March 2013

T-Mobile Shouts Back at AT&T While its Network Team Quietly Builds Away

AT&T and T-Mobile are spending big bucks to take potshots at one another.

AT&T placed newspaper ads last week insisting that its smaller rival drops more calls. T-Mobile fired back with ads of its own, suggesting that AT&T is staying up nights worrying about its little company. T-Mobile is also working on a new network that it hopes will make it a more serious longer-term competitor. After trailing all its major rivals in building an LTE network, T-Mobile is preparing a rapid nationwide deployment this year, expecting to cover more than a third of the U.S. population by mid-year and reach 200 million people by the end of the year. And at long last, T-Mobile has said it will begin selling Apple products, filling the biggest hole in its product lineup.

California lawmaker to present bill revoking cellphone unlocking ban

Rep Anna Eshoo (D-CA) plans to introduce a bill that would lift the ban on consumers unlocking their cellphones. "The ban on unlocking cellphones puts consumers in the back seat when it comes to choosing the mobile device and service that best suits them," Rep Eshoo said. "Competition and consumer choice are equally fundamental to a vibrant mobile marketplace."

Attorney General Holder defends prosecution of Web activist Swartz

Attorney General Eric Holder denied that agency officials acted inappropriately in their prosecution of Aaron Swartz, an Internet activist and co-creator of Reddit who killed himself earlier this year. During a Senate Judiciary Committee oversight hearing, Holder said that prosecutors initially offered Swartz a plea deal of three months in prison for allegedly stealing articles from a computer archive, and that they later said they would seek up to six months. The hacking charges carried a maximum penalty of 35 years in prison. "I think that's a good use of prosecutorial discretion to look at the conduct, regardless of what the statutory maximums were and to fashion a sentence that was consistent with what the nature of the conduct was," AG Holder testified, adding that Swartz and his attorneys had rejected the plea offers.

"Does it strike you as odd that the government would indict someone for crimes that would carry penalties of up to 35 years in prison and $1 million fines, and then offer them a three month prison sentence?" Sen John Cornyn (R-TX) asked. AG Holder insisted that the charges themselves are less important than the penalties sought by prosecutors and said several months in prison would have been appropriate based on the crime. But Sen Cornyn worried that such harsh potential penalties could empower prosecutors to "bully" defendants into pleading guilty.

Holder also said that communications would be one of the sectors on which Justice's antitrust division would focus.

Show Me the Moneyball: March Madness Generates $1 Billion in Ad Sales

Arguably the most spellbinding three weeks in sports, the NCAA Men's Division I Basketball Championship now stands as the most lucrative postseason advertising juggernaut.

According to a new report from Kantar Media, March Madness last year scared up more ad dollars for CBS and Turner Sports than the respective playoffs and championship series for the National Football League, National Basketball Association, Major League Baseball and National Hockey League. From March 13 to April 2, 2012, CBS and the Turner nets (TNT, TBS, truTV) generated just over $1 billion in tournament ad sales revenue. Kantar's figures do not take into account the $60 million in digital inventory sold by CBS and Turner.

No US Justice Dept objection to MetroPCS, T-Mobile USA merger

The U.S. Department of Justice has no objections to the merger between T-Mobile USA and mobile operator MetroPCS Communications, according to Deutsche Telekom. Approvals from the Federal Communications Commission, the Committee on Foreign Investment and MetroPCS shareholders are now the remaining hurdles for the merger. MetroPCS shareholders are set to vote on the merger on April 12.

Will FreedomPop Disrupt US Broadband with Free internet?

FreedomPop, which calls itself "America's new free Internet company,” announced the release of its Burst wired/wireless router, a device that's aimed at the home or small office, and which offers "100% free high-speed Internet."

After buying the router for $89, customers are entitled to 1GB of free data each month. They can earn unlimited data by "adding friends to their network via email and social media networks, and engaging in partner promotions," perhaps printing a store coupon out to add 500MB. The router offers speeds of 10 mbps upload, which is faster than typical DSL services, and a little slower than the service that cable companies typically offer. FreedomPop's CEO Stephen Stokols explained that the new service was born, in part, from frustrations with the U.S. model for broadband, which compares badly to other countries. "I know firsthand how Ofcom [the national telecoms regulator] in UK has increased competition in the UK and how that results in lower prices," Stokols said. "I also have been shocked by how the US carriers do not have that same pressure. As such, margins are 65% higher in the U.S. than the UK, 80% higher than France." Instead, Stokols suggests, the U.S. is an "oligopoly with essentially 2 option in any one market - Cable vs DSL. Any American who wants high speed internet has to pay around $50/month for unlimited downloads." That's okay for high traffic consumer, but Stokols pointed out that almost 70% of Americans consume under 10GB per month.

The new economics of media: If you want free content, there’s an almost infinite supply

Writer Nate Thayer set off the media equivalent of a fragmentation grenade, with a lament about the state of freelance writing that sent virtual shrapnel flying in all directions. The main target of his ire was The Atlantic, which he says asked him to rewrite one of his pieces and offered to pay him nothing — and this was seen by many as a symbol of the parlous state of online writing, not to mention the general decline of the media. Is that fair? Not really. But there’s no question the economics of content have changed.

Are These New Startups The Future Of Media?

The next big -- and profitable -- thing in media will be more of Tumblr-style platform than a BuzzFeed-style content creator. At least, that’s the $300,000-wager of Matter, a media accelerator which just revealed the six media start-ups who will receive $50,000 each in seed funding, plus training and support during a four-month boot-camp in San Francisco. Those companies are:

  • ChannelMeter, a video analytics platform.
  • InkFold, a social news reader. OpenWatch, a reverse-surveillance platform to monitor authorities.
  • SpokenLayer, a service that transforms written articles into narrated audio.
  • StationCreator, a platform for online TV stations.
  • Zeega, a multimedia publishing platform.

Computer Scientists Measure the Speed of Censorship On China’s Twitter

The Chinese version of Twitter is a microblogging service called Weibo which launched in 2010. Dan Wallach at Rice University in Houston, Texas, and a few pals reveal the results of a detailed study of censorship on Weibo.

Their method has allowed them to reconstruct the censorship techniques used by the government, to calculate the number of workers who must be involved and even to discover their daily work schedules. Wallach and co say their data point to a number hypotheses about what’s going on. Since the highest volume of deletions occur within 5-10 minutes of posting, Weibo must be censoring them in near real time. If an average censor can scan around 50 posts a minute, that would require some 1400 censors at any instant to handle the 70,000 posts pouring in. And if they work 8 hour shifts, that’s a total of 4200 censors on the payroll each day. Even then, this work force must have some technological help. Wallach and co say the data suggests Weibo has a number of techniques in operation. The first is keyword alerting. When a keyword appears, the post is immediately flagged for censors.

Why Microsoft probably couldn’t care less that the EU just fined it $732 million

Here’s why Microsoft need not care about the €561 million ($732 million) fine: According to its latest 10-Q statement, the company has $51 billion in overseas cash burning a hole in its pocket.

That money represents profits earned overseas, much of it in Europe, that Microsoft refuses to bring home to the US because to do so would be give up 35% of it in corporate taxes. Indeed, the not-so-secret history of Microsoft’s acquisition of Luxembourg-based Skype is that the $8.5 billion Microsoft paid for Skype was just a few (giant) bills off the company’s wad of overseas cash. In 2011, Microsoft had just $42 billion in overseas cash holdings, or $9 billion -- an entire Skype’s worth -- less than it does now. Granted, Microsoft is going to miss the half billion dollars in US cash equivalent (if it were repatriated and US taxes paid) that the EU will be extracting from the company, but given that Microsoft can’t figure out what else to do with its cash, that may simply be the cost of maintaining market share for its desktop browser.