March 2013

Link between area codes, locations may be severed

Federal Communications Commission Chairman Julius Genachowski wants to change the rules of the telephone numbers game, according to commission officials.

Chairman Genachowski began circulating a series of proposals among fellow commissioners that could make it easier for VoIP (voice over Internet protocol) providers to tap the national telephone numbers pool and eventually sever the relationship between an area code and an actual geographic area, the sources said. The proposals respond to calls by VoIP providers who do not like having to go through a phone-company middleman to get telephone numbers for customers. Numbers may seem prosaic, but they are dear to people’s hearts and a valuable commodity. While some of these changes are already taking place in the marketplace, Chairman Genachowski thinks that modifying the rules can open the door for more services and increase competition, commission aides explained.

Imagining a Swap Meet for E-Books and Music

The paperback of “Fifty Shades of Grey” is exactly like the digital version except for this: If you hate the paperback, you can give it away or resell it. If you hate the e-book, you’re stuck with it. The retailer’s button might say “buy now,” but you are in effect only renting an e-book — or an iTunes song — and your rights are severely limited. That has been the bedrock distinction between physical and electronic works since digital goods became widely available a decade ago. That distinction is now under attack, both in the courts and the marketplace, and it could shake up the already beleaguered book and music industries.

Amazon and Apple, the two biggest forces in electronic goods, are once again at the center of the turmoil. In late January, Amazon received a patent to set up an exchange for all sorts of digital material. The retailer would presumably earn a commission on each transaction, and consumers would surely see lower prices. But a shudder went through publishers and media companies. Those who produce content might see their work devalued, just as they did when Amazon began selling secondhand books 13 years ago. The price on the Internet for many used books these days is a penny. On March 7, the United States Patent and Trademark Office published Apple’s application for its own patent for a digital marketplace. Apple’s application outlines a system for allowing users to sell or give e-books, music, movies and software to each other by transferring files rather than reproducing them. Such a system would permit only one user to have a copy at any one time.

Georgia bill limiting cities’ ability to create broadband networks fails

The Georgia House voted down an effort to limit local governments’ ability to create their own broadband Internet networks, an effort to spur greater private sector competition.

House Bill 282 failed 70-94 with a bipartisan coalition of Democrats and rural Republicans who argued that private telecoms have failed to build reliable networks. Sponsored by Rep. Mark Hamilton, R-Cumming, the bill would have allowed local governments to enter the Internet marketplace if no private network provided at least 3 mega bytes per second of service. Rep Hamilton said allowing cities, with unlimited tax dollars, to compete with private companies erodes the free market and is a waste of taxpayer money.

Google Cutting 10 Percent of Jobs at Its Motorola Unit

Google’s Motorola Mobility unit is in the process of cutting an additional 1,200 jobs amid continued challenges in its core cellphone business. The cuts will eliminate more than 10 percent of the hardware maker’s workforce.

Google announced in August it would cut some 4,000 jobs, or 20 percent of the Motorola workforce. In December, Motorola announced a significant cutback of its South Korean operations, a move that resulted in 500 job losses.

The Dirty Secret of Apps: Many Go Bust

Plenty of independent developers have made fortunes off the boom in mobile apps. But many more have failed after learning the hard way that computer skills, a little money and a good idea often aren't enough in the competitive market. With hundreds of thousands of games, productivity tools and other apps already on the market, and thousands more launched every week, many startups are finding that their ideas aren't so unique after all. In this environment, well-heeled companies with big marketing budgets hold sway.

Judge Temporarily Blocks Cab-Hailing by Smartphones

A New York State Supreme Court justice blocked New York City’s plans to allow taxi riders to hail yellow cabs using smartphone apps, preventing the Bloomberg administration from beginning the program on March 8 as scheduled.

Granting at least a short-term victory to the livery and black-car operators who filed suit against the city, Justice Carol E. Huff issued a temporary restraining order until March 19, when the two sides are scheduled to reconvene. Owners of for-hire vehicles have argued that the city’s plan violates a longstanding ban on prearranged rides in yellow taxis and would upend their business model. “It’s not an ‘e-hail.’ It’s an ‘e-prearranged pickup,’ ” said Randy M. Mastro, the lawyer representing the plaintiffs, which include the Livery Roundtable and the Black Car Assistance Corporation.

Cablevision Takes Its Second Swing at Viacom in Bundling-Breaking Fight

Here’s the next step in the Cablevision/Viacom cable bundling fee fight: After back and forth between the two companies about which stuff they want to keep private, they have released a public version of Cablevision’s legal complaint. This is just a more formalized version of the argument Cablevision made last week, when it said Viacom had illegally forced it to take lots of crappy Viacom channels in order to get the ones it really wanted, like MTV and Comedy Central.

The one really interesting part in here should be where Cablevision explains just how much more expensive it is for them to buy a handful of channels instead of taking the whole package. Their contention is that while Viacom theoretically offers its channels to distributors on an a la carte basis, it charges so much for them that there’s no practical way anyone would do that, because it’s much cheaper to take the bundle. That is, it’s a choice without a choice. But at Viacom’s request, all the pricing information has been redacted from the complaint. So Cablevision can only say that the price difference between Viacom’s a la carte option and the bundle is something between $1 billion and $9 billion, and that that number is “more than Cablevision’s entire programming budget” for 2013.

Why Is Your Cable Bill So High?

[Commentary] Why is it that cable bills keep getting higher?

While a lot of the blame falls on the cable industry itself, even some large cable companies can find themselves squeezed by high programming costs that they then pass along to consumers. For years, cable prices have increased at a rate faster than inflation. According to a report released last year by the NPD group, the average cable bill (just video, not including broadband or voice) reached $86 per month. Compared to an $8 per month Netflix subscription, or an Amazon Instant Video subscription that works out to about $7 per month (and includes free shipping on actual physical goods sold by Amazon for a year), that's a lot. Cable certainly provides access to a lot of shows you can't get anywhere else, some of it live programming, like sports, that don't fit neatly into the on-demand Internet mode. But do consumers really get more than 10 times the value from cable that they get from lower-priced alternatives? A recent FCC price survey found some cable prices rising about 6% in a year. Is cable really getting that much better year after year? Some people might just say that if people pay for something it's worth it to them. Q.E.D. But increasing numbers of people are cancelling their cable subscriptions, never getting one to begin with, or hanging on only because of one or two much-watch kinds of programming.

Ranking Members Waxman, Eshoo, and DeGette Call For Hearing on Lifeline Program Reforms

House Commerce Committee Ranking Member Henry A. Waxman (D-CA), Subcommittee on Communications and Technology Ranking Member Anna G. Eshoo (D-CA), and Oversight and Investigations Subcommittee Ranking Member Diana DeGette (D-CO) sent a letter to Chairmen Fred Upton (R-MI), Greg Walden (R-OR), and Tim Murphy (R-PA) requesting a hearing on the Federal Communications Commission’s (FCC) Lifeline program, which provides low-income Americans with assistance to receive home phone service.

Since 1985, the Lifeline program has ensured that tens of millions of Americans can call 9-1-1, provide a phone number on a job application, and communicate with family and loved ones. However, policy changes beginning during the Bush Administration have created new risks for waste, fraud, and abuse. Under the Obama Administration, the FCC has initiated reforms to clean up the program. The letter requests a hearing to examine whether these efforts are adequately ensuring the integrity of the Lifeline program.

Recap: Senate Cybersecurity Hearing

The Senate Commerce Committee and Homeland Security and Governmental Affairs Committee held a joint hearing on March 7 to examine the development and implementation of the Executive Order issued by President Barack Obama and explore the need for comprehensive legislation to strengthen our nation’s cybersecurity.

Commerce Committee Chairman Jay Rockefeller said Congress has “wasted a lot of time, by turning an urgent national security issue into a partisan political fight. Back in 2010, we passed a cyber bill out of the Commerce Committee unanimously, without a vote. By the fall of 2012, we couldn’t even get enough votes to close debate on the Senate floor, even though our country’s top national security leaders were urging us to act. The Obama Administration got tired of waiting for us. I can’t blame them. This is a problem that is growing worse every day.”

"While I commend the President for issuing this very important Order,” said Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-DE), “there was only so much he could do using the authorities granted to him under existing law. Those authorities are simply not enough to get the job done. Now is the time to begin the process of gathering input from the Administration and a broad array of stakeholders in order to ascertain what Congress needs to do to build on the Executive Order that the President has promulgated.”

Department of Homeland Security Secretary Janet Napolitano and Patrick Gallagher of the National Institute of Standards and Technology testified. Sen Napolitano said a "suite" of legislation was needed that would 1) incorporate privacy and civil liberties; 2) create information sharing standards; 3) provide additional tools to fight cybercrime; 4) create a data breach reporting requirement; and 5) give DHS hiring authority equivalent to the National Security Agency.
Gallagher repeatedly emphasized that the voluntary cybersecurity framework created by the president's executive order was just that, and that he wanted industry to come up with that framework. Napolitano said that the government would use carrots rather than sticks for industry, including procurement and contract incentives for adopting standards. Gallagher said the goal is to set standards, and have industry decide how best to do that. Napolitano said that to the extent that this is a national security interest and the government is leaving it to industry, that is a first, and a "grand and bold experiment," rather than a top-down government process as is usually the case with national security. Gallagher suggested an added benefit of having the industry drive the framework is that the government sequester cuts would not have much effect on that process, as opposed to a government top-down process. Asked why there seemed to be a shift in the industry, Napolitano suggested it was because the president involved them in the creation of the executive order itself, and because the administration did not stop work when the Democrat-backed bill failed in the last Congress.

Benton

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