forms of distracted driving have been illegal for nearly five years. New data from police statewide show they issued 425,041 tickets last year for talking on handheld phones -- down about 35,000 from the previous year but still a 41 percent increase from 2009, the first full year of the cellphone ban. Numbers were much smaller for texting citations: 21,059 in 2012. But that's a 41.5 percent increase from the previous year and a stunning 640 percent surge since 2009. And it's texting that concerns police the most; it's more dangerous because it takes drivers' eyes off the road, and it's harder to ticket because it's easier to hide.

Marketing to Kids Is an Obstacle Course

If you're advertising in the $1 billion kids marketplace, you’ll need to accommodate a bit more in the way of oversight, both from traditional antagonists like watchdog groups and from a less predictable challenger: big-box retailers.

Media buyers say big-box stores are putting serious pressure on toy manufacturers to sell toys alongside pencils and notebooks during the back-to-school period, and they're leveraging coveted shelf space in the Hard Eight to do it. The kids market is seeing sellout rates increase dramatically, tightening inventory and forcing clients to look for ad inventory in periods that fall beyond the run-up to the holiday season. "If you want that endcap or that prominent shelf position, you have to prove that you're going to support the product and push it to consumers," explained one kids market buyer (who asked not to be named). "The toy company then needs to put a media plan together and say, 'We’re going to spend this much money, and here’s how we’re going to do it.’ To earn your holiday shelf space, if you will, you have to start pre-promoting your product."

Online sales tax might have to stand on its own

Key lawmakers are warning the potential success of an online sales tax might lie in keeping it separate from comprehensive tax reform.

“If we meld this in to … ‘tax reform,’ there’s a lot of apprehension about whether it’s going to be a tax grab,” Rep. Peter Welch (D-VT), Marketplace Fairness Act co-sponsor and a House Commerce Committee member, said at the POLITICO Pro Technology Deep Dive. House Ways and Means Committee member Rep. Aaron Schock (R-IL) agreed. “I do not believe, at the end of the day, it is going to be a part of a tax reform bill because it’s not a part of the Tax Code,” he said. The latest incarnation of the Marketplace Fairness Act received broad bipartisan support when it was introduced in the House and Senate last month. Twenty senators and 37 House members immediately signed on to the bill, which would allow states to ensure online merchants collect sales tax in return for simplified tax procedures. The bill’s similarity this time around will help with passage, said co-sponsor Rep. Steve Womack (R-AR). But he challenged the notion that it would pass on its own. “The political reality is you may have to stick it in comprehensive reform,” he said. “We need to fix the problem. It’s a loophole that’s getting bigger and bigger.”

Spreading Disruption, Shaking Up Cable TV

[Commentary] A conversation with Barry Diller, the chairman of IAC/InterActiveCorp and head of Aereo, a start-up in New York that he is backing.

Aereo uses antenna farms to capture broadcast signals that can then be streamed on the Internet and viewed on a device of the customer’s choosing. Given that the service cuts out the cable television middleman and pays no retransmission fees to the programming producers, it’s a business idea that will sow chaos, disruption and turmoil. Just the way Mr. Diller likes it.

Danger Lurks in Growing New Internet Nationalism

[Commentary] For technology that was supposed to ignore borders, bring the world closer together, and sidestep the influence of national governments the Internet is fostering an awful lot of nationalism right now.

We’ve started to see increased concern about the country of origin of IT products and services; U.S. companies are worried about hardware from China; European companies are worried about cloud services in the U.S; no one is sure whether to trust hardware and software from Israel; Russia and China might each be building their own operating systems out of concern about using foreign ones. I see this as an effect of all the cyberwar saber-rattling that’s going on right now. The major nations of the world are in the early years of a cyberwar arms race, and we’re all being hurt by the collateral damage. Nationalism is rife on the Internet, and it’s getting worse. We need to damp down the rhetoric and—more importantly—stop believing the propaganda from those who profit from this Internet nationalism. Those who are beating the drums of cyberwar don’t have the best interests of society, or the Internet, at heart.

Viral Phone Game Helps Illiterate Pakistanis Find Job Listings

The global spread of mobile phones has brought new opportunities to many poor people around the world, but an estimated 800 million have trouble with text entry or automated voice systems because they are illiterate or only partly literate. And training programs are difficult to get going at sufficient scale.

In Pakistan, researchers are using a silly voice game to motivate hundreds of thousands of people to master an automated voice system—and then move on to scroll job listings this way, too. The effort, led by researchers at Carnegie Mellon University and Pakistan’s Lahore University of Management Sciences, started last May, when just five people in service jobs at Lahore University were given a phone number to get started playing the game. As of this week, the game has more than 156,000 users involving nearly 600,000 calls, including 27,000 inquiries to a job service, all of it sustained by viral spreading alone.

Prime Minister Denies Aiding Cyberattacks

China's new Premier Li Keqiang gave the highest-level denial yet to U.S. accusations that the country supports cyberattacks, an issue that in recent months has become a key sticking point in Sino-U.S. relations.

Speaking to Chinese and foreign reporters March 17 in his first news conference since his formal appointment as premier Friday, Mr. Li declared hacking and cyberattacks "a world-wide problem" and reiterated Beijing's stance that the country is a victim rather than an instigator. "China itself is a main target of such attacks," Li said, adding, "I think we shouldn't make groundless accusations against each other, and spend more time doing practical things that will contribute to cybersecurity." Li was speaking at the premier's traditional news conference at the end of the annual meeting of China's National People's Congress.

Screen grab: Pressure on big Internet groups

French authorities opened a new front this week. Now under the aegis of the Socialist government of François Hollande, the country’s telecoms regulator asked the Paris public prosecutor to investigate Skype, the popular, Microsoft-owned internet phone service, for failing to register as a telecoms operator. To some observers, these moves reflect a classic French instinct to exert control over unruly markets. “It is not really surprising that with the internet becoming such a big part of the economy it has attracted the attention of the French ‘engineers’,” says a French businessman. “There is a strong tradition here that just letting things happen cannot be the best answer.” But does the flurry of action across a wide sweep of internet activity signal a potentially damaging attack on a much-needed source of growth in a sclerotic economy? Or are the French authorities simply acting more forcefully to come to grips with problems that are vexing regulators around the globe?

Benton

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